Obama & Team: Thwarting Growth
I began my radio program this past weekend by remembering conservative activist Andrew Breitbart, who passed away suddenly at the age of 43 last week. Andrew did important work for the conservative cause. Among many other accomplishments, he was responsible for breaking both the ACORN scandals and the "Weinergate" scandal involving former Democratic Congressman Anthony Weiner. Andrew leaves behind a young wife and four children. Click here to listen.
I also talked about the recent Tax Foundation analysis which found that Pennsylvania’s bloated business tax structure has created the worst climate for businesses in the country. That’s right, with incredibly high business taxes, Pennsylvania scores dead last (50th) when it comes to encouraging businesses to locate, remain and grow in our state. And, as a result, our job growth has been sluggish for decades, leading many people to leave. Thankfully, our new Republican Governor, Tom Corbett, along with the new Republican majorities in the state legislature, have actually cut state government spending over the past year. But now it is time to cut further and lower tax rates, especially on our overburdened businesses.
I also spoke with Pete Sepp, Executive Vice President of the National Tax Payers Union, about some of President Obama’s upcoming tax rate increases. While the President talks about simplifying and lowering business tax burdens, the reality is his new business tax proposals would dramatically increase the complexity of the tax code and raise effective tax rates on businesses. Among other ideas, the President makes a big deal out of calling for an end to tax breaks for oil and gas companies. Criticizing oil and gas companies may be good populist, left-wing politics, but in the real world these tax incentives for exploration and drilling are important – especially for smaller exploration and production companies – while also being tiny compared to the massive amount of taxes that oil and gas companies already pay to the government. But, the absurdity grows when the President calls on Congress to increase subsidies for alternative energy companies. These are the kinds of failed "green energy" subsidies that have already wasted billions of tax-payer dollars. Of course, no informed person could really call ethanol, wind or solar power "green" when they consider the negative environmental impacts and practical difficulties involved with all of these "neo holy" sources of energy. So President Obama’s new proposed business tax policy is just another example of him wanting to raise tax rates and increase complexity regardless of the consequences. I really wish that Barack Hussein Obama had had a job in business before becoming President. Heck, I wish that at least one of his life-time mentors (like the American communist, Frank Marshal Davis) had had a job in business. Just look at 20th Century history – public policy based on ignorance, fantasy, and / or left-wing ideology will always lead to enormous unintended negative consequences.
Of course, if enacted, the President’s new business tax proposals would be on top of current tax law which President Obama has signed into effect. Under Obama’s current tax policies, the Bush era tax rates on income, dividends, and capital gains will expire on December 31, 2012. This means that top marginal income tax rates will rise to 40%, dividend rates will rise to 40%, and capital gains rates will rise to 20%. And on top of all of these base rates, we will pay the new Obama 3.8% surtax that is embedded in the President’s new healthcare law.
According to Pete Sepp, it would be catastrophic for our economy if Obama’s tax rate increases go into effect as scheduled by law on January 1, 2013. Sepp predicted that if enacted, the higher Obama tax rates will cause economic growth to sag. In addition, people and businesses will cut back on or delay work and investment. The result of slower growth and legal tax avoidance will be that tax revenues to the government will decrease dramatically. This is exactly what happened recently in Great Britain when top marginal income tax rates were raised by ten percentage points. The tax rates went up, but tax revenues to the government went down. Clearly, a vote for Obama and his Democrat Party team mates is a vote for higher tax rates, slower economic growth, lower tax revenues for government, burgeoning annual budget deficits, and a soaring national debt. What rational person wants this? Provided the Republicans nominate a decent candidate, what rational person could vote for Obama in the next election?
Let’s send Obama home!! – To Hawaii? Indonesia? Kenya? (I would prefer that he live somewhere outside the United States, but I am indifferent between Indonesia and Kenya. Let him go "enjoy" either one!)
I also talked with Matt Pitzarella of Range Resources about the new Pennsylvania natural gas drilling regulations and tax recently signed into law by Governor Tom Corbett (Republican). Matt said that this bill obviously increases the cost of natural gas extraction on an industry that is already heavily taxed in Pennsylvania (just like every other business in PA). A new tax is the bad news, but the good news is that this bill also provides some much needed consistency of regulations across all towns, municipalities, and counties in the Commonwealth. In more good news, because of all the new natural gas production from the Marcellus Shale and other deep source-rock formations, each Pennsylvania household is now saving an average of $500 per year due to lower residential electricity and natural gas costs. Matt also talked about the recent find of large quantities of natural gas condensate in Western Pennsylvania. The bottom line is that private industry, using new technologies developed in the private sector, and drilling on private lands is transforming the energy equation for the United States. At the same exact time, President Obama and his Democrat Party team have caused production on public lands to decline by over 30% in just three years. Obama and the Democrats are doing everything they can to thwart exploration for and production of gas and oil in the United States, but they just cannot hold back the hard working, ambitious and financially driven American private sector. And thank God for that.
President Obama is now famous for trying to divide us along income, race, class and other lines. But, a successful, growing America is good for all Americans and the world. Through both their words and deeds, President Obama and his left-wing team members have demonstrated that they do not want a growing, successful America. No, they have demonstrated that they want to hold America – hold all of us – down. In a few short months it will be time to throw off this tyranny, and with every passing day my confidence is growing that we will do just that!
Have a great week!
Glen Meakem is a successful technology entrepreneur, venture capitalist, and conservative talk radio show host, who offers information and insights on how individuals and our nation can be more successful. Glen’s unique perspective has been shaped by his experiences as founder, chairman and CEO of the B2B internet success Freemarkets Inc – which he founded in 1995, took public in 1999, and sold to Ariba in 2004. In 2005, Glen co-founded Meakem Becker Venture Capital, a firm that invests in early stage start up companies. Concerned about the liberal political agenda that has gripped the United States and his home state of Pennsylvania, Glen launched "Glen Meakem on the Weekend" in 2008. Glen served as an officer in the United States Army Reserve and is a veteran of the First Gulf War. He also earned his undergraduate degree from Harvard and his MBA from Harvard Business School. For more information about Glen and his radio program, or to read his blog, please visit http://glenmeakem.com.
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