Taking Stock by Malcolm Berko

Dear Mr. Berko: I'm 21 and voted in my first election last year. I'm incensed that President Obama has failed to live up to his promises. Gitmo is still there. There's no health care bill; education is still a mess and so is immigration. The president hasn't promoted coal-to-liquid-fuel technology; he hasn't even addressed our welfare problem; he hasn't eliminated income taxes on seniors making under $50,000, ended tax breaks for companies sending jobs overseas, renegotiated NAFTA or imposed a windfall tax on oil company profits, etc. And I could go on for pages of promises he has not kept. And now I'm hearing that Obama intends to increase the taxes of every taxpayer regardless of income. I can't believe this because he was so positive about not increasing taxes on couples who earn under $250,000. Is he really going to raise taxes on the 95 percent of us who don't earn $250,000? — W.D., Troy, Mich.

Dear W.D.: Like most Americans who vote with their hearts rather than common sense (why is it called "common sense" when it's really not very common?) you have to learn the hard way. A politician's campaign promises aren't worth a tin penny, a rusty nail or yesterday's spit.

Your disappointment with President Obama for failing to hold his campaign promises is a textbook example of American's naivete about the political process. You must recognize that: First, there are speeches, and our president is darn good at those. Then there are position papers! The Obama folks wrote some real good ones, hooking a lot of voters. Then there are campaign promises. Most voters believed President Obama was preaching the Gospel. Finally, there's reality! And that's where it ends.

Voters must understand that there are eight core problems that are impossible to fix: Education, Immigration, Health Care, Political Corruption, Discrimination, Welfare, the Tax System and Poverty. So when a politician campaigns on any of these issues, it's basically rhetoric that sounds good on the stump, but they're tilting at windmills.

Now the federal budget deficit zoomed to $1.4 trillion in the 2009 fiscal year.

However, we know that the administration (past administration, too) is not known for its veracity. In fact, many observers believe that the $1.4 trillion is pure persiflage and palaver. They suggest that the real number is closer to $1.7 trillion. But as Rahm Emanuel (a very good friend of Illinois' ex-Gov. Blagojevich) would say, "What's $300 billion between friends?" And it's certainly headed higher in 2010 and it's certainly headed enormously higher when Congress passes the health care bill. There's even semi-serious talk that Moody's and Standard & Poor's might lower their ratings on the U.S. Treasury Bonds.

However, your taxes may be increased to pay for all this frosting. The following are some of the new revenue sources Congress is considering: A tax each time an investor buys or sells a stock. A discount on prepaid or state taxes. An increase in the federal gas tax of 5 cents per gallon. A new luxury tax on autos, boats, jewelry and other expensive toys. A retirement plan tax on the annual accumulation of assets in your IRA, 403(b), 401(k), Profit Sharing Plan, etc. (The tax would be a credit against your future tax liability when you withdraw the funds upon retirement.) A tax on the accumulation in your annuities, and on the growing cash value of your life insurance, which will be credited to your future tax liability when you withdraw the funds.

While the tax rate on couples earning above $250,000 Congress will increase, Congress is considering surtax on the taxes of those who earn less than $250,000. And, certainly, the earning threshold tax on Social Security and Medicare will increase. Congress is also considering a tax on tort awards, but the attorneys are really fighting this one. Finally, Congress is considering a value added tax. This could be a real lollapalooza and gives most of us a lot of the screamie-meemies.

There's more — a lot more — and you can thank the wise, wonderful and caring 535 congresspeople who will make these new taxes possible for you. I hope you don't think I'm making a mountain out of a molehill, but that's the whole kettle of fish and the entire ball of wax in a nutshell.

Please address your financial questions to Malcolm Berko, P.O. Box 8303, Largo, FL 33775 or e-mail him at mjberko@yahoo.com. To find out more about Malcolm Berko and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.

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