by Guest Author George Jarkesy
A common theme since the Occupy Wall Street pageants commenced last year has been that Democrats and more specifically the President somehow represent the 99% and that Republicans only support the 1 %. This misguided thinking is aided and abetted by the Administration and mainstream media which continuously and purposely try to divert attention from the real issues that are Nation is suffering from (issues where President Obama’s track record is weak at best). The President would have Americans focus on themes that have no impact on the economic wellbeing of middle and lower class families. Sideshow issues such as the “war on women”, “gay marriage” , “temporary piece of tape on a 30 year old immigration crisis and Mitt Romney’s dog come to mind (although this list is significantly longer).
Masterfully, the 99% vs. the 1% storyline has been extended to the current discussion over a very important issue: Taxes.
The previously negotiated tax increases or the end of tax reduction period is set to take place on “Taxmageddon”, January 1st, 2013. It will crush our already fragile economy and seriously impact lower and middle class families. There will roughly be 500 billion dollars in annual tax increases. The media has painted this situation as a Robin Hood scenario, whereby only the idle rich get soaked, but let’s look at the facts. What actually happens when the clock strikes midnight on January 1?
First, we have the expiration of what are called “the Bush” tax cuts. Then factor in Obama Care which is set to implement the first 5 of its 18 new taxes in 2013. Heritage Foundation’s Curtis Dubay reports that American households (the 99%) can expect to face an average tax increase of $3,800 and that 70 percent of Taxmageddon’s impact will fall directly on low-income and middle-income families, leaving their pocket books $346 billion lighter.
According to the American Enterprise Institute’s James Pethokoukis, tax increases from 1980-93 add up to 3.3% of GDP in thirteen years vs. 3.5% of the GDP just for just one year in 2013.
Federal Reserve Chairman, Ben Bernanke came out recently and spoke about the brazen amount of tax hikes that would kill the American economy saying; “under current law, on January 1st, 2013 there’s going to be a massive fiscal cliff of large spending cuts and tax increases.” Those are simply the facts. Here’s a glimpse at the increases that are scheduled to kick in for the five different tax brackets according to U.S News:
The 10 percent bracket rises to 15 percent (the highest % increase)
The 25 percent bracket rises to 28 percent
The 28 percent bracket rises to 31 percent
The 33 percent bracket rises to 36 percent
The 35 percent bracket rises to 39.6 percent*
(* rate at which 2/3 of small businesses profits are taxed)
So, while the Obama Administration paints this tax increase as something that only affects the 1% – notice that it affects the lower and middle wage earners significantly more, with a 50% rise in taxation in the lowest tax bracket. Distracting the public with class warfare rhetoric or other smoke and mirror tactics to achieve re-election is disingenuous, selfish and lacks leadership and integrity. What would really help lower level wages earners is to have more and better available JOBS and a thriving economy. Remember this, according to the Congressional Budget Office the U6 number (the unemployment figure which includes people who have supposedly STOPPED looking for work) tells us actual unemployment was 14.8% in May. Under President Obama we have seen the largest actual unemployment numbers since the U6 figure was established in 1990 and unemployment at levels similar to the Great Depression. The economy needs confidence and stability; we are in the midst of a crisis of economic confidence and instability.
Some simple things to restore confidence now are to extend the “Bush” Tax Cuts, put in place an actual budget (which Congress has put off for over 3 years), cut government regulations which are stifling small business and focus on creating pro-business, job creation environment. Take the government’s foot off the neck of small business and help get that that U6 number down and get America back to work!.
Keep your eyes on the ball and don’t let this Obama dazzle us with his sleight of hand tricks and remember the countdown is on for January 1st, 2013…. TAXAPALOOZA!!
George R. Jarkesy is a money manager and successful professional investor, respected financial and corporate advisor. George has founded, invested in and helped to build companies engaged in a broad range of industry sectors, including financial consulting, media, real estate investing, real estate management, employee leasing, light steel manufacturing, livestock management, technology, natural resources, healthcare and biotechnology. George is currently focused on Managing his and his partners many investments and he is a frequent market commentator and guest on FOX Business News, FOX & Friends and CNBC. He is also the host of the nationally syndicated “George Jarkesy” radio show.
George started his career in the financial services industry with a New York Stock Exchange member. Over the past two decades, Individually and through one of his companies, he has been a successful strategic investor in many entrepreneurial growth companies and has originated and/or participated in several hundred investments over the past 20 years, including both debt and equity in private, pre-public and public companies.
George also serves on the Finance Committee of the Republican National Committee, is an active member of the National Investment Banking Association, The Jarkesy Foundation, Chairman of The National Eagles and Angels Association, and hosts the George Jarkesy Radio Show.