An open letter to President Obama (Part 64)

Sen. Paul Delivers State of the Union Response – Jan. 24, 2012

Uploaded by on Jan 24, 2012

Sen. Rand Paul delivered the following Republican response to President Barack Obama’s State of the Union Address this evening.

_________________

President Obama c/o The White House
1600 Pennsylvania Avenue NW
Washington, DC 20500

Dear Mr. President,

I know that you receive 20,000 letters a day and that you actually read 10 of them every day. I really do respect you for trying to get a pulse on what is going on out here. Here is an excellent piece from the Heritage Foundation with a reaction to the president’s proposed budget:

Obama’s Budget: A Barrage of Economy-Slowing Tax Hikes – Curtis Dubay To no one’s surprise, President Obama’s budget contains a multitude of tax increases. In total they add up to $1.8 trillion in new levies over 10 years. This is a net total after subtracting for the roughly $88 billion in new tax cuts the President proposes. Many of the tax increases are recycled policies from previous budgets that Congress has repeatedly rejected. The small amount of tax cuts the President offers are mostly incentives for engaging in behaviors (including “green activities”) that the President favors. These are the type of economy-distorting tax policies that tax reform would wipe out, the exception being auto-enrollment in IRA plans. The average revenue collected by the federal government since World War II is around 18 percent of GDP. President Obama’s budget would blow past this upper bound on what Americans will tolerate their government taking from them. Under his budget, revenues would surpass the average revenue mark in 2014. By the end of the 10-year window, revenue would be 20.1 percent of GDP—well above the historical marker and almost equal to the all-time high revenue number set in 2000. Included in the President’s tax hikes are his old favorites, such as raising tax rates on families making more than $250,000 a year back to their level prior to the 2001 and 2003 Bush tax cuts. President Obama would also curtail their deductions and personal exemptions, hike the capital gains tax to 20 percent (23.8 percent when including the new Obamacare surtax), and raise the death tax. Tax hikes on oil and coal companies are back again, as are higher taxes on U.S. multinational companies, which would only increase these businesses’ incentives to locate jobs in more competitive countries. More in-depth analysis of these tax hikes can be found here. The biggest new tax is President Obama’s proposal to tax dividends at the same rate as regular income: 43.4 percent after accounting for the top income tax rate rising to 39.6 percent and the 3.8 percent Obamacare surcharge. Of course, the dividends tax is a double tax, since the corporate income that dividends come from are already taxed 35 percent at the business level. The effective rate on dividends would stand at more than 63 percent if President Obama’s misguided policy became law. This would significantly curtail investment and slow economic growth. The President’s much-touted Buffett tax is not a fleshed out policy in the budget but is paid lip service in a half-hearted outline for tax reform. The President envisions his misguided rule as replacing the Alternative Minimum Tax as part of a broader redo of the tax code. Another policy the President hints at in his tax reform outline is eliminating deductions for families earning more than $1 million a year. Such a policy would eliminate their deductions for mortgage interest, saving for retirement, and health care expenses. The still frail economy cannot withstand the barrage of tax hikes the President calls for. Nor would it benefit from his vision of tax reform. Tax reform first and foremost is revenue neutral. The President’s outline calls for it to raise another $1.5 trillion for the government to spend. Congress should disregard the President’s tax proposals, as it wisely has in previous years, and focus on true tax reform like the plan laid out in The Heritage Foundation’s New Flat Tax.

 ___________________________________

I am glad that JFK and Ronald Reagan saw the wisdom of cutting taxes and these moves by them resulted in two of the biggest times of economic expansion by the US economy. However, this budget proposal for 2012 tries to take us back to some of the highest tax rates we have seen in over 30 years. Why would we want to go back to those levels again?

Thank you so much for your time. I know how valuable it is. I also appreciate the fine family that you have and your committment as a father and a husband.

Sincerely,

Everette Hatcher III, 13900 Cottontail Lane, Alexander, AR 72002, ph 501-920-5733, lowcostsqueegees@yahoo.com

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