Tax Hikes you can't blame on Obama

The economy is in deep decline and more and more Americans are scrimping and saving in an attempt to make ends meet. Foreclosures are running high, unemployment is at record levels and there simply isn't enough money to go around.

So what's the government doing about it?

Well, the federal government's already discussing doubling tax on fuel.

Last year, gas prices more than doubled, crippling most lower-income families budgets and contributing to the sudden spike in home foreclosures. As a result of the whopping gas prices, Americans simply stopped driving as much. Americans drove billions of fewer miles and demand for overpriced gas sunk as people simply stopped using their cars.

Which led to a problem. Congress, who stick almost 20c on the price of a gallon of gas, suddenly saw a decline in their tax revenue, brought about by the decline in gas sales. So what do they suggest? Doubling the tax rate (and raising the price of gas across the country.)

Likewise, many local governments are seeing similar declines in their tax revenue due to the recession, so across the board, many of them are thinking of making steep increases to their (already astronomical) property taxes.

It makes no sense at all.

Americans have less money to spend, so the government taxes them more?

The lack of consumer spending is plunging the economy into decline, so the government pinches the pockets of taxpayers even more?

Barack Obama has identified that the only way to get America out of it's current economic crisis is by issuing tax-cuts to get more spending going. However, the $500 a year he is trying to give back to the average working American (through cutting payroll takes by about $80 a month) is instantly cancelled out by different branches of federal and local government increasing the tax burden on these same Americans.

I find it ironic that Americans are being forced to dig deep and make radical changes to their spending habits and lifestyles, just to make ends meet. Instead of doing the same, the sneaky fringes of federal and local government somehow sees the answer to be increasing the pressure on working Americans.

Republicans claimed that Barack Obama was going to raise taxes. This just proves them wrong. The issue isn't with the president (who is advocating major tax cuts) but with the engine of government itself. Whether it's congress or the local township, their governments are bloated, self-serving and corrupt. Both Democrats and Republicans are equally guilty of frittering away taxpayer's money.

Our president might represent 'Change You Can Believe In,' but it appears the American Government, in all its forms, still doesn't.

Fingers out of my 401k, Obama!

We all hate the oil companies.

Is used to cost $20 to fill the 14 gallon tank of my old Firebird. Now, barely five years later, it's pushing $50 to fill the same-sized tank of my new one. Petrol, pushing $4 a gallon, has never been higher and it's not looking like it's going to come down any time soon.

Yet, simultaneously ExxonMobil, the world's largest privately owned oil company, has reported whopping profits of $40 BILLION. High prices? High profits? Surely the two are connected...

Barack Obama certainly thinks so - and he's promising to hit the likes of ExxonMobil with huge 'windfall profit taxes' to redistribute that disgusting profit to the like of the little guy (like me?)

The problem with this plan?

That wealth was already being redistributed to the little guy like me - plus millions of other working and middle class Americans. 98.5% of ExxonMobil stock is owned by institutional investors - much of that on behalf of regular Americans in the form of mutual funds, 401ks and retirement accounts.

I have a 401k - and ExxonMobil's profits help my monthly investment grow - so when I finally retire, I've got enough to live off (because the government has bankrupted Social Security.) So what's the point of investing my hard-earned money if Barack Obama's just going to pluck out the potential profits and give them to somebody else?

It's not just mine, either. It's millions of Americans. In many cases, the same Americans who ignorantly support Obama's cries to tax the oil companies. It's not ExxonMobil who are donating this money for Obama to redistribute - it's regular folks like you and me!

I think people are just too ignorant of the big picture... They don't realise that their relationship to 'big oil' goes beyond their twice weekly fill up (or twice daily if you drive a Hummer.)

Obama - if you want my support, get your grubby mitts [Is that politically correct? Editorial Bear] out of my 401k!

NOTE: As of today, the Republicans decided to do something useful for a change and blocked this proposal before it went anywhere. Nice to see somebody awake in the Senate!

The Election Aftermath

Well, the voters of New Jersey have spoken.

On Election Day 2007 - which I covered here - the people of Middlesex County voted in resounding support of their incumbent mayors, with only South River's Robert Szegeti getting booted off in favour of Republican challenger Raymond Eppinger.

And while this leaves South River with a 'one party' local government (the mayor and five council members are now Republican) the rest of New Jersey remained grudgingly loyal to the Democrats - although how they approached the four 'voters questions' revealed that they want their democratic representatives to rein in the spending and stay fiscally conservative.

North Brunswick's mayor, Francis 'Mac' Womack III was welcomed back for another term - and good for him. He's done our township proud.

Aside from choosing our representatives, however, voters of New Jersey were asked to vote on four specific 'questions' that effected our great state.

The first was:

1: Should New Jersey permanently dedicate a percentage of revenue earned from sales tax towards property tax relief?

New Jersey said no.

Which was the right decision, no doubts about it. While New Jersey has some of the highest property tax in the whole of the United States, it seems entirely illogical to take money out of one tax pool to alleviate the sting of the other. If New Jersey has such an enormous surplus in their sales tax revenue, perhaps they ought to lower the tax rate?

Or, alternatively, they should use that revenue stream to pay for whatever it is that keeps the property taxes so high?

Although it is more complicated than that. Sales tax is raised on a state level, while property taxes are raised by the townships where people live. It's easy to forget that government in America is a multi-tiered structure and the different tiers have responsibility paying for different things.

But accepting that makes the proposed property tax relief even more illogical. If property taxes pay for schooling, rubbish collection and local police and fire services - things only a particular township benefit from - why should the entire state of New Jersey bail out particular townships via the sales tax?

Because rerouting sales tax revenue to offer property tax relief essentially leaves everybody in New Jersey - renters and property owners alike - bailing out the home owners. Which simply isn't fair.

2: Should New Jersey approve borrowing $450 million for stem cell research?

Again, the answer was a resounding no.

On the surface, I think that's a very good thing. Borrowing such an astonishing amount of money to pump into an uncertain science doesn't make good financial sense. The people of New Jersey pay their taxes to receive the benefit of public services - not to invest in ill-considered business adventures.

My suspicion is, however, that many people voted 'no' simply because of the scary concept of stem cell research. There has been a pretty good disinformation campaign about this fledgling science that has people scared of human cloning and other people worried about the thought of human embryos being used in research.

To reject this proposal because it made poor financial sense is a good thing. To reject it because of ignorance and fear is bad. Stem cell research can be conducted ethically and might offer the chance to repair nerve damage and diseases that are currently untreatable.

It could herald a new era in science and medicine. We shouldn't reject it simply because we want to remain in the blissfully ignorant dark ages.

3: Should New Jersey approve borrowing $200 million for open space preservation?

New Jersey voted yes.

Which is a great victory. A victory because the borrowed $200 million can be invested in keeping the 'Garden State' living up to it's name. Forests, grassland, farmland and plains can be preserved and protected from aggressive redevelopment, meaning a new generation of New Jersey children will grow up being able to enjoy the beautiful countryside.

In America, there are currently 1 million unsold new homes, suggesting that the drive to build, build and build is not a wise one. There are strip-malls and shopping centres enough in New Jersey. While I'm all for supporting free enterprise and market forces, I think New Jersey needs a hundred acres of woodland far more than it needs another K-Mart.

By voting 'yes,' the people of New Jersey created a market force of their own - and proved that preserving the countryside was something they were willing to invest their tax dollars in.

4: Should we revise language outlining when voting rights can be denied by deleting from the state Constitution the phrase "idiot or insane person" and replacing it with the phrase "person who has been adjudicated by a court of competent jurisdiction to lack the capacity to understand the act of voting."

This was another resounding yes - and requires very little explanation.

The Next Step

Back when I was studying politics at Plymouth College of Further Education, we were taught that local elections can mean a lot of different things. Sometimes they can even predict the direction national politics will take.

If that's the case, I think New Jersey has spoken.

Support for the Democrats seems strong, suggesting that NJ will lean towards a Democratic candidate in 2008's presidential elections. However, this support is tempered by a growing demand for fiscal responsibility - and any hopeful candidates should accept and embrace that.

I think this might well prove to be a national trend. With America balanced on the knife-edge of recession, the important election issues are a lot closer to home than people suspect. Jobs. Taxes. Inflation. The Economy.

My father figures the 2008 elections will follow the 1992 ones, with the major campaign issue being 'the economy, stupid.'

It was that mantra, hung outside Bill Clinton's campaign headquarters in Little Rock, Arkansas, that helped lure voters away from the seemingly unbeatable President Bush Snr.

Bush Snr. had seen the end of the cold war and the successful Desert Storm through - but left America in the depths of a recession. James Carville, the campaign strategist for Bill Clinton, coined the phrase 'it's the economy, stupid' to make Americans consider domestic financial issues as well as foreign policy ones.

It was enough to topple Bush Snr, whose approval ratings had been at 80% just the year before.

Now history threatens to repeat itself! With a Bush in the White House and a Clinton standing at the gates. Except this time, the departing Bush Jnr has an approval rating barely half that of his father.

If the local elections in New Jersey have taught us anything, it's that the winning presidential candidate will need to have some sensible spending ideas that will send the American economy trundling out of the doldrums.