A Knight In Leaden Armor

The economy is struggling, jobs are disappearing rapidly. The deficit is already more than double last years total only nine months into the fiscal year. There is little hope in the numbers behind the already grim reported statistics. But Nancy Pelosi has called in her knight in leaden armor to put everything right. Yes, it’s the hero of a job-killing, economy-destroying, Democrat-controlled House of Representatives:

Surtax.

Every detail isn’t known, but late last week Ways and Means Chairman Charlie Rangel disclosed that his draft bill would impose a “surtax” on individuals with adjusted gross income of more than $280,000 a year. This would hit job creators especially hard because more than six of every 10 who earn that much are small business owners, operators or investors, according to a 2007 Treasury study. That study also found that almost half of the income taxed at this highest rate is small business income from the more than 500,000 sole proprietorships and subchapter S corporations whose owners pay the individual rate.

In addition, many more smaller business owners with lower profits would be hit by the Rangel plan’s payroll tax surcharge. That surcharge would apply to all firms with 25 or more workers that don’t offer health insurance to their employees, and it would amount to an astonishing eight percentage point fee above the current 15% payroll levy.

Here’s the ugly income-tax math. First, Mr. Obama has promised to let the lower Bush tax rates expire after 2010. This would raise the top personal income tax rate to 39.6% from 35%, and the next rate to 36% from 33%. The Bush expiration would also phase out various tax deductions and exemptions, bringing the top marginal rate to as high as 41%.

Then add the Rangel Surtax of one percentage point, starting at $280,000 ($350,000 for couples), plus another percentage point at $400,000 ($500,000 for couples), rising to three points on more than $800,000 ($1 million) in 2011. But wait, there’s more. The surcharge could rise by two more percentage points in 2013 if health-care costs are larger than advertised — which is a near-certainty. Add all of this up and the top marginal tax rate would climb to 46%, which hasn’t been seen in the U.S. since the Reagan tax reform of 1986 cut the top rate to 28% from 50%.

The one hope for this economy is that small business steps up and creates jobs. However, Pelosi and her minions have promised to wrap those small business owners in the weighty. leaden embrace of Surtax – then want the business owners to swim the river, so to speak.

Needless to say, most small business owners are reluctant to join Pelosi’s swim club. Hence, the jobs will not be forthcoming. Therefore, the consumer spending required to kickstart the economy will also not be forthcoming. (People tend to spend a lot less when they have no job.) Small businessmen now have a very, very, very strong disincentive to grow their businesses by hiring more people, lest Surtax be their swim partner.

The Democrats are intent on killing the economy, jobs and prosperity. Surtax will ensure that outcome.

A knight in leaden armor strides forth from Pelosi’s lair.

How’s that hope coming?

Must Guard Master

Sadly, Australia’s surrender to the Animal Uprising™ is complete. They are now deploying super special snipers to guard their penguin masters.

Australia has posted snipers to protect endangered penguins in its biggest city, Sydney, after a spate of attacks, officials said on Tuesday.

The National Parks and Wildlife Service deployed its own marksmen as well as infrared cameras and traps after nine penguins were mauled to death by dogs or foxes in bushland to the city’s north.

Parks officials have carried out autopsies on the dead penguins and are also using DNA testing to try to track their killers.

“We’ve been working really hard to try to protect the endangered little penguins since we’ve had nine killed in the last couple of weeks,” a spokeswoman told AFP.

Protection or obedience? We report, you decide. We here at Blue Crab Boulevard suspect the latter, of course. The little guys in the tuxes are calling the shots – literally.

Worse Yet

Mortimer Zuckerman in The Wall Street Journal: It’s worse than you think.

- June’s total assumed 185,000 people at work who probably were not. The government could not identify them; it made an assumption about trends. But many of the mythical jobs are in industries that have absolutely no job creation, e.g., finance. When the official numbers are adjusted over the next several months, June will look worse.

- More companies are asking employees to take unpaid leave. These people don’t count on the unemployment roll.

- No fewer than 1.4 million people wanted or were available for work in the last 12 months but were not counted. Why? Because they hadn’t searched for work in the four weeks preceding the survey.

- The number of workers taking part-time jobs due to the slack economy, a kind of stealth underemployment, has doubled in this recession to about nine million, or 5.8% of the work force. Add those whose hours have been cut to those who cannot find a full-time job and the total unemployed rises to 16.5%, putting the number of involuntarily idle in the range of 25 million.

That’s only a few of the ten reasons Zuckerman points out. Do go over and read the rest. Into this reality Nancy Pelosi and the House Democrats have launched economy-killing spend and tax proposals to over-regulate – or kill – darn near every engine of wealth expansion in America. And it is getting worse daily.

Had enough change yet?

Unemployment was under 5% for much of the Bush presidency. In just six months, the economy has sagged to a level not seen in decades.

How’s that hope holding up?