Taxpayer cost over 10 years: $210 billion.
• Also starting in 2013 is a 2.3% excise tax on medical device manufacturers and importers. That’s estimated to raise $20 billion.
• Already underway this year is the new annual fee on “branded” drug makers and importers, which will raise $27 billion.
• Another $15.2 billion will come from raising the floor on allowable medical deductions to 10% of adjusted gross income from 7.5%.
• Starting in 2018, the bill imposes a whopping 40% “excise tax” on high-cost health insurance plans. Though it only applies to two years in the 2010-2019 window of ObamaCare’s original budget score, this tax would still raise $32 billion—and much more in future years.
• And don’t forget a new annual fee on health insurance providers starting in 2014 and estimated to raise $60 billion. This tax, like many others on this list, will be passed along to consumers in higher health-care costs.
There are numerous other new taxes in the bill, all adding up to some $438 billion in new revenue over 10 years. But even that is understated because by 2019 the annual revenue increase is nearly $90 billion, or $900 billion in the 10 years after that. Yet Mr. Obama wants to add another $1 trillion in new taxes on top of this.
In addition to the above Steven Haywood offers the following:
In addition to the above Steven Haywood offers the following:
“MISTER, WE COULD USE A MAN LIKE WARREN HARDING AGAIN!”
Baby-boomers and watchers of the TV Land channel will recall the line from “Those Were the Days”—the custom version written as the theme song for “All in the Family,” not the more familiar Charles Strouse/Lee Adams composition—which runs, “Mister, we could use a man like Herbert Hoover again!” Norman Lear no doubt thought the invocation of Hoover, the Democratic Party’s go-to whipping boy for decades, would help hammer home his main purpose of mocking conservative middle class Americans.
Of course, he, like most liberals, had Hoover wrong. For all of Hoover’s virtues, we cannot count sound economic policy among them. As Dan Mitchell and others have pointed out, Hoover increased government spending 47 percent in his one term, raised taxes, and signed off on the disastrous Smoot-Hawley tariff, which first caused Franklin Roosevelt to run against Hoover’s profligacy, but later caused Rex Tugwell to say later that “practically the whole New Deal was extrapolated from programs that Hoover started.”
If Lear really wanted to raise hackles, he would have changed the lyrics to, “Mister, we could use a man like Warren Harding again!” Now that would have raised some eyebrows and hackles alike. No president is held in lower regard than Harding. Yet watching the Obama Administration’s economic performance makes me think Harding is exactly the kind of president we need today.
I’ve been delving into Harding biographies and histories of his time for my current book project (more about this in due course as it gets closer to publication next year), and most everything you think you know about Harding is wrong, except for the bit about his assignations in a White House closet with one of his mistresses.
Did you know, for example, that Harding was the person most responsible for popularizing the now commonplace phrase, “the Founding Fathers”? Or that he gave speech in Birmingham, Alabama that shocked the segregated audience when he called for racial equality?
There’s much more in this vein to recommend Harding, but what concerns us most acutely today is Harding’s economic policy, especially his response to the economic crisis of 1920-21 that can only be described as a depression. World War I had left the nation with runaway inflation and a soaring debt. The national debt had increased from $1 billion in 1914 to $24 billion by 1920—a spending growth record that Obama must surely envy. The economic collapse of 1920 saw GDP shrink by a quarter, unemployment rise to about 15 percent (there were no official unemployment statistics in those days), and business bankruptcies soar.
So what did Harding do? A “stimulus”? A jobs program? “Targeted” tax cuts? Government bailouts for ailing companies? Nope—he cut government spending sharply and rapidly (by almost 50 percent), began cutting tax rates across the board, and allowed asset values and wages to adjust freely as fast as possible. Harding’s administration, Paul Johnson observed, “was the last time a major industrial power treated a recession by classic laissez-fairemethods, allowing wages to fall to their natural level . . . By July 1921 it was all over and the economy was booming again.” The Cato Institute’s Jim Powell offers a more complete summary of Harding’s soundness on economic policy, but suffice it to say that Harding’s traditional approach prevented the depression of 1920-21 from becoming a Great Depression, and in fact set the stage for the roaring twenties.
All of this comes to mind noting how just about every policy of the Obama Administration has chosen has extended the economic doldrums of the moment. The Wall Street Journalreminds us again this morning about how Obama recently expressed bewilderment that the housing market “hasn’t bottomed out as quickly as we expected.” One of the principal reasons for this was Obama’s $8,000 home-buyer tax credit in 2009 and 2010 that, like all Keynesian-style narcotics, juiced the market temporarily, but had the effect of prolonging our pain by delaying the necessary adjustment of housing values to their intrinsic level. Now the Administration is said to be “ramping up talks on how to revive the housing market.”
Here’s a suggestion. How about just staying out of the way. Just stop. And follow Harding’s lesson in reducing debt, too. I know, the thought Obama could be half the president Harding was is too much to ask.
FINALLY YET MORE ON TAXATION FROM JENIFER RUBIN ON REP. RYAN'S PLAN
FINALLY YET MORE ON TAXATION FROM JENIFER RUBIN ON REP. RYAN'S PLAN
Once again, Paul Ryan takes on Obama
Rep. Paul Ryan (R-Wis.) again and again has proved himself to be the most effective proponent of conservative economic principles.
Last night he sent around to budget committee colleagues a memo, a copy of which was obtained by Right Turn, setting forth some key facts and arguments. His central point is that “balance” doesn’t require tax hikes. As he puts it, “The House already passed a budget that puts us on the path to balance, and will vote next week on a Balanced Budget Amendment. To get to fiscal balance, the two critical elements required: spending restraint and economic growth. Tax hikes adversely undercut both of these key ingredients.”
The memo then provides some much needed context for the arguments on the debt ceiling:
A “Balanced Plan”?
l During the past two years Democrats enacted huge tax increases (see today’s Wall Street Journal editorial, “Taxes Upon Taxes”), which were accompanied by unprecedented increases in spending, deficits, and debt.
l While insisting on additional tax increases, the Obama Administration opposed revisiting the huge spending increases in the new health care law or implementing fundamental entitlement reform that would get spending on these programs under control.
l The last time there was a bipartisan budget agreement, it balanced the budget by cutting spending and cutting taxes. The 1997 bipartisan budget agreement between President Clinton and a Republican Congress balanced the budget by bringing spending down to 18.2% of gross domestic product.
Taxes and Revenues (Americans are not under-taxed)
l Expiration of 2001/2003 Tax Relief. Taxes will rise by $3.5 trillion if the 2001/2003 tax relief, the AMT patch, and the estate tax compromise expire at the end of 2012 as scheduled under current law.
l Health Care Law’s Tax Increases. The health care bill adds another $813 billion in taxes over 10 years. In addition to these taxes, other legislation has increased taxes (the SCHIP extension law included tax increases of $75 billion).
l Tax Engineering. The Obama Administration wants to extend the one-year temporary payroll tax cut (total cost of $112 billion), while increasing taxes on small businesses.
l Tax Increases and the Top Rate. As a result, these tax increases push the effective top rate from 35% today to 44.8%.
l Current Tax Burden. Under current law (before expiration of 2001/2003 tax relief and implementation of the new health care taxes), the top 1% of income taxpayers (over $380,000 in annual income) already pay 38% of income taxes. The bottom half of income taxpayers pay 3% of income taxes.
l Revenues Growing Without Tax Increases. Despite a weak economy and the temporary reduction in Social Security taxes, according to CBO, revenues grew by 8.5% through the first 9 months of this year and expect revenues in 2011 will be $75 billion to $85 billion higher than they estimated in March.
l Republican Budget & Revenues. Under the House Republican budget, which extended tax relief and repealed tax increases in the new health care law, revenues still grow by nearly $2 trillion over the next 10 years.
l President’s Budget & Tax Increases. The President’s budget increases taxes by $1.2 trillion.
Democrats and the left punditocracy often argue that “all” President Obama wants is to go back to the Clinton tax rate. If only. And if we are to take Sen. Kent Conrad (D-N.D.) seriously, Senate Democrats want a$2 trillion tax increase.
Ryan makes the case that the problem is spending and the ensuing debt, neither of which Obama is willing to seriously address:
Spending is the Problem
l 24% Increase in Base Spending. Non-defense discretionary spending grew by 24% for the first two years of the Obama Administration, adding $734 billion in spending over the next 10 years.
l Health Care Law Spending Increases. The new health care law included $1.4 trillion increase in spending, including expanding eligibility in Medicaid by one-third and creating a brand new health care entitlement.
l Stimulus. CBO currently puts the stimulus bill’s cost at $821 billion.
l Record Total Spending. The Federal government will spend $3.6 trillion this year, 24% of gross domestic product (GDP) and the highest burden on the economy since World War II. Spending has historically averaged a little over 20% of GDP.
l President’s Budget & Spending. According to CBO, the President’s budget never spends below 23% of GDP and by the end of the decade is right back at 24% of GDP.
l Republican Budget. The House Republican Budget would cut $6.2 trillion in spending from the President’s budget.
Deficits and Debt
l $1 Trillion Deficits. The deficit is on track to exceed $1 trillion this year, the third year in a row that deficits have exceeded $1 trillion.
l President’s Budget & “Framework.” According to CBO, under the President’s budget, annual deficits never fall below $700 billion and end the decade exceeding $1 trillion. When asked about the President’s April 13th new budget framework, Director Elmendorf testified, “We don’t estimate speeches.”
l Debt Explosion. Since President Obama took office, the total debt has grown from $10.6 trillion to $14.3 trillion, nearly a $4 trillion increase. This year total debt will exceed the size of the economy.
l Republican Budget. The Republican budget reduces the deficit by $4.4 trillion, puts the budget on a path to balance, and begins to reduce debt held by the public as a burden on the economy by 2014.
The president in public wants to operate on platitudes and generalities.Work together. A balanced approach. Eat your peas. The White House is avoiding specifics for a reason: The facts reinforce the public’s sense that the real issue is that we are spending too much. Republicans would do well to speak in specifics and to emphasize that real “balance” means spending at a slower rate (you’d think Ryan’s plan would actually halt the upward climb in spending; it merely restrains it a bit more than Obama’s) and keeping the size of the public sector in check so the private sector can grow and create jobs.
Once again we see that Ryan is the most effective spokesman and advocate for Republicans, in part because he is thoroughly versed in the details. Imagine if he were to debate Obama. In the fall of 2012. On national TV. With the presidency at stake. Is there any doubt who would come off better?
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