Tax increases and other Democrat campaign strategies

If eighteen months ago someone asked you to write a political plan more likely to rile up the American people and throw them into the arms of the Republican Party, it’s hard to imagine anything that would be more successful than what the Democrats have done over the past year and a half.  Not to mention what they plan to do.

Between ObamaCare, the stimulus, civil rights for terrorists and suing Arizona for trying to control its illegal immigration problem, they have been pushing voters to the GOP with both hands.  But in just a few months comes the coup de grace: a massive tax increase – right in the middle of a recession.

Back at the beginning of the decade when Bush and the Republicans were pushing for tax cuts Democrats instinctively fought the idea, (it’s unnatural to them).  While they couldn’t stop the tax cuts entirely, they did have enough clout to insist upon a sunset provision, and as of right now those cuts will expire on December 31st.

So much for a Happy New Year.

Of course this will occur after the coming elections, (by design), but the increases are likely to have their greatest political impact in 2011 and 2012, which means that they will become an issue for Obama’s re-election campaign.

So, what taxes are going up?  It’s quite a list.

Of course, individual income tax rates will go up.  Ten percent goes to fifteen, (up by fifty percent!); twenty-five goes to twenty-eight; twenty-eight goes to thirty-one; thirty-three goes to thirty-six; and thirty-give percent goes up to almost forty.

The capital gains rate will go up from fifteen percent to twenty, and the tax on dividends will go from fifteen percent to a whopping thirty-nine percent.  Not exactly an incentive for saving and investing.

The “death tax” comes back with a vengeance, going from zero this year to a top rate of fifty-five percent on estates over one million dollars.  Nice homes, businesses or family farms would be at risk of having to be sold just to pay the tax on what was inherited.  Of course this is double taxation, considering the government already got their cut when the dearly departed was accumulating said assets, but liberals don’t mind if Uncle Sam double-dips.

The “marriage tax” will go back into effect, making it more advantageous to “shack up” and file separately, rather than get married and declare jointly.  And the child tax credit will get cut in half, (going from one thousand to five hundred dollars).

Small businesses take a hit too, as their ability to expense half of equipment purchases will disappear, forcing them to depreciate them slowly over time.  So much for encouraging small business expansion to boost the economy.

As you will recall, this is all courtesy of the same political party that pushed for seven thousand dollar tax credits for people who bought government approved cars last year, (a move which was at least partially about saving pseudo-government subsidized labor unions in Detroit).

And all of this doesn’t begin to take into account the changes that will come as a result of ObamaCare, as businesses will begin to cut insurance, individual insurance plans get phased out and more Americans find themselves dependent on government run health care.

So, why would Democrats do this to themselves?  Because the only thing they like better than your money is more of your money – and the bigger government that comes with it.  If left to themselves they would continue to raise rates in search of that mythical perfect percentage where the vast majority can put their feet up while a small minority (they think) will continue to toil away and pay for it all.

But the politics is catching up with them.

Though there are still three months to go in the 2010 campaign, one can fairly safely say that things don’t look good for Democrats.  And if they do lose as badly as current projections would suggest, they’re going to need a serious plan to get back in good graces with the public.  Unfortunately (for them) that plan involves defending massive tax increases, ballooning debt and increased government regulation.  All of which are opposed an overwhelming majority of the American public.

If they have achieved anything productive for the nation in the past year and a half, it has been to give the public a vivid reminder of the realities of liberalism, the result of which has been the growth of the Tea Party movement.  And keep in mind that the current incarnation of the Tea Party movement happened before any of those new tax increases will have begun to pick the pockets of individual Americans.  One can only imagine how much more these will fuel the fire of opposition.

Republicans need to be relentless in keeping this before the voters for the next two years.  The rest will take care of itself.

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Cross-posted at DrewMcKissick.com