Obama was essentially outright lying when he said in his convention speech, "I've laid out how I'll pay for every dime -- by closing corporate loopholes and tax havens."
Alan Reynolds, an amazing economist, points out, in depth, how Obama is simply making it up, in a WSJ article, How's Obama Going to Raise $4.3 Trillion?
Reynolds painstakingly points out, detail by detail, how Obama's proposals cannot even come close to paying for his new spending proposals - of which there are over $4 Trillion.
And, again, an interesting stat I've listed here before, with slightly different numbers:
- The bottom 60% of taxpayers pay less than 1% of income tax
- The top 3% pay nearly 60% of income taxes
This is very important stuff if you're interested at all in the economic and fiscal future of this country...
The new president, whoever he is, will start out facing a budget deficit of at least $1 trillion, possibly much more.
Mr. Obama has also promised to spend more on 176 other programs, according to an 85-page list of campaign promises (actual quotations) compiled by the National Taxpayers Union Foundation.
A trillion here, a trillion there, and pretty soon you're talking about real money. Altogether, Mr. Obama is promising at least $4.3 trillion of increased spending and reduced tax revenue from 2009 to 2018 -- roughly an extra $430 billion a year by 2012-2013.
Even if we have a strong economy, Mr. Obama's proposed tax hikes on the dwindling ranks of high earners would be unlikely to raise much more than $30 billion-$35 billion a year by 2012.
Mr. Obama is counting on increasing corporate tax collections by more than 25% simply by closing "loopholes" and complaining about foreign "tax havens." Nobody, including the Tax Policy Center, believes that is remotely feasible.
Whenever Mr. Obama claims he has not (yet) proposed any tax increase on couples earning less than $250,000, he forgets to mention his de facto $100 billion annual tax on energy. Like every other steep surge in energy costs, the Obama cap-and-trade tax would crush the economy, reducing tax receipts from profits and personal income.
The Joint Tax Committee reports that the bottom 60% of taxpayers with incomes below $50,000 paid less than 1% of the federal income tax in 2006, while the 3.3% with incomes above $200,000 paid more than 58%. Most of Mr. Obama's tax rebates go to the bottom 60%. They can't possibly be financed by shifting an even larger share of the tax burden to the top 3.3%.
Mr. Obama has offered no clue as to how he intends to pay for his health-insurance plans, or doubling foreign aid, or any of the other 175 programs he's promised to expand. Although he may hope to collect an even larger share of loot from the top of the heap, the harsh reality is that this Democrat's quest for hundreds of billions more revenue each year would have to reach deep into the pockets of the people much lower on the economic ladder. Even then he'd come up short.
Reynolds' full report can be found here.
More Dreamy Taxes at The Pantheon Journal.
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