Senior Citizens Get Ready for a Massive Tax Increase

Like corporations, the attitudes of political parties often reflect the attitudes of their leadership. During the Clinton years we learned that parsing words could be a fine art that allowed you to escape apparent responsibility for your acts. (You will remember that Pres. Clinton had difficulty remembering what “is” is, or whether oral favors from Monica Lewinsky constituted “sex with that woman.”)

That kind of double talk and parsing of words has continued among Democrats (and in some instances is being increasingly used by some Republicans.) It is particularly true when it comes to the Democrats discussing tax policy in an election year. The common theme of the Democrats this year is that they are not going to raise taxes except on the very rich. I’m never quite sure who the Democrats believe are the “very rich” and quite frankly they move that term around to “cover” whatever tax increase they are proposing.

But the fact of the matter is that the Democrats are proposing a massive tax increase. However, they say it isn’t a tax increase; rather, it is just the expiration of the Bush tax cuts. I was raised in a small town in Eastern Montana and where I come from if it walks like a duck, swims like a duck and quacks like a duck, it most probably is a duck. If the rate you pay in taxes next year is more than the rate you paid this year, we call that a tax increase.

I realize that those of us born, raised or living in small towns and rural areas are not as smart or sophisticated as the Washington elites, but we do know bulls**t when we see it and when we hear it.

In this instance, the group of people who are likely to get hit the hardest are the ones least able to afford it — senior citizens on fixed incomes. Yes, yes, I know that the Democrats profess to be the party that cares the most about our senior citizens but their actions demonstrate either a remarkable indifference to the lives of retirees or an ignorance on how senior citizens pay to make ends meet.

Senior citizens who rely solely on monthly social security payments are confined to a life of near poverty. For most senior citizens, they live on a combination of social security payments, pensions and their investments. Pension plans are funded by investment of employee and employer contributions in stocks, bonds and other securities. Those stocks pay dividends and realize capital gains when they are sold.

On January 1, 2009, unless the Democrat Congress acts, the tax rates for capital gains will double from ten percent to twenty percent, resulting in a ten percent loss in income to retirees dependent upon selling their investments. On January 1, 2009, the tax rate for dividend income will increase from fifteen percent to the rate of ordinary income resulting in an additional loss of income to retirees dependent upon dividends from their investments. The difficulties of absorbing the increases in the cost of living are about to be compounded by an increased tax burden.

For most retirees there is no means of replacing that lost income short of returning to the work force. The passage of time has not diminished the skills of retirees in many instances but the current demands of jobs equivalent to what they held before have advanced beyond those skill levels. Re-entering the workforce, in many instances, requires hard work and minimum wage positions — an unfortunate indignity imposed by those who profess to be their champions.

One wonders whether the Democrats care about the senior citizens or just about government and feeding the voracious appetite of government.
But the final indignity comes for those senior citizens who have worked hard all of their lives to build a small business or to sustain their farm or ranch. On January 1, 2011 the estate tax rate will increase from 45% to 55% and the amount exempt from the estate tax will decrease from the current level of $3.5 million to less than $1 million. (Currently, the amount of one’s estate exempt from taxation is scheduled to be unlimited at the end of 2009. Practically speaking, this means the difference between dying on December 31, 2010 and January 1, 2011 can mean 55 percent of your estate.)

I don’t care what “is” is, I don’t care whether oral favors constitute “sex” but I do care about a practiced lie by the Democrats that is about to cost taxpayers billions of dollars and hit the senior citizens the hardest. A tax increase is coming if the Democrats retain control of the Congress and a Democrat is elected as president and parsing of words doesn’t change that result.

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Posted by at 06:00 | Posted in Measure 37 | 4 Comments |Email This Post Email This Post |Print This Post Print This Post
  • Crawdude

    There is a much greater chance that the income tax rates won’t be raised in 2010 with McCain than Obama. Even though, I’m not sure if there is enough will in the Congress to raise them back up.

    That will be an election year and the ruling party would probably not want to try and defend its self after allowing the rates to rise.

  • Bob Clark

    I attended an energy forum held by senator Kate Brown and representative Rosenbaum recently. What is always so frustrating to me is every action they seem to support is one which will raise the cost of living in one way or another for me. Their green energy jobs platform is a case in point. It is said renewables will result in thousands of new Oregon jobs so we should ignore the large tax financed subsidies required to make these renewable jobs happen. Never mind it won’t decrease our electricity prices but raise them. They also support increasing the Public Purpose tax from the current 4% of your electricity bill to 5% or more. What’s really frustrating about this is our electricity and natural gas prices are already spiking, and now the state government wants to help raise it even more. Gee wiz, thanks a lot. I sure wish I didn’t live in a district where brain dead yuppies dominate the electorate and vote such shiesters into office.

    Why stop the ranting. Then there’s the state Health Board’s proposal to raise taxes on healthcare providers/insurance companies to fund the quirky, unstable Oregon Health Plan. Geez. So, raise the cost of healthcare for the majority of Oregonians, making it less affordable, so the bureaucrats can continue to toy around with their quota rationing plan. Finally, in my city, PDX, they won’t let a Wal-Mart store anywhere nears here. So, instead of paying 25 cents for a can of soda (12 pack at Wal-mart), I get to pay more 60 cents or more per can at the local grocery store. By the way, my neighbor works for Wal mart as a security guard and is glad to have the job.

    I love Bill Sizemore, and hope he keeps stickin it to the jerks running this state.

  • Delia Lopez

    Increasing taxes is not the answer. More subsidies just increases costs on us consumers. We need common sense in congress, not big government proponents. We need to reinstate the constitution. We are supposed to be in charge. Our seniors on fixed incomes are being badly squeezed by higher taxes and a shrinking dollar. As long as congress keeps printing and spending, we the people will keep getting robbed. Please look into my positions on the issues. I swear if elected I will support and defend the constitution, I will work hard to lower taxes and do a cost benefit analysis on any and all spending bills. I will work to get government out of your business and private matters. I have requested we debate the issues several times. One of my volunteers was told by my opponents campaign manager that ” he did not need the support of the people he has the backing of the environmentalists and the labor unions” The saddest part is that is true. If you have questions please contact me at dlopezforcongress at
    Delia Lopez
    US Congressional Candidate Oregon #3

  • Rupert in Springfield

    At last, some honesty from the Democrats.

    In short, if one believes in raising taxes on the wealthy then bravo for the democrats for looking directly at the elderly.

    Senior citizens represent the wealthiest demographic by age of any group. You want to tax the wealthy? Then tax senior citizens, that’s the wealthy. You made it to 65? Congratulations. I am so happy for you. For some reason all of us are subsidizing your retirement through social security, subsidizing your health care through Medicare and subsidizing your prescription drugs as well. I see no reason in the world why, simply because someone has achieved the age of 65, that they should be entitled to some sort of preferential tax status.

    Oh, but gee, fixed incomes and all that.

    Look, don’t give me any fixed income BS. Are dividends fixed? Hell no they aren’t. Are stock prices fixed? Hell no they aren’t. And that’s exactly what taxes we are talking about here. You want to talk about fixed income? I’m on a fixed income. I’m self employed and I can tell you, there is no way in the world I can ask myself for a raise and make it magically appear. Can I work harder and thereby make more money? Sure. Can senior citizens switch their investments to more aggressive mutual funds? Sure.

    Fixed income, schmixed income.

    So cry me a river when the Democrats, who love raising taxes on the wealthy, don’t give some sort of special dispensation to the wealthy who happen to be over 65.

    Personally I don’t believe in raising taxes at all. I also think it is insane to tax investment the way we do and then hear all the whining about the low savings rate in this country. I also think our taxing of corporations, which is off the charts, is absolutely absurd. No one thinks taxes should be lowered or eliminated more than me. That said, I can sure as hell tell you I am getting a little bit sick and tired of constantly having to subsidize someone just because they happen to be over 65. You want sympathy from me? How about means testing all of the stuff senior citizens already get.

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