Obamanomics 101
By Leland Conway
Uh-oh, the ideological left is bragging about President Obama’s big “middle class” tax cut that has just taken effect. Specifically, they are touting what they think it will do for Kentucky. One left leaning website made the optimistic claim that the thirteen additional dollars per week we’ll start seeing in our paychecks will put $800 million dollars back into Kentucky’s economy this year.
On its surface, the potential for an $800 million dollar economic boon sounds like a big deal, until you actually do the math.
First, the legislature in Frankfort just raised cigarette and alcohol taxes. The talking heads parroted the numbers given to them by politicians bragging that it will raise an additional $180 million in tax revenue. So we can cut that optimistic cash infusion from $800 million down to $620 million.
Then, the legislature in Frankfort raised the gas tax. They will tell you that this was not a tax increase, that they merely “froze” the rate at its current level. Don’t buy it. According to Kentucky law, the gas tax was supposed to be a percentage fixed to the wholesale price. Now that gas prices have dropped, they changed the law to their advantage. When prices go back up, and President Obama promises that they will, they’ll just “unfreeze” it again and continue to reap the benefits. Legislators boasted that this shenanigan would bring in an additional $120 million dollars in revenue. Now we can lower our tax cut projection to $500 million.
Next, the federal government is seriously considering cap and trade legislation to wage war against mythical global warming. The U.S. Department of Energy’s own estimates put the lower end cost of this dangerous legislation to each family at $700 additional dollars per year. (In reality, the higher energy costs and other charges will actually cost the average American family upwards of $3100 additional dollars per year.) Using the same whacked out math formula that the aforementioned liberal website used to arrive at the $800 million dollar cash infusion, we can now assume a cost to the commonwealth of an additional $840 million if cap and trade legislation passes. That makes the “middle class” tax cut now worth negative $340 million to Kentuckians.
Ouch.
Don’t blame me; I’m simply using their own math formula and government estimates – which are both overly optimistic. But I’m not done yet. As TV Salesman Billy Mays would say “But wait, there’s more!”
What they are claiming is a tax cut, is actually not a tax cut at all. It’s a tax credit. There is a big difference. A tax cut gives us some of our money back – end of story. This tax credit is actually considered by the government to be taxable income next year for some people. So after they’ve drained our pockets and given us a measly $13 per week, they’ll tax it back. Wow…a tax on a tax cut. Can this get any better?
Using their math formula again, that’s another $80 million dollar hit. Suddenly, Obama’s economic policies which some are claiming will give Kentuckians back $800 million dollars of their own hard earned money, has become a net $420 million dollar loss. Wow.
What started out as bragging about a tax cut becomes a complete charade when you take into account the real effect of Obamanomics, especially here in Kentucky, where we stand to be hit hardest by Obama’s anti-coal rhetoric and coinciding soaring energy costs. Bottom line folks, hold onto your wallets. President Obama, Congress and the Kentucky Legislature are going to cut our taxes until we can’t afford to live.
