Wednesday, April 14, 2010

Violating The Tax Promise (Again), And What It Might Mean To Elections

Daniel Foster piles onto the mounting truckload of evidence we have of Obama's violation of his pledge concerning tax increases and the non-'rich':

Here is the president at an Arlington health-care rally in March.

So what this means is, is that small business owners and middle-class families, they're going to be able to be part of what's called a big pool of customers that can negotiate with the insurance companies. And that means they can purchase more affordable coverage in a competitive marketplace. (Applause.) So they're not out there on their own just shopping. They're part of millions of people who are shopping together. And if you still can't afford the insurance in this new marketplace, even though it's going to be cheaper than what you can get on your own, then we're going to offer you tax credits to help you afford it -– tax credits that add up to the largest middle-class tax cut for health care in American history. (Applause.)

Here is The Hill today, working from Joint Committee on Taxation numbers.

Taxpayers earning less than $200,000 a year will pay roughly $3.9 billion more in taxes — in 2019 alone — because of healthcare reform, according to the Joint Committee on Taxation, Congress' official scorekeeper for legislation. 

The new law raises $15.2 billion over 10 years by limiting the medical expense deduction, a provision widely used by taxpayers who either have a serious illness or are older.

Taxpayers can currently deduct medical expenses in excess of 7.5 percent of their adjusted gross income. Starting in 2013, most taxpayers will only be allowed to deducted expenses greater than 10 percent of AGI. Older taxpayers are hit by this threshold increase in 2017.

Once the law is fully implemented in 2019, the JCT estimates the deduction limitation will affect 14.8 million taxpayers — 14.7 million of them will earn less than $200,000 a year. These taxpayers are single and joint filers, as well as heads of households. 

"Loss of this deduction will mean higher taxes for 14.7 million individuals and families making under $200,000 a year in 2019," Sen. Chuck Grassley (R-Iowa) told The Hill. "The new subsidy for health insurance would not be available to offset this tax increase for most of these households."

What, you actually believed Obama when he promised not one dime more in taxes for those making less than $250k??  Sucker...!

It is interesting to note that most Americans -- a whopping 63% -- expect taxes to increase due to Obama's policies.  Philip Klein offers this observation:

...putting the policy debate aside for the moment and looking at things from a purely political perspective, if this poll is any indication, it looks like Obama is losing the argument. Unless the White House can change this perception, Republicans are likely to have a lot more success this fall's elections painting Democrats as tax hikers, than they did in 2006 or 2008.

Yeah, I'd say that's a pretty decisive failure on a key argument.  Of course, it probably doesn't help The One much that personal incomes are slumping - it's hard to accept paying the government more and more of your hard-earned money when you're getting less of it to begin with.  And a long-term unemployment rate of around 10% is not exactly something to write home about, either.

So how will this affect the next couple of elections?  Sean Trende at has a very interesting column, an excerpt of which includes:

So how bad could 2010 get for the Democrats? Let me say upfront that I tend to agree with analysts who argue that if we move into a "V"-shaped recovery and President Obama's job approval improves, Democratic losses could be limited to twenty or twenty-five seats.

That said, I think those who suggest that the House is barely in play, or that we are a long way from a 1994-style scenario are missing the mark. A 1994-style scenario is probably the most likely outcome at this point. Moreover, it is well within the realm of possibility - not merely a far-fetched scenario - that Democratic losses could climb into the 80 or 90-seat range. The Democrats are sailing into a perfect storm of factors influencing a midterm election, and if the situation declines for them in the ensuing months, I wouldn't be shocked to see Democratic losses eclipse 100 seats.


If unemployment doesn't abate and incomes don't rise much, President Obama could easily be hovering around 40% approval in November.

Or less, but that's just me.  Obviously, there's a whole lot more to it than just these components, so check out the link for a whole buncha' statistical support that show this shaping up to be a truly historical election, and not in a way that will please elected Dems.

Regardless, it's a pretty well established fact that most elections turn on the economy more than anything else, and as long as Obama's policies continue (and especially if even more of them are implemented), it's not going to improve, no matter how productive or resilient the American people may be.

If that's the case, it'll be an electoral massacre, and then there's a chance to bring America some genuine recovery and
restored freedom.

There's my two cents.

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