October 28, 2008

Obama's "Tax Tsunami"

As we wrote some time ago, conservatives already start complaining about the Obama administration "raising taxes," something that seems a bit premature, giving the fact that before anything could happen on this issue, at least TEN things must happen:

1) Obama should win a majority in the Electoral College on November 4
2) He should survive the plans to assassinate him through January 20, 2009
3) He should be sworn in on January 20
4) He should nominate a Secretary of the Treasury
5) This individual should be confirmed by the Senate
6) A plan to change the tax code should be presented to Congress
7) It should pass in the House
8) It should break an almost-certain filibuster in the Senate
9) It should pass the Senate

and finally, supposing that the bill doesn't need to go to a House-Senate conference to reconcile the differences,

10) It will go to Obama's desk for his signature, and in some time, it will be implemented.

Now, even if points 1, 2, 3 and 4 are reasonable forecasts (John McCain wouldn't agree, but that is that), all other requirements are events that may or may not happen. The Senate could be a stumbling block difficult to overcome, particularly on points n. 5 and 8. In the best case, nothing will happen before April or May next year, and this is a very optimistic forecast.
It sound almost comical, therefore, that former Republican candidate for vice president in 1996 Jack Kemps could write: 
In their new book, "The End of Prosperity," Art Laffer, Steve Moore and Peter Tanous argue that the threat of this tax tsunami is already destabilizing our financial markets and causing capital flight from America.
They write, "Hot capital is escaping over the borders out of the United States and flowing into China, India, Europe, and even Japan. . . Starting in late 2007, foreigners started pulling their money out of the United States, and Americans started investing more abroad. Global investors are losing confidence in the U.S.

These global investors are so terrified by Obama's bolshevik plans that the U.S. dollar went up almost 30% against the euro in just three months (from 0.63 in  July to 0.80 yesterday). "Losing confidence" in the currency, indeed.