Raise the rate on capital gains reaped by taxpaying couples earning $500,000 a year or better from 23.8 percent to 28 percent?
Totally eliminate a tax break on inheritances, requiring estates to pay capital-gains taxes on securities as they’re inherited?
No tuition for those who qualify to attend community college and learn a skill or a trade?
Increase the amount of paid leave for workers?
Beef up the firewalls of cybersecurity?
These sound like good ideas, and President Obama is expected to pitch the details during his annual State of the Union address Tuesday night.
But it’s all talk – something at which the 44th president of the United States excels. Obama already has drawn his line in the sand with his veto stick, saying he’ll nix just about any bill the Republican-majority Congress sends him. Will the POTUS change his tune for the remaining two years of his presidency in the interest of putting a spit shine on his “legacy”? It’s doubtful. Mr. Obama could care less about the legacy he leaves. He doesn’t have to worry about it. The only legacy for which he’ll be remembered is breaking the color barrier on the Oval Office.
Congressional leaders already have indicated they want to put estate taxes out to pasture, not expand them. Ask any farm couple with a $500,000 spread if they want their sons and daughters to pay any inheritance taxes — let alone higher ones — when the younger generation inherits the family farm. Ask any small-business owner the same question. Bet you’ll get a resounding “no.”
And then there’s Obama’s proposed new fee to be assessed against an estimated 100 private-sector financial institutions nationally that show individual assets of more than $50 billion. Do we really need another regressive, socialistic fee on successful businesses? There’s got to be a better way.
The Obama administration says these proposals alone could generate $320 billion in revenue over a decade – which converts to $32 billion a year to be passed on to the middle class. How would these dollars be passed along? Through such initiatives as a $500 annual tax credit for families in which both husband and wife work; beefing up the child-care tax credit to $3,000 annually per child under age 5; streamlining education tax credits. But $320 billion is a pittance versus the more than $4 trillion the federal government spent last year. Considering that there are more than 115 million U.S. households, that $320 billion pass-along breaks down to about $278 a year per average taxpaying household.
So, is all this POTUS talk really going to make a difference to the so-called middle class? I’ve done the math. You draw the conclusion. It amounts to more hot air.
Moreover, amid all these pie-in-the-sky campaign talking points, where are the proposals to seriously cut federal spending? They’re nowhere to be found. Our president and many of our elected federal officials just want to keep feeding the monster of centralized government.
The best effort Obama could make to help the middle class would be to propose (1) a cut in federal spending by 7 percent annually across the board for the next three years; (2) seriously audit and eliminate waste and fraud in every single federal department and agency; (3) overhaul the federal tax code so that it reflects the charm and effectiveness of a single-rate “fair tax,” with minimum exemptions, and (4) totally eliminate some bureaucracies such as the federal Department of Education (let the states manage their respective schools), the federal Department of Energy (my energy gets sapped just thinking about the wasteful, results-starved spending by this department), and shifting the airport, train and bus-station security responsibilities away from the federal Transportation Security Administration to the private sector. Say what you will about Ron Paul. But several of his ideas make a lot of sense.
Unfortunately, none of them will be reflected in Tuesday night’s State of the Union.