As they say in the military: BOHICA.
On ABC’s This Week today, tax cheat Treasury Secretary Tim Geithner championed the expiration of the Bush tax cuts and pooh-poohed the economic impact of tax hikes on the highest earners in the country. It’s “responsible” to punish the wealthy, he argued.
Because after spending America into oblivion, Team Obama now wants to show the world that we are “willing as a country now to start to make some progress” on deficit reduction.
On NBC’s Meet The Press, Geithner crusaded for raising the capital gains tax rate.
Then, to show his commitment to fiscal responsibility, he said the administration is going to kick the can again on behemoth fiscal black holes Fannie Mae and Freddie Mac:
Speaking on NBC News’ “Meet the Press,” Geithner says he supports allowing the top capital gains tax rate to revert to 20 percent. It’s 15 percent now.
He also addressed the future of Fannie Mae and Freddie Mac, the mortgage buyers whose bailout has cost taxpayers $145 billion so far. The financial overhaul didn’t address their future.
The Obama administration has said it wants to wait until next year to determine their future.
“I think we’re not going to preserve Fannie and Freddie in anything like the current form,” Geithner said on “Meet the Press.” “We’re going to have to bring fundamental change to that market.”
Investor’s Business Daily makes clear that it is not just the “rich” who will pay for Obama redistributionism:
Through the end of this year, the federal estate tax rate is zero — thanks to the package of broad-based tax cuts that President Bush pushed through to get the economy going earlier in the decade.
But as of midnight Dec. 31, the death tax returns — at a rate of 55% on estates of $1 million or more. The effect this will have on hospital life-support systems is already a matter of conjecture.
Resurrection of the death tax, however, isn’t the only tax problem that will be ushered in Jan. 1. Many other cuts from the Bush administration are set to disappear and a new set of taxes will materialize. And it’s not just the rich who will pay.
The lowest bracket for the personal income tax, for instance, moves up 50% — to 15% from 10%. The next lowest bracket — 25% — will rise to 28%, and the old 28% bracket will be 31%. At the higher end, the 33% bracket is pushed to 36% and the 35% bracket becomes 39.6%.
But the damage doesn’t stop there.
The marriage penalty also makes a comeback, and the capital gains tax will jump 33% — to 20% from 15%. The tax on dividends will go all the way from 15% to 39.6% — a 164% increase.
Both the cap-gains and dividend taxes will go up further in 2013 as the health care reform adds a 3.8% Medicare levy for individuals making more than $200,000 a year and joint filers making more than $250,000. Other tax hikes include: halving the child tax credit to $500 from $1,000 and fixing the standard deduction for couples at the same level as it is for single filers.
Tip of the iceberg. Be sure to click through for the rest of the tax tsunami to come.
Via GOP leader John Boehner’s office:
Treasury Secretary Timothy Geithner and Speaker Nancy Pelosi (D-CA) delivered a 1-2 punch to America’s small businesses today by signaling that their taxes will soon go up. As The Wall Street Journal notes, these comments come “as a number of Democrats, including North Dakota Sen. Kent Conrad and Nebraska Sen. Ben Nelson, have begun echoing calls by Republicans and some economists to extend the tax cuts for all earners… Many economists believe the recovery is too fragile to risk raising taxes anytime soon and that doing so could stall economic growth.”
Both the National Federation of Independent Businesses (NFIB) and the National Association of Manufacturers (NAM) have warned against such a tax hike. NFIB tax counsel Bill Rys said, “The businesses that are most likely to be hit by this tax increase employ about a quarter of the U.S. work force.” And, according to NAM’s data, 196,000 manufacturers – a full 68% of all American manufacturers – file taxes as individuals; these taxpayers had an average taxable of income well above $250,000, suggesting a large negative impact on manufacturers as well.
At his weekly press briefing, House Republican Leader John Boehner (R-OH) said that Americans are still asking ‘where are the jobs?’:
“For 18 months, we’ve had a government that believes that change is only possible by passing 2,000-page, trillion-dollar monstrosities, and one after another. Americans are still asking the question ‘where are the jobs?’ and all President Obama has to offer them is more stimulus spending, more debt, higher taxes and more job-killing regulations.
“The financial regulatory bill that the president signed this week is just another big-government power grab that will make it even harder to create jobs. It provides for permanent bailouts to President Obama’s Wall Street allies at the expense of small businesses and community banks across our country. Frankly, it’s just more of the same.”
The Dems think class warfare will be a winner at the polls. No, really.
More “show the world” rhetoric:
In recent days, fiscal conservatives like Senators Kent Conrad of North Dakota and Evan Bayh of Indiana expressed support for extending the tax cuts at all income levels, at least temporarily.
Senior administration officials said there was no interest in such a plan at the White House, which intends to have Treasury Secretary Timothy F. Geithner lead an effort to make the case that continuing tax breaks for the rich will not help lift the economy, but eliminating them will help reduce the deficit.
“We do not buy into the theory that because the economy is still recovering, extending tax cuts for the highest earners is a necessary or effective policy response,” said Gene Sperling, counselor to Mr. Geithner.
“While we are supporting measures like small-business lending and tax cuts to spark growth,” Mr. Sperling added, “it is also important to show the world that we are following through on our commitment to long-term fiscal discipline.”
Video flashback – The Taxman Cometh:
My tax advice: Remember in November.
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