In Obama's speech today, he laid out a big long wish list, ostensibly some tax cuts for business -- $100 billion here, $50 billion there. Pretty soon, as Ev Dirksen famously said, it'll add up to real money. But the real tragedy here - something very few reporters have bothered to ask - is how we will pay for all this?
As it turns out, Obama plans to raise taxes on business by an equal amount to cover his large if ineffective political promises. Somehow that has made less news than his big splashy tax "cuts." As we noted below, his favorite ploy is "raising taxes on oil and gas companies," a swell idea for the most gullible among us. Does anyone believe that he'll actually squeeze a few hundred billion in tax revenue out of the oil companies? And if he does, how much do you figure it'll cost to fill up your tank....?
His other favorite political ploy is the elimination of a thing called "deferral.' This fairly technical tax vehicle is described by the Business Roundtable as such:
"In order to maintain the ability of worldwide American companies to compete against their foreign-based competition and in conformance with tax policies of our trading partners, the U.S. government defers collecting taxes on earnings of the foreign subsidiaries of worldwide American companies until those earnings are actually paid to the U.S. parent... All member countries in the Organization for Economic Cooperation and Development (OECD) and other developed nations that tax the worldwide earnings of their globally operating corporations permit some form of deferral." (Emphasis ours)
So ending deferral will put US companies at a global disadvantage. Great, just what we need.
And last but not least, he plans a huge tax increase on small business, that will neither stimulate the economy nor create jobs.
So as you read about these "tax cuts" from now 'til the day of reckoning on Election Day, just ask, "How do we pay for this?" You'll find that the Administration is not robbing Peter to pay Paul, they're robbing Peter to pay Peter.
The Silly Season has begun.