We’re hearing a lot on the news these days about the coming tax increases under Obama. Democrats are insisting on tax rate increases for the wealthy, while Republicans seem to be standing firm on “closing loopholes” to increase revenue. It’s enough to make your head spin! Normal Joes on the street are asking why both parties are so entrenched, and why can’t they just work together to keep us from plummeting over the fiscal cliff?
I would submit to you that both parties are already working together too closely, which is evidenced by the ridiculous debate we are having. What is the difference between closing loopholes or increasing tax rates anyway? The answer, of course, is no difference. Whether you “increase revenue” by raising tax rates, or if you do it by “closing loopholes” — the result is the same. More money will be confiscated from hard working Americans, and their taxes will go up. We’re debating about how to best raise taxes here folks, that is it! Republicans are not standing firm and refusing to raise taxes, but instead seem to be looking for a way to do it that will allow them to get out of their no-new-taxes pledge without upsetting the American public too much.
What do they mean when they say, “close loopholes” anyway? Tax loopholes are otherwise known as normal lawful tax deductions that most Americans take on their taxes each year. By calling them loopholes, you are implying that we are doing something wrong by taking these deductions on our taxes. People who use the term loopholes seem to be saying that people who use them are getting away with something that they shouldn’t be. Some examples of these loopholes are the 401k deposit deduction that allows you to escape paying taxes on money you invest for your retirement. Another example of a tax loophole would be the mortgage interest deduction, that encourages home ownership and helps prop up our struggling real estate market while saving countless Americans money on their taxes each year.
No matter how you look at it, tax increases under Obama will be some of the most brutal to impact our nation in a generation. While he wants to simply raise taxes on the wealthy to embolden supporters of his class warfare political stance, any such increases are sure to flow through our economy and impact each and every American. The result will be a sluggish economy that may even slip back into recession. Many Republicans would compare such a move to the “New Deal” that caused America to continue in an economic slump for a decade after FDR took over the presidency after the market crash of 1929.
In summary, whether you “close loopholes” (lawful tax deductions), or increase tax rates — YOU ARE STILL RAISING TAXES! Americans are overtaxed and haven’t received meaningful wage increases, or bumps in their 401ks, or bonuses in close to a decade now. Many Americans are struggling to find jobs, or if they can find a job — it simply doesn’t pay as much as they were making back in the earlier 2000′s. By raising taxes now, you are going to take valuable cash out of our economy, and you will negatively impact growth which will hurt all Americans, rich or poor.