This is the third part in the series about what the seven things we can expect if Obama wins reelection. In this posting we will be looking at the tax increases the middle class will see in an Obama second term.
In a previous posting, I wrote about the approaching Taxmageddon. Taxmageddon represents a perfect economic storm that threatens our weak economy. It will affect all races, rich and poor and even affect the global economy.
For starters, if Congress and the President fail to act before January 1 every citizen in the country will see a tax increase of more than $4100 (1) . This is because the tax cuts passed under the Bush administration expire. Opponents of these tax cuts still mistakenly refer to them as tax cuts but they ceased being tax cuts after they became law. Extending them now is only maintaining current tax rates and not a tax cut. If they expire due to inaction, everyone will experience a tax increase.
However, the opponents to the Bush tax cuts will try to tell us that these tax cuts were only tax cuts for the rich but that is a lie. Every rate was reduced by these tax cuts as well as the doubling of the child tax credit from $500 to $1000 for lower income individuals who have young children. In essence, allowing these rates to revert to their previous levels will be taking $500 per child away from low-income families. So, if you still believe these tax cuts were for the rich, you are delusional.
In addition to these automatic tax increases, January 1, 2013 is also when the mandates of Obamacare take effect. Obamacare will increase taxes an estimated $500 billion over the next 10 years. You can find a complete list of these increases, when they take effect, and even where they to find them in the bill at http://m.atr.org/article.php?id=7010.
So let us review. Under a second Obama Administration, the middle class will see less take home pay and lower tax refunds as well as additional taxes due to the supposedly free health care provided by Obamacare. However, these are the visible tax increases. There are also regulations that will increases prices we pay for energy, light bulbs, and even our cars.
Obama stated on January 17, 2008 when he was running for office that “So if somebody wants to build a coal-powered plant, they can. It’s just that it will bankrupt them because they’re going to be charged a huge sum for all that greenhouse gas that’s being emitted.” (2) Then candidate Obama was referring to fines that the EPA will place on companies, like coal-fired power plants, that emit above certain levels of CO2. Of course, these energy companies will pass these additional costs on to their customers. These increases in electricity rates will be hardest on the middle class who will already be dealing with Taxmageddon and represent a hidden tax on electricity.
If that was not bad enough, they are also considering banning incandescent light bulbs. Fortunately, Congress stopped this proposed ban but their legislation did not amend the law banning incandescent bulbs but only prohibited the government from spending any money to enforce the new standards (3) . It is highly possible a second Obama administration will begin enforcing the law.
I recently purchased some incandescent bulbs for my home and purchased four bulbs for about $1. The CFL bulbs that the government wants us to buy cost $3 to $4 each or a 1200% to 1600% increase. I challenge everyone to count the light bulbs in their houses or businesses and add up the cost of having to pay $3 to $4 each to replace them. This represents a hidden tax on choosing not to live in darkness.
Finally, there will be another hidden tax on our cars. This is because the U.S. Transportation Department raised the CAFÉ (Corporate Average Fuel Economy) standards on automobiles and trucks to 54.4 MPG by 2025 (4) . To comply with these increased standards automakers will be required to invest in research and development to find ways of building more fuel-efficient cars. Of course, automakers will pass these additional costs on to their customers. Automakers will also be making smaller cars out of lighter weight materials. So not only will our cars be more expensive, they will be unsafe which will also mean increases in our auto insurance rates. In other words, the middle class will be dealing with a hidden tax on new cars and auto insurance.
The Romney plan calls for maintaining current tax rates and then reducing them further for everyone in order to stimulate the economy. He plans on a full repeal of Obamacare, which will eliminate the tax increases contained in this monstrous legislation. He also calls for a curtailing of EPA regulations, which will prevent increases in the prices we pay for energy, light bulbs, and cars. We will also be able to continue driving safer cars and not have to pay more for auto insurance.
The choice is clear. With Obama, the middle class will experience lower take home pay, more taxes, and hidden taxes on energy and their cars. With Romney, we will have lower taxes, no new taxes, and no hidden taxes on our energy, light bulbs, and cars.
1. Boccia, Romina. What Taxmageddon Really Means for Families. blog.heritage.org. [Online] The Heritage Foundation, July 19, 2012. [Cited: August 28, 2012.] http://blog.heritage.org/2012/07/19/what-taxmageddon-really-means-for-families/.
2. WSAZ Charleston. Obama Called for Bankrupting Coal Fired Power Plants. www.youtube.com. [Online] WSAZ Charleston, November 3, 2008. [Cited: August 28, 2012.] http://www.youtube.com/watch?v=wF7Qm31LIDM.
3. Dinan, Stephen. Congress overturns incandescent light bulb ban. washingtontimes.com. [Online] The Washington Times, December 16, 2011. [Cited: August 28, 2012.] http://www.washingtontimes.com/news/2011/dec/16/congress-overturns-incandescent-light-bulb-ban/.
4. Nishimoto, Alex. Official: 2025 CAFE Standards Finalized, Fuel Economy to Raise Gradually to 54.5 MPG. wot.motortrend.com. [Online] Motor Trend , August 28, 2012. [Cited: August 28, 2012.] https://wot.motortrend.com/official-2025-cafe-standards-finalized-fuel-economy-to-raise-gradually-to-54-5-mpg-253781.html.
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