DC vs. America on taxes

Like all his other promises, President Obama's no tax increase pledge to those making less than $250,000 is going out the window.

Whether or not Congress passes a Value Added Tax (VAT) or finds other ways to raise revenue, the middle class is about to be socked in the teeth with tax increase that will give the lie to the president's populist promise to raise taxes only on "the rich."

Michael Barone writing in the New York Post, shows how states are taking the lead in cutting spending - a lesson the federal government could learn:

When revenues crashed, congressional Democrats sent a third of the money in their $862 billion February 2009 stimulus package to state and local governments. The stated reason was to prevent interruption of services. The political motive was to maintain existing state and local payrolls and to keep the dues money flowing to the public-employee unions that were so generous to Democrats in the 2008 election.But that was one-time relief. As New York's Democratic Lt. Gov. Richard Ravitch notes, "The stimulus package just raised higher the cliff from which we all will have to jump off." Revenues still lag beneath the trajectory of spending.

Some states and localities have responded by raising taxes. But the two governors elected in November 2009 have not.

In Virginia, Republican Bob McDonnell has shepherded "painful cuts" in spending through a divided legislature. In New Jersey, Republican Chris Christie, facing an $11 billion deficit, has used his office's unusually great powers to cut spending way back. In the process, Christie has taken on the teacher unions.

In 2005, California Gov. Arnold Schwarzenegger backed ballot propositions to reduce the power of public-employee unions. The unions spent something like $100 million -- every dollar ultimately provided by taxpayers -- to drive Schwarzenegger's numbers down and beat the propositions.

That came at a time when surging prosperity seemed likely to continue. After losing on the ballot propositions, Schwarzenegger was unable or unwilling to stop the public-employee unions and obedient legislators and local officials from spending every dollar available and many more. After the financial crash in 2008, revenues crashed, and California state government faces something like insolvency.

The president's deficit commission has just begun their deliberations and already it appears likely they will ask for massive tax increases along with spending cuts.

Which do you think is more likely to be adopted by this Democratic Congress?


Hat Tip: Ed Lasky



Like all his other promises, President Obama's no tax increase pledge to those making less than $250,000 is going out the window.

Whether or not Congress passes a Value Added Tax (VAT) or finds other ways to raise revenue, the middle class is about to be socked in the teeth with tax increase that will give the lie to the president's populist promise to raise taxes only on "the rich."

Michael Barone writing in the New York Post, shows how states are taking the lead in cutting spending - a lesson the federal government could learn:

When revenues crashed, congressional Democrats sent a third of the money in their $862 billion February 2009 stimulus package to state and local governments. The stated reason was to prevent interruption of services. The political motive was to maintain existing state and local payrolls and to keep the dues money flowing to the public-employee unions that were so generous to Democrats in the 2008 election.

But that was one-time relief. As New York's Democratic Lt. Gov. Richard Ravitch notes, "The stimulus package just raised higher the cliff from which we all will have to jump off." Revenues still lag beneath the trajectory of spending.

Some states and localities have responded by raising taxes. But the two governors elected in November 2009 have not.

In Virginia, Republican Bob McDonnell has shepherded "painful cuts" in spending through a divided legislature. In New Jersey, Republican Chris Christie, facing an $11 billion deficit, has used his office's unusually great powers to cut spending way back. In the process, Christie has taken on the teacher unions.

In 2005, California Gov. Arnold Schwarzenegger backed ballot propositions to reduce the power of public-employee unions. The unions spent something like $100 million -- every dollar ultimately provided by taxpayers -- to drive Schwarzenegger's numbers down and beat the propositions.

That came at a time when surging prosperity seemed likely to continue. After losing on the ballot propositions, Schwarzenegger was unable or unwilling to stop the public-employee unions and obedient legislators and local officials from spending every dollar available and many more. After the financial crash in 2008, revenues crashed, and California state government faces something like insolvency.

The president's deficit commission has just begun their deliberations and already it appears likely they will ask for massive tax increases along with spending cuts.

Which do you think is more likely to be adopted by this Democratic Congress?


Hat Tip: Ed Lasky



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