Saturday, November 10, 2012

Election Mandate To Hold The Nation Hostage: Obama Willing To Go Over Fiscal Cliff And Increase Unemployment From 7.9 To 9.1 Percent To Appease His Liberal Friends And Raise Taxes On The Rich To Reduce The $1.1 Trillion Yearly Deficit By A Puny 7.5 Percent Or $82 Billion Per Year

From The Wall Street Journal, "The President's Tax Bludgeon: Instead of an olive branch, the President keeps campaigning:" by
on Friday, White House spokesman Jay Carney said the President will veto any bill that includes an extension of the current tax rates for those earning more than $250,000.
Congress's Joint Tax Committee estimates that raising taxes on income over $250,000 ($200,000 if you're single) will raise $823 billion over 10 years on a static revenue basis. That includes all revenue from increases in marginal income tax rates, capital gains, dividends, reinstating the phaseouts of deductions for the wealthy and also treating dividends as ordinary income.

That's only $82 billion a year in extra revenue when the federal deficit in fiscal 2012 was $1.1 trillion. So even if Mr. Obama gets his way, his tax increase would only cut the deficit by about 7.5%. And that assumes the tax increase would have no impact on economic growth. If growth slows below its already paltry pace, tax revenue would rise by less than expected despite the higher rates. [Emphahsis added.]
As CBO said in its analysis, "Economic Effects of Policies Contributing to Fiscal Tightening in 2013," of the effects of allowing the fiscal cliff to occur:
Substantial changes to tax and spending policies are scheduled to take effect in January 2013, significantly reducing the federal budget deficit. According to CBO’s projections, if all of that fiscal tightening occurs, real (inflation-adjusted) gross domestic product (GDP) will drop by 0.5 percent in 2013 (as measured by the change from the fourth quarter of 2012 to the fourth quarter of 2013)—reflecting a decline in the first half of the year and renewed growth at a modest pace later in the year. That contraction of the economy will cause employment to decline and the unemployment rate to rise to 9.1 percent in the fourth quarter of 2013. [Emphais added.]

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