The Shape of Tax to Come

A Tax & Estate Planning blog for 21st-century Texans

WSJ: The President’s Priorities

President Obama released his proposed budget yesterday, and it is laden with new taxes. The Wall Street Journal has an opinion piece concerning the increased spending levels. While President Obama proposed a spending freeze, this budget is anything but frugal. We are looking at nearly $2 trillion dollars in increased taxes.

We now know why the White House leaked word of a three-year spending freeze on a few domestic accounts before this extravaganza was released. No one would have noticed such a slushy promise amid this glacier of spending. The budget reveals that overall federal outlays will reach $3.72 trillion in fiscal 2010, and keep rising to $3.834 trillion in 2011.

As a share of the economy, outlays will reach a post-World War II record of 25.4% this year. This is a new modern spending landmark, up from 21% of GDP as recently as fiscal 2008, and far above the 40-year average of 20.7%. . . .

And here you thought the “stimulus” was supposed to be temporary. This is also before the baby boomers retire and send Medicare and Social Security accounts soaring.

If this budget is Mr. Obama’s first clear demonstration of his long-term governing priorities, then it’s hard not conclude that this spending boom is deliberate. It is an effort to put in place programs and spending commitments that will require vast new tax increases and give the political class a claim on far more private American wealth.

Despite talk of “tough choices” in yesterday’s document, the Administration wants $25 billion in new spending for states for Medicaid, $100 billion for yet another jobs “stimulus,” big boosts in spending for low-income family programs, for health research, heating assistance and education. If Mr. Obama’s priorities become law, federal outlays will have grown an astonishing 29% since 2008.

Tax Increases

You can read the complete piece here.

February 2, 2010 - Posted by | Uncategorized

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