Update on Obama budget proposal

Two things-

1) This article from ABC News notes something that I noted in my previous post; that people are going to try to reduce their income to under $250,000 by reducing their productivity. As a dentist from Boulder, Colorado put it- "The motivation for a lot of people like me – dentists, entrepreneurs, lawyers – is that the more you work the more money you make. But if I'm going to be working just to give it back to the government -- it's de-motivating and demoralizing." Remember, Obama's plan to cut the deficit is to increase taxes on those who make above $250,000 a year, or the "rich" people in Obama's lexicon, coupled with an absurd projection of 4%+ growth over the next two years. When the economy doesn't recover in two years, plus the damage that will be wrought on the economy from the stimulus bill, there will be only one way for Obama to meet his goal of reducing the deficit- dropping the floor on the tax increases. That means he will have to raise taxes on more than just the top 2%.

2) One way that people try to reduce their taxable income is by giving to charity, especially those who make more than $250,000. One aspect of the Obama budget is that he proposes to begin limiting the ability of people to deduct charitable donations on their taxes. The purpose of this is to reduce the amount of charitable donations from individuals so that the government will have a bigger pile of money to tax from to use it to pay for the Administration's goal of a government-run health care system. So, let me get this straight- we are in a recession, which means charitable giving is already down, the Administration proposes tax increases on those who make more than $250,000 a year, and who often give more to charity, and the Administration is proposing to limit the amount of money that people who make more than $250,000 a year can give to charities which would raise nearly $180 billion over the next 10 years (even though it wouldn't take effect until 2011). How does this help charities already struggling? It doesn't- it just makes the govenment a charitable organization.

Of course, this is just one of many terrible proposals by this Administration in the budget. Charities are important institutions in the United States, and this proposal by the Administration to cut off important individual donations simply so the government can take a larger slice of it is wrought with peril. What is clear in this proposal is that the Administration 1) could care less about the good work that charities do across this country (especially religious-based charities), and 2) whatever good work those charities do, the government should do instead. As OMB Director Peter Orszag noted, the government will make up the difference in giving. Why should the government be reimbursing charities for money it took away? How does that make any sense? Other than increasing the number of people and groups that will becoming increasingly reliant on the government. I don't seem to think that that is a good thing.

Anyway. . .I suppose this is my own little page where I can rant and rave all I want. Not that it does much good, which I can live with. Yes, I'd much rather write about bunnies and flowers, but I do need an outlet for my thoughts on this mess. And it is a mess.....I can't say that I have any confidence in this administration at this time. His economic proposals are a recipe for disaster- increasing taxes to pay for more government spending at a time when we are in a recession. And that's without mentioning the stimulus bill which will do almost nothing of the sort in the time-frame it's expected; instead, all it will do is take money from future growth and use it to pay down the deficit created by this incredible mis-use of government spending.

I'm borrowing this chart from Instapundit which shows how the market has responded since the passage of the stimulus bill:



That doesn't look good. At least baseball season is approaching, and I look forward to this summer when I get to take my newborn little girl to a day game.