As the White House gears up to let the biggest tax hike in American history go into effect on Jan. 1, Treasury Secretary Timothy Geithner — a millionaire banker appointed by Barack Obama despite the fact he cheated on his own income taxes — said July 25 that allowing big tax hikes targeted at wealthy Americans is \u201cthe responsible thing to do\u201d and will not further cripple the nation\u2019s economic growth.<\/p>\n
\u201cJust letting those tax cuts that only go to 2 percent to 3 percent of Americans, the highest-earning Americans in the country, expire, I do not believe it will have a negative effect on growth,\u201d while it would send an important message to the world about America\u2019s commitment to fiscal austerity, Mr. Geithner said on ABC.<\/p>\n
And so the biggest-spending administration in the history of the world, an outfit that wouldn\u2019t even cut pork-barrel spending somewhere else to fund its unilateral extension of unemployment benefits two weeks back, now smugly asserts a desire to protect its reputation for \u201cfiscal austerity.\u201d<\/p>\n
I admit it, I\u2019m impressed. My chutzpah detector just overloaded and died.<\/p>\n
Does no one remember how the Democrats levied a big tax on yachts back during the Clinton years — guaranteed to hurt \u201conly the rich\u201d?<\/p>\n
The rich — including Massachusetts Sen. John Kerry — merely turned to getting their yachts built in New Zealand. Who really got hurt? Whole villages full of blue-collar Maine boatbuilders.<\/p>\n
Did no one notice the Aug. 2 Associated Press story headlined \u201cAs the rich tighten their belts, the rest of us feel the squeeze,\u201d in which reporter Jeannine Aversa notes, \u201cEconomists say overall consumer spending has slowed mainly because the richest 5 percent of Americans — those earning more than $207,000 — are buying less\u201d?<\/p>\n
She even tells us why: \u201cThe most sweeping tax cuts in a generation are due to expire in January. … The wealthy may be keeping some money on the sidelines because of uncertainty over whether they will soon face higher taxes.\u201d<\/p>\n
\u201cMay be\u201d? \u201cUncertainty\u201d? They know<\/em> they\u2019re going to be whacked with higher taxes if they hang around these parts, and so they\u2019re burying their gold in the back yard as fast as they can dig … if not somewhere in Indonesia.<\/p>\n \u201cCompanies have responded by refusing to step up hiring,\u201d The AP reports. \u201cThe housing market is stalling. …\u201d<\/p>\n Cartoonist Mike Ramirez at Investors Business Daily got it about right, offering us a floppy-eared Barack Obama sternly declaring: \u201cCongress needs to extend unemployment insurance beyond two years because no business owner in their right mind will hire anyone until I\u2019m gone.\u201d<\/p>\n \u201cWe need to make sure we can show the world that we\u2019re willing as a country now to start to make some progress bringing down our long-term deficits,\u201d Mr. Geithner said last week, speaking to Jake Tapper on ABC\u2019s \u201cThis Week.\u201d<\/p>\n Not by trimming spending, mind you, but with the Vladimir Lenin plan — \u201ctax the rich.\u201d<\/p>\n Yet the planned Democratic tax hikes won\u2019t damage the economy? Really?<\/p>\n Let\u2019s look at just one concrete example:<\/p>\n Up in Seattle there\u2019s a high-tech business called GM Nameplate — no relation to \u201cGeneral Motors.\u201d<\/p>\n The CEO, Donald Root, bought controlling interest in this manufacturer of graphic overlays, touch screens, brand identity nameplates and other machined components from the founding families in 1977, guiding it through the dramatic change to digital technology. Under his leadership, GM Nameplate added plants around the United States as well as in Singapore and China, and grew to $80 million in annual revenue.<\/p>\n But Don Root is now 70, and he has Parkinson\u2019s Disease. He\u2019d like to turn over the business to his four sons, all of whom are involved in the company in some way.<\/p>\n Problem is, unless the elder Mr. Root takes things in his own hands and arranges to die by Dec. 31, the expiration of the Bush tax cuts will increase the federal death tax — payable by Mr. Root\u2019s heirs on the value of the company — from today\u2019s \u201czero\u201d rate to 55 percent, effective Jan. 1.<\/p>\n Should Don Root die and leave his company to his children in 2011 or 2012, they estimate they\u2019ll owe $25 million in taxes, on a business purchased and grown with after-tax income in the first place. And no \u201ctime payment plan\u201d will be offered.<\/p>\n To get that amount of money, they\u2019d almost certainly have to sell the company at a fire sale price.<\/p>\n Instead, according to Dick Patten, who runs the American Family Business institute, lobbying against the death tax on behalf of America\u2019s millions of owners of small businesses and family farms, the Root family are now in discussions with a buyer who\u2019d like to purchase GM Nameplate right now, at a market price.<\/p>\n The only catch? The buyer wants to move the entire company — with all its machine tools and all it jobs — to Indonesia.<\/p>\n And — because the Bush death tax cut is due to expire in four months — they\u2019re considering that offer NOW. Those jobs could leave America, permanently, NOW — not in a couple of years … because of the Reid-Obama tax hikes now anticipated in just 148 days.<\/p>\n \u201cHarry Reid is the one deliberately blocking any change right now,\u201d says Mr. Patten.<\/p>\n Nor is this an isolated example. At any given time during the reign of the once and future death tax, 11,000 grieving families were in court challenging the IRS\u2019s valuation of their family business, hoping against hope to keep their firms alive and offering employment, here in America.<\/p>\n But returning to that environment — not to mention vast hikes in marginal income tax rates on investors perfectly free to move their operations offshore — \u201cwon\u2019t cripple the nation\u2019s economic growth,\u201d Mr. Geithner?<\/p>\n Mr. Obama has supported keeping the cuts in place only for individuals making less than $200,000 a year and for families earning less than $250,000.<\/p>\n But this is precisely where our great Community Organizer\u2019s schoolchild economics fail the real-world test. What will it avail middle-income families to see their own tax rates stay the same, if their breadwinner works for Mr. Root, whose company and jobs will be sent overseas because his death tax goes from zero to 55 percent in five months, because he\u2019s \u201crich\u201d?<\/p>\n Unless, of course, they\u2019re all willing and able to move to Indonesia, and work for whatever wages now prevail there.<\/p>\n \u201cBusinesses with narrow margins, they\u2019re going to go under,\u201d responded Steve Forbes, publishing magnate and two-time Republican presidential candidate, on CNN\u2019s \u201cState of the Union.\u201d<\/p>\n \u201cEven entrepreneurs, people who are willing to buck the tide\u201d are \u201cvery hesitant,\u201d he said, \u201cbecause they don\u2019t know what kind of costs they\u2019re going to get hit with.\u201d<\/p>\n Roll up, roll up for the mystery tour!<\/p>\n Or should that be: \u201cLet me take you down, \u2019cause I\u2019m going to … Strawberry Fields, where nothing is real.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":" As the White House gears up to let the biggest tax hike in American history go into effect on Jan. 1, Treasury Secretary Timothy Geithner — a millionaire banker appointed by Barack Obama despite the fact he cheated on his own income taxes — said July 25 that allowing big tax hikes targeted at wealthy […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[18,9],"tags":[],"class_list":["post-570","post","type-post","status-publish","format-standard","hentry","category-economics","category-taxation"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/pWqFl-9c","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/vinsuprynowicz.com\/index.php?rest_route=\/wp\/v2\/posts\/570","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vinsuprynowicz.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vinsuprynowicz.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vinsuprynowicz.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/vinsuprynowicz.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=570"}],"version-history":[{"count":3,"href":"https:\/\/vinsuprynowicz.com\/index.php?rest_route=\/wp\/v2\/posts\/570\/revisions"}],"predecessor-version":[{"id":2040,"href":"https:\/\/vinsuprynowicz.com\/index.php?rest_route=\/wp\/v2\/posts\/570\/revisions\/2040"}],"wp:attachment":[{"href":"https:\/\/vinsuprynowicz.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=570"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vinsuprynowicz.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=570"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vinsuprynowicz.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=570"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}