Americans face in 2013 the largest tax increase since World War II and there is little hope of President Barack Obama or the divided Congress dealing with the looming crisis until after the November election, according to financial and budgetary experts.If Obama wins he'll never sign a bill that stops these tax increases. He wants the money. If he loses he'll punish America and allow these tax hikes to devastate the economy. Either way we lose.
Expiring tax cuts, new Obamacare tax hikes, and automatic cuts resulting from “sequestration” will cost Americans between $300 and $700 billion in 2013 if nothing is done. Analysts at Strategas, a global financial consultancy, say Obama’s campaign rhetoric has painted him into a corner that will make it impossible to resolve the crisis before Election Day.
“If Congress does not act within the year, the drag will be twice as large as the largest tax increase since World War II,” analyst Daniel Clifton said. But Obama “can’t accept the entire package of tax cuts because of how he is campaigning.”
Clifton predicts that the expiring cuts, pending hikes, and sequester cuts will drag the economy down by $573 billion, or 3.5 percent of gross domestic product; that would be double the burden of the tax increase implemented by Democrat Lyndon Johnson to fund his Great Society campaign in 1968.
The nonpartisan Congressional Budget Office predicts the economic drag will cause a 2 percent decline in real GDP for the year. The majority of the increases will come from the expiring Bush tax rates that Obama extended in 2010.
Friday, May 04, 2012
Posted by Rick Moore on 5/04/2012