We Will All Pay

Obama has been touting the absurdly transparent notion that 95% of Americans will receive a tax cut under his “plan”.

As long as you make less than $250,000 $200,000 $150,000 $100,000 $50,000 and aren’t a corporation, you’ll be “safe.”

But businesses and employers are too smart for that; you will pay. We all will.

An increased tax burden will become a cost of doing business. A cost that will be passed through and ultimately borne by consumers via higher prices on goods and services that soon they won’t be able to afford any way because so many will have lost their jobs; rendered by the cutbacks (already in progress by the way) necessitated under an Obamanomics regime.

Does Obama really believe that the rich got that way by taking losses or swallowing costs?  When the price of gas or copper or labor or insurance or anything else increases, businesses and the people who own them have two choices: they can lose money or they can raise prices and pass the cost along to their customers.  What do you believe they will do?  If you need a moment to figure this out, you are probably a hardcore Democrat and you can stop reading now.

Anyone else, conservative, moderate, or apathetic, knows the answer: businesses cannot lose money.  They will pass along any increased taxes in the form of price increases.  The taxes they pay, you pay — eventually.  The only difference is that unlike the hated 5 percent of Americans that Obama openly brags of punishing with new taxes, you will not get a bill from the government declaring your new taxes.  You’ll just pay more for milk and gas and credit and clothes and iPods and everything else you buy.  At the end of the month, you will have less money and not know why.  Doubtless, Democrats will tell you to blame the rich for that too.

I heard someone (It wasn’t a wealthy person or a business owner – I can tell you that) say this week “No one believes that the rich will stop making money just because they have to pay higher taxes.”

I agree. The wealthy, business owners, the employers in America won’t stop trying to create wealth. To them, a bad day running their own business is better than a good day working for someone else. It’s their nature. They will innovate and do it with with less. Less employees – the very people that Obama professes to be the messiah champion of. Suckers.

The effect of liberal policies is reflected in the current (or should I say latest) crisis in our domestic automotive industry. Workers “served” so well over the years by their Unions will soon be losing their jobs as GM and Chrysler merge – Chrysler will disappear, only after closing half it’s manufacturing plants. Tens of thousands are about to lose their jobs.

Permanently.

Earlier this week we published a Battle Royale between General Motors and Chrysler in order to determine in a fun way which vehicles from each automaker that compete directly in the marketplace would survive if the two merged. Out of 12 matchups, GM vehicles won eight and Chrysler four. A new report by consulting firm Grant Thornton LLP largely confirms that our experiment was spot on. The report says that if a GM/Chrysler merger happens, only the Dodge Ram, Chrysler and Dodge minivans and a few Jeep models will survive.

…Chrysler’s model lineup across all three brands would largely be wiped out if a merger with GM happens, as well as the plants that build those models and the workers who do the building.

America’s auto unions have “spread the wealth” too, forcing employers to pay an artificially high price for labor, in turn bringing on the demise of the domestic auto makers because they simply can’t compete with higher-quality product produced by people that are willing to work harder for less money. In the end, it is no consolation that the American has had it so much better when his foreign counterpart still has his job.

Try as you may to manipulate our economy with “wealth spreading”, the market will ultimately determine the value of products, services and wages. Liberals decry the evil of outsourcing when it is their very policies that incent American corporations to seek it.

Employers are already running scared and their employees know it – hence the drop in spending and growth. We have one quarter of decline already in hand. One more, and we officially have a recession. And Obama hasn’t even taken the helm yet.

Obama’s economic plans will not “save” anyone. Raising taxes will simply be throwing sand in the gears of our economy and everyone will suffer for it. Exactly the wrong idea at exactly the wrong time.

I am less concerned for Obama’s now obvious ambitions and ideologies, and a liberal Congress doing his bidding. I’m more concerned that if Obama is installed, it will be exactly the other way around. There is a greater chance Barney Frank and Nancy Pelosi will see their plans manifest in policy than Obama’s “redistributive change.”

Admittedly John McCain hasn’t been the most charismatic media darling like his smooth-talking Marxist opponent but he represents the closest thing we have to a savior in a time we are about to need one. We need someone that will stands up to a democratic congress to bring some semblance of balance.

…and hope…that things don’t get a whole lot worse…for a whole lot of people.

37 thoughts on “We Will All Pay

  1. J – some of what you say I agree with, taxes will be passed along to consumers – though I’d remind you that they then, in turn, become part of the wage demand of the employee in any macro model where reasonable competition for employees exist. Where it doesn’t, employees are screwed, but not by taxes.

    One point I don’t agree with you on – the GDP fell last quarter and had nothing to do with Obama. Businesses may cut back, and they may cut back further with Obama as President – because they probably understand they’ll face greater scrutiny, but the blame for the current recession lies squarely at the feet of the corporatists, and no one else.

  2. but the blame for the current recession lies squarely at the feet of the corporatists, and no one else.

    Oh, for the love of God, blow it out your narcissistic, OCD butthole.

    The blame can be spread all over the God-damned place; from bleeding-heart idiots who mistook bad credit risks for racism and demanded more unwise lending from institutions, to those institutions who obeyed and then fudged the numbers so things looked bright and rosey until they simply couldn’t any more. Republicans and Democrats; liberals and conservatives; young and old; they’re ALL responsible for the current clusterfuck. And you’re particularly responsible, Peev, for being a longwinded numbnuts.

  3. Ugh, I didn’t have my morning Diet Pepsi yet, and as a result I took Peev seriously. It shall never happen again. Only mocking limericks from here on out.

  4. Penigma, methinks you need to revisit Econ 101 and think about what happens when you arbitrarily move the supply curve upward in terms of price by increasing taxes. Will the markets clear at a lower, or higher price, and will a lower, or higher, volume of product be sold?

    The answer, of course, is that price is higher, the amount sold is lower, and all of us are poorer. That works for widgets, and it works for jobs–with the important caveat that with higher taxes, the worker takes home a smaller portion of his “real” wage than before.

    And “capitalists” are to blame for the current SNAFU? Again, let’s revisit Econ 101. What happens to the market for debt when the Federal Reserve arbitrarily sets interest rates lower than market levels, and government requires that food stamps, welfare payments, and unemployment benefits be considered “income” for the purposes of a mortgage? (despite the fact that this “income” shows the applicant can’t find a good job)

    You would expect a lot of loans to be made that wouldn’t be made in a free market, wouldn’t you, and you’d expect that a lot of those would go south in a hurry, wouldn’t you?

    And that’s the fault of the bankers exactly why? Sorry, Penigma, you need to get yourself a basic supply/demand graph and figure out that there are indeed consequences to government action.

  5. Roosh – one comment on ‘being a corporation’ – per a couple of accountant friends – if you are a FOOL with a capital F you’d be taxed above $250,000 income or higher (smalll business issue). If you’re not a fool, you pay your profit to yourself as a bonus (assuming we’re talking about small businesses titled as either sole-props or S-corps), and the corporation is then NOT considered to have profitted at that level. You do know that a VAST number of US Corps pay ZERO income tax, I assume?

    Yess Assarian, you’re right, that’s what I said – please continue to write things I won’t read, nor care about. Please continue to lie about what I said – please continue to misconstrue it, it makes you look soooo much the wiser, and certainly, the more stable one. Talk about OCD – btw Ass- one comment – CRA does not equal subprime – you may want to actually read up on what CRA is, you clearly don’t understand it.

  6. Bike – actually – what we’re talking about is FAR beyond Econ 101.

    My contention is this, taxes are generally a zero sum game, until they stifle investment. As we observed in the 50’s-70’s, even taxation at 70-80% at the highest levels, didn’t do that.

    Further, macro demand in the employment market sets wages. As employees see shrinking abilities to buy, they tend to demand more in wages. Conversely, falling taxation leads only to short term cash uptick, as the employers see less overall wage pressure over time. Consequently, they slow down wage increases relative to inflation. Smaller government, by and large, only results in lower services – again, don’t mistake the above for advocating for taxation, rather, that taxation at a moderate level, by your measure, leads to lower consumption – I think that’s incorrect. It is a passthrough until it actually stifles investment.

    The point is this, this isn’t a vaccuum of price/demand, there are a host of factors. I will grant you one thing, though, money supply being too high during a time of inflation helps fuel risky lending. Greenspan recently admitted he now sees he made some serious errors there.

  7. BTW Bike – my job is in banking services, I have a pretty fair grasp of supply/demand here.

    I didn’t blame bankers – I blamed the myopic corporate world that thought it could simply offshore jobs, yet still engage in real-estate based risk lending, and assumed real estate prices would always escalate. Just to be clear.

  8. Peev, the only corporation that pays no income tax is the one that’s “losing” money. Moreover, if a company runs a decent pre-bonus profit and pays the entire amount out to its executives and directors as bonuses, we have a company that’s going to get a serious butt-whoopin’ from its investors. Good companies–the kind you or I would want to work for–pay income taxes because they have income. Got it?

    Nice liberal talking points, but nothing real is there.

  9. I’m sorry, I made the mistake of taking Assarian seriously. Won’t happen again. Assarian, just a reminder, I have no interest in what you say. You’ve shown time and again you are a sophomoric, purile, epithet spewing fool incapable of civil discussion. Go talk to a 3rd grader or perhaps even a kindergartner, they might talk a bit over your head, but at least you’d have someone with whom you could carry-on a peer to peer conversation.

  10. Bike – I was pretty clear about talking about S-Corps and Sole-props, their ‘investors’ are themselves. I clearly wasn’t talking about public companies, or even large private companies which were likely to have other investors. Joe the Plumber was a sole-prop situation – not a mid-sized company with other investors. The bitch here is about small companies getting whacked, and that’s just a conservative talking point, it’s not real. Got it?

    Also, I suggest you look up which companies and how many, aren’t paying income taxes in the US, it’s a lot – and it’s far beyond a talking point.

  11. http://www.foxbusiness.com/story/personal-finance/financial-planning/tax/companies-escape-federal-income-taxes/

    To wit my friend – (Bike). That’s 2/3rds of US companies don’t pay income taxes. Your comment that the only companies not paying income taxes are those not turning a profit reflects an ill-informed position on how big business actually works here in the good ole’ USA. Consequently, being lectured about Econ 101 – seems a little trite. No offense.

  12. The Penigma, a shit-headed douche,
    Who has logic that’s always obtuse
    Always contrarian,
    Calls me “Assarian,”
    How can I survive such abuse?

  13. For proof of Peev’s mental disorder,
    That his sanity is just on the border,
    Read “Shot in the Dark”
    And Peev’s endless remarks.
    A therapist? Peev can’t afford her.

  14. Retract my comment? No way, Peev. It’s a fact. Look deeper at your own sources, and you find that the sales of these companies–in heavily corporate America–are only $2.5 trillion annually. Now that’s a lot, but it’s only 20% of GDP or so, which means that you’ve picked out a bunch of smaller companies not making money (yet) and claimed that this is representative of the injustice of the tax system.

    That’s not evidence, that’s a talking point.

    And you claim to understand Econ 101, but deny the role the government played in the current mess? You can’t have both; you can either understand supply and demand (and understand what happens when government tries to move the curves), or you can claim that government bears no or little responsibility when it’s tried.

    If ONLY referring to supply & demand were “trite.” Too many people on both sides of the aisle wouldn’t know supply and demand if it whacked them on the rear.

  15. For anyone who responds to peev/pb/penigma/Don Preciado(our Precious One) remember:

    Keep in mind this is the same stellar intellect who asserts categorically that Richard Nixon was president in 1975, that the Cold War started in the administration of Calvin Coolidge and that Joseph Conrad wrote The Heart of Darkness about the Viet Nam War.

    An unrepentant narcissist, intellectually he fancies himself as Gulliver among the Lilliputians when demonstrably he is more aptly described as Gulliver among the Brobdingnagians. Literally an intellectual pygmy among giants.

    He is a low brow flamebait troll – nothing more.

  16. Peevee, please!

    Do try and cut your lying blather down to one paragraph per issue, won’t you?

    The lie isn’t going to get any better, or be any less obvious just because you try and hide it inside 12 paragraphs of nonsense, boy. Now run along…the CEO of Microsoft is probably waiting for you to call and tell him what to do with Vista….don’t keep him waiting.

    *laughing*

  17. The dolt we all know as peevee
    learns all of the crap he writes here on teevee
    he’s on top of his game
    but he’ll be writing in pain
    When his “Teletubbies” show gets the heavee

  18. Peev, congress requird that required banks to comply with CRA before they allowed them to open branches in other states — then gave the banks a little sugar by mandating that fannie/freddie back the mortgages they wrote.
    You have no knowledge of banking, of history, or economics.

  19. That peevee tells lies is well known
    and his assnozzelry has often been shown
    to hear himself speak
    he’ll talk for a week
    until out of his ass it’s all blown

  20. I wonder why this didn’t post the first two times?

    Because…:

    1) Comments with URLs (and certain catchwords) go into the moderation queue, and

    2) I’ve been in meetings all afternoon.

  21. Was it my dazzling use of “assnozzelry” that cinched it up for you JR?

    Indeed. As you all know by know, I am smitten with that word.

  22. Actually, Obama`s ‘tax the wealthy’ theme is based (in part) on letting the Bush tax cuts expire. And seeing that those tax cuts were across the board, it really means that everybody, not just the 250 grand (or whatever), will see a tax increase. Except, of course, those not paying any at all already, in which case they`ll get some more welfare payments. Shows you that the ‘95% tax cut’ is total bullshit. In fact, with the bottom 40% paying none at all, it actually means a tax increase for the top 60%.

  23. Believe me, we’ll all pay more taxes if Obama becomes President. In addition, he wants all these give-away programs that will bankrupt us. Many will lose our jobs and homes and food will be even higher than current prices. I’d like to give Obama and his band of liberal tax-and-spend illuminati lefties a good swift kick right out of office! What is this man thinking?

  24. Obama believes that if you fail, you have failed because government did not give you the help you needed and deserved. This is not a recipe for fiscal restraint.

  25. The law of supply and demand keeps getting mentioned. Perhaps an illustration is in order.

    When the supply of something, such as Peev’s commentary, greatly exceeds the demand for same, then the value of the excess supply greatly diminishes. Or, continuing the example of Peev’s commentary, becomes worthless.

  26. Terry said: “Obama believes that if you fail, you have failed because government did not give you the help you needed and deserved.”

    Bush failed, despite the help of the Florida secretary of state, U.S. Supreme Court, 41st President of the United States…

  27. What was that, angryclown?

    I’m trying to read what you wrote, but all I see is “Bush whiny whine whine whine …”. 😉

  28. NW, are you saying that Peev’s comments had worth the first time he made them? Au contraire, dear brother! :^)

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