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Obama’s Tax Plan Will Only Help The Rich Get Richer And The Poor Get Poorer

By: Steve Johnson

7/12/2012 - 0 Comments

Obama wants to extent the Bush tax cuts for everyone with an income under $250,000.

He tells us that the reason for this is became the government needs more money and the rich can afford to pay more. 

To convince us to go along with this idea, he tells us that the rich are getting richer on the backs of the poor.  He tells us that the rich are not paying their ‘fair share’ because they are not yet becoming poor like the rest of the nation.

And because the rich are not getting poor like that rest of the nation, they must be manipulating the rest of us and hiding the money they earned from the rest of us. 

But there is a problem with this line of thinking.

There is a problem with the idea that the rich are wrong to try to save their money from the wealth destruction that is underway.

Obama Created The Rich

The problem is that progressive taxes like what Obama is proposing are the reason for the growing income gap we have today.

Obama’s ideas created some of the richest people in America.

His tax plan will not help the poor like he talks about, instead it will help the rich – many of his friends and advisors – will be the biggest beneficiaries.

Instead of raising the Federal income, the rich will simply lower their stated incomes below the $250,000 limit.  They can easily do this by changing how much money their business pays them or how much investments they sell each year.

The result will hurt the poor in several ways, here are a few;

First, more money becomes stored in Corporate assets and equipment much like it is today in non-profit organizations, which will decrease the debt ratio of Corporations and increase the value of Corporate stock – which are primarily owned by the rich. The adjustment will cause businesses to have less cash to hire workers, leaving the poor and middle class with less money to pay for things like food and rent.

Second, the rich will be making longer term investments leaving less money for short-term investments like venture capitalists that invest in entrepreneurs.  Small new businesses create 80-90% of the jobs in our nation.  Fewer jobs will deepen the recession and cause more people to lose their homes, cars, boats, etc.  The rich will be the only people with money to purchase these assets and so they will get even richer by purchasing these assets from the middle class at fire-sale prices.  Then the rich will rent these things back to the poor and middle-class at higher interest rates then they had before, locking them in to a life of poverty.

Third, if that is not bad enough, the government will project much higher Federal income and with those projections they will spend the money before it even comes in with new programs and existing programs that are already bankrupt.  When the projected new money does not come in, they will increase the debt limit and borrow more money from the future generations of children of the poor and middle-class.  And by the time the national debt comes do, the rich will be so rich that they will leave the country and move to a different place. 

Obama’s progressive tax plan has been tried most recently in California over the past decade and it has bankrupted the state, and it has caused the rich to get even richer and driven the poor and middle class into generational poverty.

The poor and middle-class need to understand what Obama’s tax plan will really do.  Obama’s promises of handouts will not put more money in your hands. It is a trick to take what little money you have left.  The promises are empty.

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