Obama Will Kill Ben Franklin -- Can You Afford Him?
By Brad LaMorgese Posted in Taxes — Comments (0) / Email this page » / Leave a comment »
Obama Will Kill Ben Franklin – Can You Afford Him?
By Brad M. LaMorgese (an attorney in Dallas, Texas)
Benjamin Franklin once declared, “A penny saved is a penny earned.” Hardly. Americans, here’s the sad tale of Obama’s tax plan for your last Benjamin.
For instance, let’s talk about the last $100 from your paycheck. This hypothetical presupposes you are “lucky” enough for the government to declare that you are “rich.” Here’s the Obama tax plan – or as I like to call it Socialism/Communism. And the government gets this money without any effort – it’s on your back!
Obama would take 60% of the last $100 from your W2 earnings, right off the top. How can this be? He wants the top bracket at 40% and he would add another 20% for FICA and Medicare because he proposes to remove the cap on those taxes for every dollar over $100k. That leaves you with $40 and the government with $60. That’s not so bad though, under the disgraced Jimmy Carter (Obama’s role model) the tax rates were even higher. Oh, if you’re married, Obama would levy more taxes on you than if you were single.
Do you think the government took enough of your money already? No, they going to tax you again and again and again and again on your after-tax dollars.
Score: Government 60, Working Stiff 40.
Now if you are foolish enough to save and invest that $40, it gets worse (but if you spend it, they’ll tax you on that too). Assume you invest the $40 in a mutual fund, hoping to leave it to your kids. The government would then take 35% of the corporation’s earnings off the top. This lowers the value of your $40 and the return on your investment. That probably will cost you at least $8 in hidden taxes to you on your $40. A lot of research indicates that might even cost you $20. You get no money out of this transaction though, but you sure lost that money to the government. Score: Government 68, Working Stiff 40.
Next, assume you had a really good year and your mutual fund company paid you a $10 dividend. The government, under Obama, would get $4 and you would get to keep $6. This is called the 40% dividend tax. Good luck to all the elderly who are living on fixed income investments like this.
Score: Government 72, Working Stiff 46. Hey, look on the bright side, at least they didn’t take over half your money this time!
Next, assume during this same year that your mutual fund went up the average 7% of the stock market. You would pay a 20% tax on it. So, your mutual fund went up $2.80, but the government makes you pay .56 of that in capital gains tax. You get to keep $2.24. Score: Government 72.56, Working Stiff 48.24.
Now assume you are stupid enough to die in 2011 or later and you were defined as “rich.” Obama’s new/old death tax will purloin 55% of your estate (that has already been at least triple-taxed as you can see), or $26.53 of your $48.24. Thus, your kids will be left with $21.71 out of your last $100. In the words of Mignon McLaughlin, “Philosophy teaches a man that he can’t take it with him; taxes teach him he can’t leave it behind either.”
Score: Government 99.09, Working Stiff 21.71.
The government’s take on your last Ben Franklin was $60 + $8 + $4 + .56 + $26.53 = $99.09. That’s over a 99% tax of your last Ben Franklin that the government plans to steal. Thanks to your efforts, your family got to keep at least some of it because you invested it. Your return on all your efforts was a pittance compared to the government’s effortless return.
Now your kids can either spend the $21.71 (in my home state of Texas they will take more than 8% in sales tax on simple products – if you stay in a hotel or travel, it gets much worse), or maybe your kids just put it toward their own exorbitant property taxes or state income tax burden.
The government’s solution (with gas and food prices rising on regular Americans) is to take more of your money. They say they can spend your money better than you would. For instance, take a look at some of my favorite “earmarks” from the past:
The Charles Rangel "Monument to Me" ($1.95 million),
Rodent control in Alaska ($113,000),
Olive fruit fly research in France ($213,000), and
A river walk in Massachusetts ($1 million).
Reverend Jonathan Mayhew long ago coined the rallying cry “No Taxation Without Representation!” I would like to bring the Right Reverend back today and see how he would like the taxes with representation. The American Revolution was started for lower taxes than Obama’s proposed taxes.
And the concept of no taxation without representation does not work anymore: my representative in Texas, the Hon. Kenny Marchant scored an absolute best “100" in the vote ratings for 2006 released by the Americans for Tax Reform for holding the line against taxes and spending. I could not have asked for better. Our Texas senators John Cornyn and Kay Bailey Hutchison both scored outstanding 90's.
Yet, we cannot reach across our voting borders and vote out Charles Rangel, Nancy Pelosi (who scored 0's – an “obama-nable” failing grade on taxes), or Charles Schumer, Barbara Boxer, Chris Dodd, Tom Harkin, Richard Durbin, Ted Kennedy (scored 5's – still failing to protect Americans from taxes) and the like. This list goes on and on with those in Congress who relish spending your money, but who you cannot vote out of office. This is the exact sort of “virtual representation” the British proclaimed was sufficient for American colonists.
Here’s a simple solution. Cut taxes and make them a very low percentage of the national economy, make it easy for people to work hard and get rich, make it easy for companies to create jobs and wealth, and get government out of their way and their pocketbooks. That sounds more like John McCain’s plan.