/PRNewswire / -- President Barack Obama and the U.S. Congress have gone on a spending and debt spree that the country cannot afford. As a result, a spontaneous grassroots movement is emerging from every corner of the nation with a message for Congress and the President: Stop spending us into an inevitable spiral of debt and higher taxes ... now!
To that end, groups of Americans will be meeting in towns and cities across the nation on April 15 for "Tax Day Tea Parties." These "Ten Tax Facts" are an effort by the Institute for Policy Innovation (IPI) to make sure the American people are well-informed as they gather together to express their concern about the direction Washington is headed.
#1 .Under the Obama budget, the Congressional Budget Office (CBO) projects that the national debt will double over the next five years; and it will triple over the next 10 years to $17.3 trillion.
#2. Under the Obama budget, CBO projects that the national debt will soar over the next 10 years from 40 percent of GDP today to a shocking 82.4 percent. (Ronald Reagan left office with the national debt at 42 percent of GDP).
#3. The President's budget also states that total federal borrowing will grow by $2.7 trillion this year alone, an increase of 27 percent in one year!
#4. The budget President Obama proposes for this year increases federal spending by an incredible 34 percent over the previous year, with a total of $4 trillion in federal spending, the highest ever.
#5. The federal budget deficit (not the national debt) would reach $1.845 trillion this year, according to the CBO, the highest ever. That would be more than seven times Reagan's largest budget deficit of $221 billion, which caused so much consternation among Reagan's critics.
#6. The CBO estimates that this Obama budget deficit will total an astounding 13.1 percent of GDP, more than one-eighth of the entire U.S. economy, for the federal budget deficit alone! Under George Bush, the federal deficit for 2008 was 3.2 percent of GDP. The deficit for fiscal year 2007, in the last budget adopted when Congress was controlled by Republican majorities, was $162 billion, or 1.2 percent of GDP.
#7. The Obama budget also includes $1 trillion in tax increases on the upper 5 percent of income earners, mostly tax rate increases. But the top 5 percent of income earners already pays 60 percent of all income taxes.
#8. The Obama budget projects that revenues from the corporate income tax will more than double in 3 years, increasing, in fact, by more than 124 percent.
#9. Another $645 billion tax increase comes from President Obama's anti-global warming cap and trade system, which is essentially an energy tax on the production and use of carbon energy, such as oil, natural gas, and coal.
#10. While the Obama administration claims to have cut $2 trillion from the budget over 10 years, fully $1.5 trillion of those "cuts" actually represents the troop drawdown in Iraq, which was already scheduled to occur under the Bush administration. Of the remaining $500 billion in budget "savings," fully $311 billion is categorized as "interest savings" but is actually an additional tax increase on upper income earners.
It's not as if you can't stimulate economic growth while at the same time cutting government spending. President Reagan did it. Reagan adopted budget cuts soon after he entered office equal to close to 5 percent of the federal budget at the time. Even with his defense buildup, total federal spending declined from a high of 23.5 percent of GDP in 1983 to 21.3 percent in 1988 and 21.2 percent in 1989. That's a 10 percent real reduction in the size of government relative to the economy. Reagan's policies conquered inflation and started a 25-year period of economic growth, which would look awfully good today.
Showing posts with label spending. Show all posts
Showing posts with label spending. Show all posts
Wednesday, April 1, 2009
Monday, March 2, 2009
Obama Budget Contains More than $1.6 Trillion in Tax Increases... Possibly As Much As $2.2 Trillion
/PRNewswire-USNewswire/ -- While some media outlets are reporting more than $1 trillion in new taxes in the Obama budget, Grassfire.org has identified more than $1.6 trillion, and possibly as much as $2.2 trillion.
"The President's 'carbon tax' is the single biggest tax-increasing item in his budget, and the largest in history," says Steve Elliott, President of Grassfire.org. According to Grassfire.org researchers examining the official published documents on the budget, the $645 billion in carbon taxes pushes the total tax increases in President Obama's budget to a minimum of $1.64 trillion. Go here for a complete breakdown: http://www.resistnet.com/profiles/blogs/obama-budget-more-than-16
Elliott adds that $1.6 trillion is just the starting point: "The Obama budget only accounts for the portion of the carbon tax being allocated to so-called 'clean energy technologies' and the 'Make Work Pay' tax credit. If Congressional Budget Office estimates are correct, the actual carbon tax could be double what Obama's budget shows. That dramatically increases the new taxes in the Obama budget to $2.2 trillion," says Elliott.
Elliott also notes that Americans who are faced with tightening personal budgets are growing more and more intolerant of the spending ways of Washington. "The President is right that a 'day of reckoning' is coming, but that reckoning will take the form of citizens who are fed up with politicians expanding the tentacles of government deeper and deeper into our lives and our pocketbooks."
Many of those frustrated Americans have already added their names to a national Grassfire.org petition that has already rallied over 100,000 citizens urging Congress to "Stop the Spending." To view the petition: http://www.grassfire.org/112/petition.asp
"The President's 'carbon tax' is the single biggest tax-increasing item in his budget, and the largest in history," says Steve Elliott, President of Grassfire.org. According to Grassfire.org researchers examining the official published documents on the budget, the $645 billion in carbon taxes pushes the total tax increases in President Obama's budget to a minimum of $1.64 trillion. Go here for a complete breakdown: http://www.resistnet.com/profiles/blogs/obama-budget-more-than-16
Elliott adds that $1.6 trillion is just the starting point: "The Obama budget only accounts for the portion of the carbon tax being allocated to so-called 'clean energy technologies' and the 'Make Work Pay' tax credit. If Congressional Budget Office estimates are correct, the actual carbon tax could be double what Obama's budget shows. That dramatically increases the new taxes in the Obama budget to $2.2 trillion," says Elliott.
Elliott also notes that Americans who are faced with tightening personal budgets are growing more and more intolerant of the spending ways of Washington. "The President is right that a 'day of reckoning' is coming, but that reckoning will take the form of citizens who are fed up with politicians expanding the tentacles of government deeper and deeper into our lives and our pocketbooks."
Many of those frustrated Americans have already added their names to a national Grassfire.org petition that has already rallied over 100,000 citizens urging Congress to "Stop the Spending." To view the petition: http://www.grassfire.org/112/petition.asp
Thursday, February 12, 2009
To Stimulate Economy, Obama Should Revive Reagan-Era Initiative, Law Professor Says
The Economic Recovery Tax Act of 1981 (ERTA) offers a blueprint for fiscal stimulus that would be far more effective than the stimulus package currently before Congress, says Bill Brown, a visiting professor of the practice of law at Duke University.
“Simply pushing money into the economy via infrastructure projects, no matter how well intentioned, is not the answer,” says Brown who joined the Duke faculty after an extensive career on Wall Street at Goldman Sachs, AIG and, most recently, Morgan Stanley, where he was global co-head of listed derivatives.
At a time plagued by slow economic growth, high interest rates and high inflation, ERTA not only reduced tax rates, but established a powerful set of incentives to promote investment in income-producing “capital assets” -- plant, property, and equipment, according to Brown. It resuscitated the Kennedy-era investment tax credit (ITC), which gave business partial reimbursement for the purchase of every new income-producing asset they acquired. And it added to this subsidy by allowing all those assets to be depreciated extremely rapidly under the new Accelerated Cost Recovery System (ACRS).
“ERTA helped break us out of the economic quagmire of the 1970s,” Brown says. “Sure, it lowered tax rates for everybody, but its most important legacy was in getting this country investing in the economy again. The government essentially said to the private sector ‘you think of where our economy needs the money the most, and as long as you put your money there first, we will follow right behind you.’”
The effect was almost immediate, says Brown. “By 1983, the economy was going like gangbusters. And the best thing about it was that the private sector was allocating the money more efficiently than would have been possible had the government been directing the investments. This meant the money got to people who had no ability to lobby Washington to spend money on their businesses.
“President Obama and Congress should step back from the current spending bill and turn it into a stimulus bill. Identify the overriding strategic visions, invest in infrastructure for those visions and then bring back the ITC and ACRS deductions to get the private sector back in the game,” he says. “They could even provide two tiers of ITC and ACRS: one for old industry and a higher level for the most important parts of President Obama’s vision.”
“Simply pushing money into the economy via infrastructure projects, no matter how well intentioned, is not the answer,” says Brown who joined the Duke faculty after an extensive career on Wall Street at Goldman Sachs, AIG and, most recently, Morgan Stanley, where he was global co-head of listed derivatives.
At a time plagued by slow economic growth, high interest rates and high inflation, ERTA not only reduced tax rates, but established a powerful set of incentives to promote investment in income-producing “capital assets” -- plant, property, and equipment, according to Brown. It resuscitated the Kennedy-era investment tax credit (ITC), which gave business partial reimbursement for the purchase of every new income-producing asset they acquired. And it added to this subsidy by allowing all those assets to be depreciated extremely rapidly under the new Accelerated Cost Recovery System (ACRS).
“ERTA helped break us out of the economic quagmire of the 1970s,” Brown says. “Sure, it lowered tax rates for everybody, but its most important legacy was in getting this country investing in the economy again. The government essentially said to the private sector ‘you think of where our economy needs the money the most, and as long as you put your money there first, we will follow right behind you.’”
The effect was almost immediate, says Brown. “By 1983, the economy was going like gangbusters. And the best thing about it was that the private sector was allocating the money more efficiently than would have been possible had the government been directing the investments. This meant the money got to people who had no ability to lobby Washington to spend money on their businesses.
“President Obama and Congress should step back from the current spending bill and turn it into a stimulus bill. Identify the overriding strategic visions, invest in infrastructure for those visions and then bring back the ITC and ACRS deductions to get the private sector back in the game,” he says. “They could even provide two tiers of ITC and ACRS: one for old industry and a higher level for the most important parts of President Obama’s vision.”
Monday, February 9, 2009
Institute for Policy Innovation: Abuse of English Language to Call Pork Bill 'Stimulus'
/PRNewswire-USNewswire/ -- Today, the U.S. Senate passed a bill that not only will fail to create new jobs, but is teeming with runaway government spending for increased welfare, overgrown bureaucracy, pork, political payoffs and other waste.
"To call this spending bill 'stimulus' is an abuse of the English language," said Peter Ferrara, director of entitlement and budget policy at the Institute for Policy Innovation (IPI).
The centerpiece of the stimulus bill is little more than a welfare check -- a $500 per worker "tax credit" totaling $150 billion.
"There will be no economic net gain because the government will just borrow $150 billion from the private sector to give away, nor will there be any added incentives to save, invest, or start or expand a business, or create jobs," said Ferrara.
IPI president Tom Giovanetti agreed, saying, "This is like going through the neighborhood breaking windows to provide economic stimulus for the glass company."
To create a sustainable economic stimulus, comprehensive reductions in tax rates must be implemented. This includes:
-- Slashing the corporate tax rate to 20%;
-- Cutting the federal corporate capital gains rate from 35% to 15%;
-- Returning billions in investment capital to America by allowing
multinational companies' overseas earnings to be subject only to a 5%
corporate tax;
-- Allowing immediate deductions for all capital investment in machinery
and equipment, rather than extending only partial deductions over
several years through depreciation;
-- And unleashing America's energy industry through deregulation,
assuring a low-cost, reliable energy supply, adding to GDP and
creating jobs.
In the words of Ronald Reagan, government is not the solution to the problem, government is the problem. The only solution to getting the U.S. economy booming again is to unleash the private sector through fundamental tax relief.
"To call this spending bill 'stimulus' is an abuse of the English language," said Peter Ferrara, director of entitlement and budget policy at the Institute for Policy Innovation (IPI).
The centerpiece of the stimulus bill is little more than a welfare check -- a $500 per worker "tax credit" totaling $150 billion.
"There will be no economic net gain because the government will just borrow $150 billion from the private sector to give away, nor will there be any added incentives to save, invest, or start or expand a business, or create jobs," said Ferrara.
IPI president Tom Giovanetti agreed, saying, "This is like going through the neighborhood breaking windows to provide economic stimulus for the glass company."
To create a sustainable economic stimulus, comprehensive reductions in tax rates must be implemented. This includes:
-- Slashing the corporate tax rate to 20%;
-- Cutting the federal corporate capital gains rate from 35% to 15%;
-- Returning billions in investment capital to America by allowing
multinational companies' overseas earnings to be subject only to a 5%
corporate tax;
-- Allowing immediate deductions for all capital investment in machinery
and equipment, rather than extending only partial deductions over
several years through depreciation;
-- And unleashing America's energy industry through deregulation,
assuring a low-cost, reliable energy supply, adding to GDP and
creating jobs.
In the words of Ronald Reagan, government is not the solution to the problem, government is the problem. The only solution to getting the U.S. economy booming again is to unleash the private sector through fundamental tax relief.
Growing the Economy: Three Models of Failure, Three Models of Success
/PRNewswire-USNewswire/ -- The following release was issued today by Americans for Tax Reform:
There's a debate raging in Washington over how to improve economic growth. On the one side, President Barack Obama, Harry Reid, Nancy Pelosi and the liberal establishment wants to "stimulate" the economy by stealing money from taxpayers and giving it to unionized government make-work projects. On the other side, free market conservatives favor lower marginal tax rates, full business expensing, tax-free savings, free trade, sound money, and lower government spending. In the recent past, there have been three models of "stimulus" failure, and three models of free-market success.
Failed "Stimulus" Plans
1. In 1997, Argentina's economy began to worsen. In response, Argentine non-interest government spending grew from 23% of GDP in 1997 to 25% of GDP by 2001. The equivalent in the U.S. would be an immediate increase in government spending of nearly $300 billion. Despite this, average real GDP growth in the period was just 0.7%. (1)
2.In the 1990s, Japan tried to grow government to "prime the pump" of the economy. Government spending grew from 32% of GDP in 1991 to 38% of GDP in 2000. The equivalent in the U.S. would be an immediate increase in government spending of nearly $900 billion. After this experiment, Japan's per-capita national income fell from 86 percent of the U.S. level in 1991 to only 74 percent in 2000. The people of Japan became poorer after this massive government "stimulus." (2)
3. In 1929, the U.S. entered the Great Depression. In the decade following, a Republican failed president (Herbert Hoover) and a Democrat failed president (FDR) increased federal spending from 3.4% of GDP in 1930 to 10.3% of GDP in 1939. The equivalent today would be an immediate increase in government spending of $1 trillion. Despite all the spending of the New Deal, the U.S. economy actually shrank from $97.4 billion to $89.1 billion, or nearly 10 percent in 10 years. (3)
Successful Growth Models
1. In late 1963, Congress implemented the Kennedy tax cut, which lowered the top marginal personal income tax rate from 91% to 70%. Until LBJ raised taxes to pay for the Vietnam War and Great Society, average annual real GDP growth from 1964-1966 was 6.2%.
2. In 1983, the Reagan tax cuts were fully implemented. They reduced the top marginal income tax rate from 70% to 50%, and also cut the corporate income tax rate. The top personal rate was reduced to 28% in 1986. Average annual real GDP growth from 1983 to 1989 (the last year before the George H.W. Bush tax hike) was 4.3%.
3. In 2003, President George W. Bush cut the top personal rate from 38.1% to 35%, the dividend rate from 38.1% to 15%, and the capital gains rate from 20% to 15%. Until Democrats took over Congress in 2006 and announced the imminent end of these lower tax rates, real GDP growth averaged 3.0% per year.
There are two models at work here:
-- Keynesian Stimulus. The government spends taxpayer money on projects
to "create jobs." The only jobs that are created are in the sprawling
government bureaucracies. Because the government cannot spend any
money on the economy it did not first take from the economy, this
model cannot create economic growth. It failed in Japan and Argentina
in the 1990s, and right here in America in the 1930s. Economic growth
was stagnant or negative in all three cases. The government purely
and simply wasted taxpayers' money.
-- Growth Economics. When marginal tax rates on work, saving, and
investment are cut, incentives to produce more work, savings, and
investment go up. The Kennedy tax cuts worked. The Reagan tax cuts
worked. The Bush tax cuts worked. In all three cases, lowering
marginal tax rates caused economic growth to rise and for all
Americans to be better off.
How to Grow the Economy Now and Permanently
1. Cut the top personal income tax rate from 35% to 25%
2. Cut the corporate income tax rate from 35% to 25%
3. Cut the capital gains and dividends rate from 15% to 0%
4. Move to full business expensing of all business investments
5. Stop double-taxing U.S. employers on their income earned overseas
6. Kill the Death Tax
7. Kill the Alternative Minimum Tax (AMT)
8. Cut the payroll and self-employment tax rate in half, from 15.3% to 7.5%
9. Cap government spending to the pre-Bush level of 18% of GDP
10. Require full government transparency to ensure that taxpayer money is not wasted
Americans for Tax Reform (ATR) is a non-partisan coalition of taxpayers and taxpayer groups who oppose all federal, state and local tax increases. For more information or to arrange an interview, please contact John Kartch at (202) 785-0266 or at jkartch@atr.org.
Permalink: http://www.atr.org/content/html/2009/feb/020909pr-growing_the_economy_three_mo dels.html
Notes:
(1) http://www.imf.org/external/np/speeches/2002/071702.htm
(2) http://www.heritage.org/research/economy/bg2222.cfm
(3) http://www.gpoaccess.gov/usbudget/fy09/sheets/hist01z2.xls
(4) All real GDP growth figures in the successful models taken from U.S. Department of Commerce, Bureau of Economic Analysis, National Income and Product Accounts.
There's a debate raging in Washington over how to improve economic growth. On the one side, President Barack Obama, Harry Reid, Nancy Pelosi and the liberal establishment wants to "stimulate" the economy by stealing money from taxpayers and giving it to unionized government make-work projects. On the other side, free market conservatives favor lower marginal tax rates, full business expensing, tax-free savings, free trade, sound money, and lower government spending. In the recent past, there have been three models of "stimulus" failure, and three models of free-market success.
Failed "Stimulus" Plans
1. In 1997, Argentina's economy began to worsen. In response, Argentine non-interest government spending grew from 23% of GDP in 1997 to 25% of GDP by 2001. The equivalent in the U.S. would be an immediate increase in government spending of nearly $300 billion. Despite this, average real GDP growth in the period was just 0.7%. (1)
2.In the 1990s, Japan tried to grow government to "prime the pump" of the economy. Government spending grew from 32% of GDP in 1991 to 38% of GDP in 2000. The equivalent in the U.S. would be an immediate increase in government spending of nearly $900 billion. After this experiment, Japan's per-capita national income fell from 86 percent of the U.S. level in 1991 to only 74 percent in 2000. The people of Japan became poorer after this massive government "stimulus." (2)
3. In 1929, the U.S. entered the Great Depression. In the decade following, a Republican failed president (Herbert Hoover) and a Democrat failed president (FDR) increased federal spending from 3.4% of GDP in 1930 to 10.3% of GDP in 1939. The equivalent today would be an immediate increase in government spending of $1 trillion. Despite all the spending of the New Deal, the U.S. economy actually shrank from $97.4 billion to $89.1 billion, or nearly 10 percent in 10 years. (3)
Successful Growth Models
1. In late 1963, Congress implemented the Kennedy tax cut, which lowered the top marginal personal income tax rate from 91% to 70%. Until LBJ raised taxes to pay for the Vietnam War and Great Society, average annual real GDP growth from 1964-1966 was 6.2%.
2. In 1983, the Reagan tax cuts were fully implemented. They reduced the top marginal income tax rate from 70% to 50%, and also cut the corporate income tax rate. The top personal rate was reduced to 28% in 1986. Average annual real GDP growth from 1983 to 1989 (the last year before the George H.W. Bush tax hike) was 4.3%.
3. In 2003, President George W. Bush cut the top personal rate from 38.1% to 35%, the dividend rate from 38.1% to 15%, and the capital gains rate from 20% to 15%. Until Democrats took over Congress in 2006 and announced the imminent end of these lower tax rates, real GDP growth averaged 3.0% per year.
There are two models at work here:
-- Keynesian Stimulus. The government spends taxpayer money on projects
to "create jobs." The only jobs that are created are in the sprawling
government bureaucracies. Because the government cannot spend any
money on the economy it did not first take from the economy, this
model cannot create economic growth. It failed in Japan and Argentina
in the 1990s, and right here in America in the 1930s. Economic growth
was stagnant or negative in all three cases. The government purely
and simply wasted taxpayers' money.
-- Growth Economics. When marginal tax rates on work, saving, and
investment are cut, incentives to produce more work, savings, and
investment go up. The Kennedy tax cuts worked. The Reagan tax cuts
worked. The Bush tax cuts worked. In all three cases, lowering
marginal tax rates caused economic growth to rise and for all
Americans to be better off.
How to Grow the Economy Now and Permanently
1. Cut the top personal income tax rate from 35% to 25%
2. Cut the corporate income tax rate from 35% to 25%
3. Cut the capital gains and dividends rate from 15% to 0%
4. Move to full business expensing of all business investments
5. Stop double-taxing U.S. employers on their income earned overseas
6. Kill the Death Tax
7. Kill the Alternative Minimum Tax (AMT)
8. Cut the payroll and self-employment tax rate in half, from 15.3% to 7.5%
9. Cap government spending to the pre-Bush level of 18% of GDP
10. Require full government transparency to ensure that taxpayer money is not wasted
Americans for Tax Reform (ATR) is a non-partisan coalition of taxpayers and taxpayer groups who oppose all federal, state and local tax increases. For more information or to arrange an interview, please contact John Kartch at (202) 785-0266 or at jkartch@atr.org.
Permalink: http://www.atr.org/content/html/2009/feb/020909pr-growing_the_economy_three_mo dels.html
Notes:
(1) http://www.imf.org/external/np/speeches/2002/071702.htm
(2) http://www.heritage.org/research/economy/bg2222.cfm
(3) http://www.gpoaccess.gov/usbudget/fy09/sheets/hist01z2.xls
(4) All real GDP growth figures in the successful models taken from U.S. Department of Commerce, Bureau of Economic Analysis, National Income and Product Accounts.
Tuesday, January 20, 2009
41 Student Groups Demonstrate on Barack Obama’s Inauguration Day
(BUSINESS WIRE)--Today, Barack Obama’s Inauguration Day, students on college campuses nationwide will declare, “One day of Obama is enough. It’s time for change.”
41 chapters of the group Young Americans for Liberty (YAL) have confirmed their participation in a nationwide activism event to demonstrate against Barack Obama’s policies. Each chapter will distribute flyers, hand out pocket constitutions, and talk to students about the dangers of Barack Obama’s policies on their campus.
“Not all young people are excited about the policies of President Obama. Who do you think will pay for all of this reckless spending? Who will fight and die in these unnecessary wars oversees? Our generation will,” says Jeff Frazee, Executive Director of YAL, in Arlington, VA.
YAL’s event, Real Change Requires R3volution, seeks to peel back the marketing of Barack Obama and expose his policies for what they really are – not real change. Before taking office, Barack Obama has put forth an $800 billion economic plan, promised more troops in Afghanistan, and begun talks of reviving the draft.
“YAL chapters will demonstrate that there is a strong opposition to Obama’s youth movement and policies. He does not have a monopoly on our generation,” says Frazee.
41 chapters of the group Young Americans for Liberty (YAL) have confirmed their participation in a nationwide activism event to demonstrate against Barack Obama’s policies. Each chapter will distribute flyers, hand out pocket constitutions, and talk to students about the dangers of Barack Obama’s policies on their campus.
“Not all young people are excited about the policies of President Obama. Who do you think will pay for all of this reckless spending? Who will fight and die in these unnecessary wars oversees? Our generation will,” says Jeff Frazee, Executive Director of YAL, in Arlington, VA.
YAL’s event, Real Change Requires R3volution, seeks to peel back the marketing of Barack Obama and expose his policies for what they really are – not real change. Before taking office, Barack Obama has put forth an $800 billion economic plan, promised more troops in Afghanistan, and begun talks of reviving the draft.
“YAL chapters will demonstrate that there is a strong opposition to Obama’s youth movement and policies. He does not have a monopoly on our generation,” says Frazee.
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