Thursday, February 26, 2009

President Obama's Budget Is A Deceitful Hoax; The Fuzzy Math Does Not Add Up

Our President officially thinks we are all stupid. The numbers just do not add up! Even if he were to take all of income of the top 2% earners (which sounds crazy, but I'm putting nothing past these Liberal Wing Nuts these days) they still cannot afford the Trillions and Trillions of new spending the Administration and Congress are proposing.

Once again, Dear Leader has lied to the American people. And he is playing games with YOUR MONEY!

There is NO WAY he will be able to sustain the Liberal spending spree without raising taxes on more than just the "wealthy" 2%.

So what's it going to be? Break his promise (he has already done that dozens of times)? Or try to escape office before he can be blamed politically for bankrupting America?

The Wall Street Journal reported:

President Obama has laid out the most ambitious and expensive domestic agenda since LBJ, and now all he has to do is figure out how to pay for it. On Tuesday, he left the impression that we need merely end "tax breaks for the wealthiest 2% of Americans," and he promised that households earning less than $250,000 won't see their taxes increased by "one single dime."

This is going to be some trick. Even the most basic inspection of the IRS income tax statistics shows that raising taxes on the salaries, dividends and capital gains of those making more than $250,000 can't possibly raise enough revenue to fund Mr. Obama's new spending ambitions.

Consider the IRS data for 2006, the most recent year that such tax data are available and a good year for the economy and "the wealthiest 2%." Roughly 3.8 million filers had adjusted gross incomes above $200,000 in 2006. (That's about 7% of all returns; the data aren't broken down at the $250,000 point.)

These people paid about $522 billion in income taxes, or roughly 62%of all federal individual income receipts. The richest 1% -- about 1.65 million filers making above $388,806 -- paid some $408 billion, or 39.9% of all income tax revenues, while earning about 22% of all reported U.S. income.

Note that federal income taxes are already "progressive" with a 35%top marginal rate, and that Mr. Obama is (so far) proposing to raise it only to 39.6%, plus another two percentage points in hidden deduction phase-outs. He'd also raise capital gains and dividend rates, but those both yield far less revenue than the income tax. These combined increases won't come close to raising the hundreds of billions of dollars in revenue that Mr. Obama is going to need.

The Foundry at Heritage explains the deceit and the "trickery".
The President is using some budget trickery. He assumes the extension of all 2001 and 2003 tax cuts and the AMT patch into the baseline, and then eliminates some of the same tax cuts, and counts them as “new” revenues.

The President also employs budget trickery on spending. He first assumes that Iraq spending will continue indefinitely at 2008 levels (which was never going to happen, according to the military’s own Joint Campaign Plan), and then calculates $1.5 trillion in savings against that baseline. If you eliminate that gimmick, President Obama increases spending by nearly $500 billion over ten years – not even counting the $634 billion health care reserve fund.

The budget proposes $1,133 billion in regular discretionary spending in 2010, and claims that is a 7 percent hike over the 2009 level of $1,062 billion. But that actual 2009 baseline level – reflected in the budget resolution and appropriations bills — was $1,012 billion. This makes the actual proposed budget increase 12 percent.


Our President is arrogant, radical, dishonest and dangerous.

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