I find it interesting that the creation of jobs doesn’t seemed to be a priority now that the election is over. You hardly hear about it because Obama has embraced other issues that keep the public’s attention away from his dismal failure to get the economy moving and creating jobs.
The stock market continues to climb giving the appearance of a performing economy. It is an illusion. Corporations are buying back their stock to enhance their profits. They are running lean enterprises that are producing the profits but the profits are not significantly being used to expand and grow business. This leaves the jobless rate at 7.8%.
In economics, the term opportunity cost refers to spending money either for item A or item B. Not both! So corporations that are buying back stock are using the profits to pay out dividends and attract more investors, not create jobs. With the new dividend tax, corporations realize that there will be a drop in investments. To maintain a profitable level, they are buying back the stock to plow profits back into the company to replace the investments they lose. They are also trying to be so profitable that they will attract new investors with higher dividends to overcome the impact of the higher taxes. Smart scheme but one in which jobs are not the priority.
At the same time, most people are not aware that there are 11 states with more people on welfare than employed according to government statistics. The states are California (not a surprise), Hawaii, New Mexico, Illinois, Mississippi, Alabama, South Carolina, Ohio, New York and Maine.
The growing welfare and disability rolls are a danger sign for the middle class. Obama has proclaimed we don’t have a spending problem but a tax problem. As he says, “The rich must pay their fair share.” Contradicting his statement is the non-partisan Congressional Budget Office. They have repeatedly pointed out that the higher taxes on the rich will not cover the revenue needed to decrease the deficit and pay down our national debt.
In the future, higher taxes must be imposed on the middle class. Not only do we have the debt and deficit problem but the Congressional Budget Office has also issued reports that ObamaCare will increase both the debt and deficit because ObamaCare will not pay for itself. None of the entitlements passed by the Washington politicians has ever paid for themselves.
Now common sense tells you that if there are less employed people and more welfare recipients, there will be a decrease in revenues for paying the nation’s bills. The tax burden must fall on the middle class. Already the middle class has a 2% increase in Social Security and a .9% ObamaCare surcharge being taken out of take home pay despite Obama’s claim of no taxes on the middle class.
Any middle class person who thinks he/she will escape paying more taxes because he/she earns less than $250,000 is in denial or ignorant. Unfortunately, it will be too late for anybody to do anything about it.