President Obama's announcement this morning to raise taxes on banks and financial institutions, under the guise of repaying TARP money (already repayed by many banks) is a blatant attempt to further class warfare. However, this tactic is indicative of reality arriving at 1600 Pennsylvania Avenue.

That reality is the high unemployment and stagnant economic growth will continue for the foreseeable future. Those factors will cause the annual deficits for the upcoming years to be overwhelming as the tax revenue to the U.S. Treasury will be much less than projected.
The conundrum the Obama Administration finds itself is: how do we increase revenue and continue our profligate spending ways?

President Obama and his fellow travelers in Congress will now embark on searching under every rock in an attempt to find more income for the Federal Government.

The initial target will be business. However, those costs will be passed on to the beleaguered consumer who in turn will have less to spend. Thus sales will drop and the tax revenue so hoped for by the Democrats will not materialize. A further side effect will be either no new job creation or further lay-offs.

The so-called rich, depending upon which state they live in, will within a year pay over 65% of their income in taxes. Higher taxes on this group, as history as proven, will actually result in less revenue to government as this group will either drop out of the economy or find ways to reduce taxable income.

That leaves: the so-called middle class as that is where the money is. All of the Obama voters that believed he would never raise taxes on anyone making less than $200,000.00 will soon find out otherwise. The Democrats will have nowhere else to go.

To further complicate this picture many of the individual states are also experiencing dramatic drops in tax receipts. Where are they to go to increase revenue? The same sources targeted by the federal government.

The stagnant economy we are now experiencing will become even worse as a result of focusing on taxes and fees and instead of spending.