Obama’s Middle Class Tax ‘Cut’ - Axelrod’s Big Lie
Providing fodder for the conservative blogosphere on Sunday, David Axelrod – Senior Obama advisor – expressed disbelief that people that were scheduled to receive a tax cut would be protesting against the Leader’s tax policy. The real reasons so many showed up to protest included taxes, but also spending. Like most who took Economics 101, Tea Party participants understand that taxation levied by the IRS is not the only form of taxation.
Liberals in government prefer to keep income tax rates the same in favor of increasing things like fees and licensing costs. When election time rolls around, these Democrats go to the voters claiming to be fiscal conservatives and point to a static income tax rate as proof. Journalists typically provide safe cover and never address the issue of other increased costs to taxpayers. Hiding tax increases is a necessary job skill for liberal politicians.
Unfortunately for Team Obama, many voters have figured out the game. When Axelrod claims that the middle classes will be receiving a tax cut, he neglects to inform them that they will be paying more for everything else. This is due to government caused inflation.
Inflation is the natural and inevitable result of overspending and over-borrowing by the federal government. Increasing the money supply to cover government debt – or increasing the number of dollars circulating in the economy – drives down the value of existing dollars. This in turn drives up the cost of all goods and services. Team Obama has already significantly increased the money supply. In 2010 when the Stimulus spending really begins, the money supply will have to be increased even more.
Inflation is the cruelest form of taxation as it impacts the middle and lower classes the most. Workers will pay more for all goods and services, but wage levels never keep pace. LBJ invented this method of taxation as a means to pay for the Vietnam War. Knowing the voters would never tolerate being taxed for the war in Southeast Asia; Johnson just increased the money supply and paid the government’s bills with newly created dollars. It took until the mid 1980s and Ronald Reagan to get the inflation beast under control.
So Obama and his media groupies will claim that there is a tax cut for the middle classes. He will rely on the ignorance of the masses to carry off the illusion that there is no tax increase. In fact, the Obama Tax Increase on the middle class will be very, very significant and should begin to accelerate early in 2010. We will see who Obama blames then.