President Obama’s decision to raise taxes by allowing the Bush tax cuts to sunset is having the predicted effect on the nation’s financial markets: they are cratering.
The poisonous combination of massive spending, an ineffectual Treasury Secretary (anyone seen Geithner lately?), incremental bank nationalization and a proposal to raise taxes on capital gains, dividends and the highest wage earners is sending the market to levels not seen since 1997. The insanity of this policy is that the president’s own budget projections are based on a recovery beginning next year, an inexplicable assumption given that the White House expects this to happen as it raises taxes on the very businesses that must create the job growth and income to bring about the end of a recession.
Tax avoidance is already being carefully planned by those targeted:
Dr. Sharon Poczatek, who runs her own dental practice in Boulder, Colo., said that she too is trying to figure out ways to get out of paying the taxes proposed in Obama’s plan.
“I’ve put thought into how to get under $250,000,” said Poczatek. “It would mean working fewer days which means having fewer employees, seeing fewer patients and taking time off.”
“Generally it means being less productive,” she said.
“The motivation for a lot of people like me – dentists, entrepreneurs, lawyers – is that the more you work the more money you make,” said Poczatek. “But if I’m going to be working just to give it back to the government — it’s de-motivating and demoralizing.”
Taxpayers (many of them Obama voters) are rapidly acquiring the mindset of tax avoidance as the president force feeds a radical fiscal policy agenda into the nation’s economy. As certain sectors of the moribund housing finance market are just showing some signs of bottoming out, President Obama is advocating a tax policy that will stifle the productive service sector of the economy.
Each day this market sheds value (30% since the election) it becomes more the Obama Market and less the excuse (inherited) the president’s apologists lunge to make.
The past few weeks have shown (in record time) that this president is in way over his head.