This is going to hit everyone, as we'll see the current six tax brackets go from 10%, 15%, 25%, 28%, 33%, and 35% increase to 15%, 28%, 31%, 36% and 39.6%.
If that wasn't enough bad news, we are also going to see the tax on long term capital gains rise from 15% to 20%, as well as a jump in taxes on dividends from 15% to as high as 39.6%.
But does it really make sense to raise taxes in the middle of a crippling recession?
Do we really believe that the government will make better use of those funds than we can? Because that's the bet you are taking if you say you support letting the Bush tax cuts expire.
Another alternative proposed by the Dems is to keep the tax cuts in place for the middle class and only allow taxes to increase on those tax payers in the two highest tax brackets. The logic used to support this discriminatory policy is that the rich aren't big spenders, and giving them a tax break won't deliver enough "bang for the buck."
So let me set this straight: Rich people are being punished for adhering to the most fundamental principle that all wealth creation is built on, and that is "live beneath your means." You can't get rich if you spend more than what you earn, but apparently that fact is lost on the Democrats.
Make no mistake -- what the Obama administration is pursuing is a strategy of government mandated redistribution of wealth from the rich to the poor.
And you know what?
It is a dumb idea.
It is also incredibly unfair, but no one said life was fair, so let's discount that aspect of this policy for a moment.
Mr. Obama seems to believe that the way to save America is to steal money from very productive Americans and give it to less productive Americans. Once again, this is pretty dumb from a common sense point of view, but it does buy a hell of a lot of votes. So viewed in that light, maybe his policy choices are in fact brilliant.
If I may be so blunt, the proliferation of these socialist policies can only further our devolvement from a once tough no nonsense financial powerhouse into a nation of soft bellied wimps. I left the United Kingdom to escape the mediocrity and the tyranny of socialism. The only thing I was promised when I came to this country at the age of 16 with $150 in my pocket was opportunity -- that's it, nothing else.
America is still a land of limitless opportunity, and a place where you can still remain true to your moral values while becoming rich. Choosing to forsake your values in the pursuit of wealth is just that -- a choice, it is not a prerequisite to the attainment of financial wealth.
The truth is that many, many people have allowed their greed to cloud their judgment. In the process, they have given capitalism and the pursuit of wealth a black eye. And I know that is one of the many reasons why it is now fashionable to look down upon the rich. Those who have broken the law and compromised all values of decency should be punished, and their wealth should be stripped from them. You'll get no argument from me on that front.
But that only applies to a small portion of America's wealthy class. It is a blessing to be wealthy, not a curse. I know many multi-millionaires who didn't feel that it was necessary to cook the books or rip people off to build their wealth. Wealth doesn't just abstractly materialize in one's life; it has to be striven for with a singleness of purpose. It requires sacrifice, focus, and vision, and these qualities should be rewarded rather than attacked.
The Obama tax policy is an attack on these values -- the very values that built this country.
Hard work, saving and investing. That's what built America, and that's what will re-build America.
The government can't create wealth, they only know how to steal it. It takes the men and women who have the drive, the determination and the guts to become wealthy -- those folks in the top two tax brackets -- to create the jobs that fuel this economy.
How can it make any sense to punish these people?
Chief Investment Officer
ETF Master Trader