With Obama Insane Spending Taxes Will Go Back Up To Carter Era

April 17 2009 | jveritas

[jveritas]

In his first three months in office Obama has authorized the biggest government spending in history and thus doubling the deficit and the national debt. Because of this insanely wasteful spending that count in the trillions of dollars the only way for Obama to make up for this money is to massively increase the taxes to the Carter Era levels.

Here is the simple math that proves the theory above.

For 2008 the most optimistic estimates for income tax revenues will be around $ 1.1 trillion which is similar to what the government collected in incomes taxes revenues in 2007. People in the top income tax bracket, currently at 35%, contributed to approximately 40% of the total tax revenues which amounts to $ 440 billions.

Obama is saying that this top income tax bracket should be raised to 39.5% i.e. the same as it was during the Clinton administration and before the Bush tax cuts. This increase in taxes for the top bracket will only generate extra $ 57 billions in government revenues. In other word it is a very small amount of money required to pay for the extra $ 3 trillions that Obama and his socialists have added to the government spending just in the first three months of his administration.

Based on the above it is impossible that the tax increase on the top bracket will be raised to just 39.5%. In the least estimate it will be raised to 50% if not to 70%. If it goes up to 70% then the top income bracket would contribute $ 880 billions and this is still way short of the many trillions of dollars that Obama and his socialists authorized for wasteful spending. Therefore Obama will certainly impose a massive tax increase on all other tax brackets except may be, big may be, on the lowest tax bracket.

When the Bush tax cuts expire on December 31 2010 the current 10% tax bracket will go up to 15%, the 25% will go up to 28%, the 28% to 31%, the 31% to 34% and the highest which 35% will go up to 39.5%. For Obama to pay for his trillions of dollars in spending all tax brackets, may be except the lowest one, will go up at least to pre-Bush tax cuts. For certain the highest tax bracket will go up to much more than 39.5% and possibly all the way to 70% where it was during the Carter administration.

Welcome back Carter.

[Concho]

Odumbo is trying to rule the US like the Mafia does Chicago.

[Doogle]

it will past it buy a very large number......our children face 30 years of debt...does anyone think ANY RETURN OF BAILOUT MONEY IS GOING TO BE USED TO PAY DOWN THIS DEBT?

[reaganaut1]

Thanks for your analysis of this important topic. You are presenting the “best-case scenario” for how much revenue tax rate increases will generate, assuming that pre-tax income will stay constant. Of course, people will respond to drastically higher tax rates by working less and finding ways to shift ordinary income to other types of income, so the extra revenue will be less than a static analysis would predict — the Laffer Curve.

[Reagan69]

Wait until inflation kicks in.

[camle]

if taxes went up to carter levels, that would be a surprise - they will go up to slavery levels for our children.

not only will our children have to pay higher taxes, but the companies that might have hired them will not be able to afrford to, because THEY’RE paying even higher taxes.

so those who would come after us must pay higher taxes with less opportunities and lower wages for whatever scraps of jobs they can land.

[jveritas]

I read an article by a left wing socialist yesterday and he told Obama that he must come forth and tell the American people the truth that he is going to raise taxes way up. He warned Obama that if he does not tell the American people the truth then his Presidency will be destroyed.

[jveritas]

Exactly. Printing trillions of dollars is the most certain way to hyper inflation.

[reaganaut1]

I read an article by a left wing socialist yesterday and he told Obama that he must come forth and tell the American people the truth that he is going to raise taxes way up.

Which one? America is infested with them. Seriously, I might post the article to warn Freepers of what is coming.

[wmfights]

Printing trillions of dollars is the most certain way to hyper inflation.

Why hasn't it happened? The Fed has started printing money to buy T-Bills (quantitative easing) but the CPI and PPI are both down (deflation).

The only answer I have is that credit is being eliminated and debt paid off (deleveraging) at such a rate that as the money supply has increased the available credit has decreased. I think we may see stagflation even with all the paper that has been printed. I don't believe lending is going to increase dramatically because credit worthy borrowers are preparing for a long downturn, the baby boomers are retiring (looking to downsize) and the "echo boom" is half the size. Also factor in the increasing govt spending and tighter control of private business and you don't see a big boom ahead.

Without the expansion all the money being printed is just sitting there, it's not flowing through the economy.

[DennisR]

The TEA parties are a solid start (there were about 5,000 in Olympia, WA, where the wife and I were). But we, the people, have to follow up by having “Push Back Until” events later this year, early next year, and for as long as we have to: http://pushbackuntil.com.

It will not be easy, but how interested are we in saving our country from an irresponsible Congress? If we, the people, do nothing, our country is finished.

“Be in D.C. to Push Back Until!”

[Centurion2000]

Wait until inflation kicks in.

IF the fed keeps buying treasuries from the gov, then that's exactly what's going to happen.

[jveritas]

Here is the article:

Obama must prepare the United States now for the tax pain to come