A Laughable Proposal
Treasury Secretary Timothy Geithner went to Capitol Hill yesterday to present President Obama’s plan for resolving the fiscal cliff. With just 31 days left until virtually every household in America is hit with massive tax increases, you would think Geithner would have a serious proposal to offer Republican leaders. He didn’t.
But don’t take my word for it. Here’s how Politico described it — “Geithner’s Fiscal Cliff Offer: Obama Wish List.” Here’s what the Washington Post wrote about Obama’s “fresh demands:”
“The proposal, delivered to the Capitol by Treasury Secretary Timothy F. Geithner … satisfies Democrats’ demands that negotiations begin on terms dictated by the newly-reelected president. The offer lacks any concessions to Republicans… After two weeks of talks between the White House and aides to House Speaker John A. Boehner (R-Ohio), it seemed to take Republicans by surprise.”
Here’s what we know about the president’s offer:
Mr. Obama is insisting on $1.6 trillion in tax increases, twice what he asked for last year.
Obama is also demanding $150 billion in new stimulus spending.
Obama is demanding another $30 billion extension in unemployment benefits due to continued weakness in the economy.
Obama is demanding that the death tax go back up to 45% on estates and family farms worth $3.5 million and more. Several influential Senate Democrats from farm states are opposed to that.
And Obama is demanding that Congress permanently give up its authority over raising the debt ceiling.
The president’s offer was so surprising that Senate Republican Leader Mitch McConnell said he “burst into laughter.” He told talk show host Hugh Hewitt that Geithner “ought to be embarrassed.”
How the numbers add up is a mystery. Raising income tax rates on the “wealthy” generates only about $800 billion. Raising the capital gains tax rate from 15% to 20% brings in an additional $240 billion. But where the additional $600 billion comes from is anyone’s guess.
Columnist Charles Krauthammer wrote: “Obama’s audacious new gambit is not a serious proposal to solve our fiscal problems. It’s a raw partisan maneuver…” Without “serious discretionary cuts, clearly spelled-out entitlement cuts, and real tax reform,” Krauthammer is advising congressional conservatives to “give Obama the full Clinton.” He wrote: “If Obama so loves those Clinton rates, Republicans should say: Then go over the cliff and have them all.”
Want a glimpse of what liberalism looks like? Check out Detroit. Liberals have dominated Detroit for decades. Like many states and localities, the city’s public employee union is a major impediment to necessary reforms.
During an interview yesterday, Mayor Dave Bing said, “We are in an environment, I think, of entitlement. We’ve got a lot of people who are city workers, who for years and years, 20, 30 years, think they are entitled to a [government] job and all that comes with it.”
The left always cloaks its demand for higher taxes and bigger government in the name of “compassion.” But where is the compassion for the taxpayers and entrepreneurs who are shouldering an increasing burden for bigger and bigger government? Not surprisingly, Detroit is shrinking, and is literally turning out the lights as taxpayers flee.
And The Hypocrisy Award Goes To…
When it comes to finding winners for hypocrisy awards, Washington politicians are always frontrunners, followed closely by Hollywood and media elites. But today’s hypocrisy award goes to a corporate executive.
Now, I’m a fan of free enterprise. But I have never understood the corporate chieftains who back liberal policies. If I could, I would gladly raise only their taxes!
So let’s consider today’s winner — Costco CEO Jim Sinegal. You may recall that Mr. Sinegal gave a prime-time speech at the Democratic National Convention this year. Presumably, he’s all in for tax increases, right? Well, it doesn’t appear that way.
This week Costco announced that it was giving shareholders a special dividend of $7 a share at a total cost of $3 billion. Costco is in such a hurry to rush this dividend out the door by the end of the year that it is actually borrowing the cash to make it happen.
Why the rush? Dividends are currently taxed at 15%. But new tax rates as high as 43.4% on dividends will kick in starting January 1st.
Now get this: Mr. Sinegal owns two million Costco shares, and his wife owns nearly 85,000 shares. He stands to make at least $14 million from the dividend. After taxes, he’ll keep about $12 million. But if he waited until next year, he’d get only $8 million. By cashing in this year, he’s avoiding $4 million in higher taxes. So much for “shared sacrifice.”
Perhaps Joe Biden needs to have a talk with Mr. Sinegal about his “patriotic duty.”
U.N. Recognizes “Palestine”
I want to debunk some misleading headlines resulting from yesterday’s vote by the United Nation’s General Assembly. Some have erroneously suggested that the U.N. created a Palestinian state. No, it didn’t. The General Assembly has no authority to create a new state. The Security Council can do that, but the Security Council did not vote yesterday.
U.N. Ambassador Susan Rice may have had difficulty getting it right on Benghazi, but she got it right yesterday when she said, “This resolution does not establish that Palestine is a state.” All the General Assembly did was to make something called Palestine a “non-member observer.”
Not one thing in Gaza will change for the better for a single Palestinian as a result. The only way Palestine can become a state is if the Palestinians reach a negotiated deal with Israel. That isn’t going to happen so long as Iran keeps pouring missiles into Gaza, which the Palestinians are firing into Israel.
Meanwhile, Christians are being slaughtered by radical Muslims in Africa, while Muslims are slaughtering other Muslims in Syria. But the United Nations is obsessed with one thing: shrinking the world’s only Jewish state.