The Big Paradox of Obamanomics

With the AIG bonus “scandal” as an opening, Obama and the Democrats are now moving to place restriction on the amount of compensation executives can receive. The first step is to target the large TARP recipients. Now Obama is floating the idea of extending it to all financial corporations and even perhaps to all of the publicly traded corporations. The details are sketchy at the moment but the idea is to reduce the compensation of these executives one way or another.
This exposes one of the major contradictions in the Obama/Democrat ideology. One the one hand they propose tax increases on family incomes over $250,000 per year in order to finance their universal healthcare program and other massive increases in government spending. On the other they want to reduce the taxable compensation earned by those over the $250,000 level. The leaves us in a quandary as to how they propose to finance this increased government spending.
Put another way, one can understand a politicians plan to raise revenue by taxing the “rich” but with trillion dollar increases in spending you need a lot of rich to tax. This goes against the whole principle that led to the Clinton surpluses. The rich made a lot of money during the internet/software bubble which was then taxed. If you reduce the salaries and bonuses of the executive class, you are reducing the tax base from which to raise revenue.
So as the Democrat candidate for senate from Minnesota once put it in his former role as SNL comedian, “What does this mean to me “Al Franken?” What means is that the don’t tax the middle class promise is soon to go by the wayside. There will need to be significant taxes on the middle class (as defined by Obama, i.e. those below $250,000) to pay for all this or the government will join the big banks in bankruptcy. Many of these taxes will be hidden in the form of the “Cap and Trade” program to reduce CO2 emissions. You will see them as your utility bills increase as well as in the cost of manufactured products and gasoline.
So be happy with your $500 per year tax cut. You will pay dearly for it in so many ways!