Obama's Quasi-Tax Increases

When most people think about taxes, the first thing that comes to mind are federal and state taxes.  Some will remember sales taxes, Social Security taxes, and Medicare taxes. 

What unites all of these taxes are that they are burdens placed by government on the citizens of America.  When we talk about the full tax burden Americans endure, it behooves us to count all of the ways in which the government forces us to spend our money.

To understand the full tax burden of Americans, we need to look at all the government does that directly financially impacts each American.  For example, since 9/11, every time you fly, you have to allocate an extra hour or more to deal with security.  That hour you lose is a burden imposed by the government that does not show up on your regular tax bill, but since time is money, that hour does impact your life.

Any sort of government imposed non-tax financial burden can be called a quasi-tax in that it takes money out of the pockets of Americans, but it is not levied in the manner normal taxes are, and the money does not necessarily go directly to the government.

These quasi-taxes can have a huge impact on both the economy and the financial well-being of every American.  Additionally they can be extremely regressive and disproportionately target those Americans with the least money.

Obama has imposed a number of highly regressive quasi-taxes on Americans since he assumed office in 2009.

The price of gas has doubled under Obama.  While that entire price change is not Obama's fault, his support for dramatic reductions in new drilling permits on federal lands and his inept foreign policy in the Middle East have contributed to reducing the oil supply and hence increasing the price of gasoline.

Contrary to liberal thinking, when there is less of something, its price increases, and when there is more of something, its price goes down.  We see this working in the case of corn.  Corn, like oil, is a commodity whose price is determined on world markets.  Environmentalists' desire for ethanol has caused large amounts of corn to be diverted from feeding people, and as a result, the world price for corn has increased.  Liberals wishing the law of supply and demand doesn't exist does not make it so.

Obama's policies designed to make oil less plentiful -- in pursuit of Obama's desire for a "greener" economy -- drive up the price of gasoline and constitute a quasi-tax which increases the cost of gasoline.

Similarly, his maintaining very strict environmental policies -- many of which he inherited -- has made it difficult if not impossible to build new refineries, which also tends to drive gasoline costs up.

If one doubts that Obama is trying to raise the price of gas one only needs to listen to Obama's Secretary of Energy Stephan Chu who, in 2008, said, "Somehow we have to figure out how to boost the price of gasoline to the levels in Europe."

Note that back in 2008, Europeans were paying $8/gallon for gasoline.

Similarly in 2008, Obama himself expressed concern with high gas prices, but only in that they had come about too quickly -- not that they were in fact very high -- when he said, "I think that I would have preferred a gradual adjustment."

Increasing the price of gasoline is effectively a highly regressive quasi-tax that disproportionately impacts the poor and lower-middle class, who can't afford new highly fuel-efficient cars or to pay high housing costs to live close to work.  Given that 80% of families making less than $50K/year have a car and spent about $1,500 on gasoline when gas was $2.80/gallon, the increase to $3.80/gallon is effectively a 1% flat tax increase on those making $50K/year and a 2% flat tax increase on those making $25K/year.

In addition, higher gasoline costs drive up the costs of pretty much everything Americans buy that is not locally produced due to the increase in shipping costs.  In this context, increases in the cost of gasoline translate into a sales quasi-tax, and it is well established that sales taxes are highly regressive.

President Obama has also been waging a war on other energy sources.  He is working hard to essentially end the use of coal for generating electricity in America by establishing overly restrictive environmental quality requirements on coal-fired power plants.  In 2015, when the regulations come into effect, the price in power is projected to increase by a factor of 8 or more in areas that currently use coal-fired plants.

Since the poor need to stay warm in winter and have lights at night, they will obviously be disproportionately impacted by soaring energy prices.  Unlike the well-to-do, who will be able to absorb the higher energy costs without sacrificing essentials, the poor will be hard-pressed to maintain a minimal standard of living.  Increases in general energy costs will drive up the cost of all the things necessary for life, such as food and shelter, making energy cost increases a regressive sales quasi-tax. 

Another Obama quasi-tax on the middle class is through the seemingly unending stream of regulations emanating from Obama's bureaucracy.

While the specific financial impact of Obama's new rules is hard to quantify, Representative Joe Heck from Nevada cites a study showing that in 2011, Obama created an additional $231.4 billion in regulatory burdens.  During 2011, Obama added 82,000 pages of new regulations; can you imagine how much just keeping track of that costs small businesses in America, not to mention how many more government jobs are necessary to enforce that many new rules?  To put the $231B in perspective, the total regulatory burden on businesses according to the Small Business Administration is $1.75 trillion.  That means in just one year, Obama increased the quasi-taxes on businesses by 13%.  And Obama wonders why the recovery is slow.

The money spent on complying with federal regulations is money companies can't use to expand their businesses and create new jobs.  Just cutting that $231B in new regulation in 2011 would leave companies with enough money to hire another 4.6 million employee's at $50K/year -- almost as many new jobs as Obama claims to have created in nearly four years.

But there is an additional concern generated by Obama's plethora of quasi-taxes: the uncertainty that businesses have to face.

Financially overextended companies risk going out of business and economically devastating their owners, stockholders, and the communities they are in.  This is an especially significant concern in the Obama economy, where the next recession keeps appearing to be coming sooner rather than later.

When businesses are uncertain of what new costs they may face, they tend to hunker down, build up cash reserves to tide them over tough spots, and avoid making commitments that might dramatically grow in cost, such as hiring new employees.

The uncertainty about just what ObamaCare will cost per worker has kept companies, especially small businesses, from hiring or investing.  Similar concern is raised by Obama's other quasi-taxes, such as increasing energy costs and government regulation.

In an America where the president seems eager to increase the size of government and the quasi-, and visible, tax burden on American businesses, it's not surprising that small businesses are making sure they can afford whatever is tossed at them in the future.

Because these quasi-taxes are the result of bureaucratic mandates and government policy, not votes in Congress, they are easy for Obama to create.

America was founded, to a large extent, because Americans did not want to be taxed without representation.  When Obama uses the Executive Branch to create hidden taxes without public debate, Americans are effectively taxed in secret, which treads very closely to taxation without representation.

It's important to get the word out about how enthusiastic Obama is about raising taxes on all Americans, not just the 1%, and about how successful Obama has been in increasing taxes -- especially on the poor.

Next time you hear someone declare that Obama hasn't raised taxes on the middle class and the poor, you might want to mention the massively regressive impact of Obama's many quasi-taxes.  How his gasoline quasi-tax is effectively a 1% flat tax on the poor.  How his massive increase of quasi-taxes on businesses tie up the money that could be used to employee millions of workers.  And how Obama's quasi-taxes on energy hit the poor the hardest.

You can read more of Tom's rants at http://obvioustalk.blogspot.com.

If you experience technical problems, please write to helpdesk@americanthinker.com