Sunday, June 13, 2010

‘But Isn’t the GOP Going to Romp This Fall...and Won't That Mean I Get To Keep MY Bush Tax Cuts?’

When it comes to keeping the Bush Tax Cuts, or 'repealing' Obamacare for that matter, lots of people think (and hope...and pray) the world is going to change on a dime this fall when the Republicans ride in on their horses like the Fifth Cavalry to 'Save the Republic!'

Given all the voter anger out there, it sure seems like there could be a massive sea-change this fall. But will it be 'enough' to change things at all?

We are not so sure there is a tsunami coming that will sweep in 100 new GOP Congressmen and 15 Senators like some people love to dream about. We are concerned that there has been way too much 'counting of chickens before they have hatched' on both the Republican and Tea Party side of things so far this year.

We were positively stunned when we voted this spring in the primaries to see that less than 7% of all registered voters took the time and effort to get out of their house and vote, even with a 30-day voting period before primary day. That meant that less than 4% of all adults over the age of 18 who were eligible to vote actually voted and made all the decisions on the candidates the rest of us will be voting on in November.

That meager voter participation in the primaries doesn’t seem to confirm to us that there is a massive tide of voter anger building to ‘throw all the incumbent bums out!’. Does it look that way to you?

We would rest a lot easier if the Republicans in Congress had offered solid proposals such as Paul Ryan's 'Roadmap for the Future' budget package for a vote on the floor of the House as a indication of how fiscally tough they intend to be if given the keys to the majority once again this fall.  Alas, they have adopted the 'rope-a-dope' strategy Muhammad Ali used to fell George Foreman in the "Rumble in the Jungle' in 1974; hey! maybe it will work for them this time around as it did for Ali.

Realistically, a 45-seat pickup for the GOP in the House and a 5-6 gain in the Senate is entirely possible and would be monumental in scope.  However, it would only be on par with many mid-term elections in a Presidential first term where voters decide to clip the wings of the 'messiah' they just put into the White House two years previous.

First-term presidential terms almost always prove the old adage: ‘Be careful for what you pray for (and vote for) and say you want…because you might just get it!’

Look at the recent British campaigns where the same sort of voter anger against the incumbent party was detected prior to the election. The Brits wound up with a mixed Parliament, a coalition government being formed with no real mandate either way, liberal or conservative.

We should have been so lucky in America over the past decade. ‘Stalemated government’ would have at least mitigated the massive increase of federal debt since 2002; nothing major would have passed without considerable compromise; and major spending or tax-cutting bills might have at least had the chance of being ‘paid for’ by spending cuts or tax hikes elsewhere.

Under 'unified government' under either of the established, and possibly ossified, major parties in the US since 2000, all we got was a total mess.

We are thinking about printing up T-shirts that say: “Congress Gave Me All The Tax Cuts and Spending Programs I Ever Wanted...and All My Children Got Was This Lousy $24 Trillion National Debt!’

Place your order today.

In the absence of very clear voter mandates to be fiscally responsible, politicians in Washington, or anywhere in history, tend to default to ‘the easy thing’ which is: 1) cut taxes; and/or 2) raise spending. Classic definition of political cowardice and pandering through the ages. The problem is that we can’t afford to do either any more in America.

Our point here, especially in context to whether the Bush Tax Cuts are going to be extended or not at the end of this year, is to point out that regardless of what happens in this fall’s general election, the cards are 99% all in the hands of President Barack Obama in the White House. And it will stay that way for the next 2 years for sure until he is either defeated in 2012 or returned to office which means he will hold the cards for another 4 years until 2017.

Unless the GOP gets to 280 Members of Congress in November, up from 175 or so today, and 60 GOP Senators, up from 41 today, both highly unlikely events, there is no way the GOP can override any of his expected vetoes of any effort to extend these Bush Tax Cuts beyond the end of 2010...about 200 days from today.

President Obama might be politically-pliable enough to be forced into an agreement like Bill Clinton was in 1997 with the GOP Congress. We don't know because he has not had to compromise very much with a Congress that virtually agrees with him on every issue so far. We find it impossible to believe that he would agree to a full, permanent extension of all the Bush Tax Cuts under any circumstance, especially given his seething disdain for people who make over $250,000. There is also the nagging reality and 'inconvenient truth' that foreign investors (see "Xie") will demand much more rapid progress on reducing these enormous deficits going forward.

President Obama's philosophy seems to be crystal clear by now; he is determined to redistribute as much wealth as he can during his presidential term and the only place you can redistribute wealth ‘from’ is from people who have it or can make it.

You can’t redistribute wealth from poor people who don’t have it in the first place.

And our reading of the tea leaves indicates that President Obama considers any income source between $75,000 and $100,000 or so to be 'fair game' when it comes to higher taxes. Even if a person earning $45,000 receives a one-time windfall of $250,001 from gains received from the disposal of an asset such as a farm or rental property or from an inheritance of an estate...he/she would be in the cross-hairs of higher taxation under President Obama.

President Obama seems to feel that the producer of any 'high net-income' owes it to the federal government to pay a much higher rate of tax than under current law.

Do you agree with President Obama? Honestly? Deep-down-in-your-heart sort of agreement? How about if it is you paying the higher taxes?

When did the American people hand over the rights to their hard work, creativity and assets to a single entity in Washington, DC to make the final decisions on how your hard-earned and 'sweated-over' money should be collected, confiscated, divvied-up and spent?

Many of you will soon be bidding a fond farewell to the Bush Tax Cuts you have known and loved over the past 7-8 years.  But if that is so, perhaps something positive could come out of it in the form of a 'deal' to get us out of this ditch we seem to find ourselves now mired in....


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