2008-11-12 / Editorial & Columns

Taxation's perfect storm

By E. Ralph Hostetter

A perfect storm occurs when the major elements of weather - humidity, temperature and in the case of hurricanes barometric pressure - reach critical levels and come into alignment in a given location. Its power can be awesome. Hurricane Katrina in 2005 was nearly a perfect storm.

Figuratively speaking, the perfect-storm theory might be applied to politics. For example, when the three most powerful elected officials in the United States, who share the same ideology and political philosophy, are placed in such an alignment, there is the potential for the creation of awesome political power.

Election Day, Nov. 4 did just that. It brought about the alignment of the three individuals who will hold these powerful positions. The positions are the President of the United States; the Speaker of the House of Representatives, and the Majority Leader of the United States Senate.

As Speaker of the House, Nancy Pelosi, D-Calif., has the authority to schedule all bills for members of the House to vote on. She has what is the same as absolute authority in this role. House Rules prescribe complicated procedures to bypass the Speaker. No Member has dared so far to attempt to bypass or challenge her, probably for fear of "political payback".

The Constitution provides that "all bills for raising Revenue shall originate in the House of Representatives." This includes all tax law. Thus, all legislation to create, increase, revise or reduce taxation must have the Speaker's approval. With a strong party majority now in the House, tremendous power is conferred upon its Speaker.

President Bush's legislation to cut taxes passed in 2003 contains the provision that his tax reductions are to expire in ten years from the effective date of the statute. This tax legislation can be repealed at any time. There are calls from the congressional left to do exactly that. Of note is the fact that only tax-reduction laws provide an automatic expiration date. No tax-increase law has been enacted in recent times with an expiration date.

Speaker Pelosi apparently favors increasing federal taxes and she can exercise the power to do so. Increased taxes evidently would begin with families jointly making $42,000 or more annually.

Next in line in the new alignment of power is Sen. Harry Reid, DNev. As Senate Majority Leader with a large majority of fifty-seven (and possibly more in the near future), he will exercise considerable power, if not as much as the House Speaker. All tax legislation, after originating in the House, must go to the Senate to be enacted into law. Like the House Speaker, the Majority Leader is in charge of the Senate's legislative schedule. The two of them currently have party majorities, share political philosophy and are in alignment as to tax policy.

The most powerful of the three, of course, will be President Barak Obama come Inauguration Day, Jan. 20, 2009. He, too, shares the leftist political philosophy of the leaders of Congress. As an important part of the Constitutional checks-and-balances system, all legislation must be presented to the president for his signature (approval) before it can become law.

The president also has the power of the veto. He can, thereby kill enactment of legislation unless his veto is overridden by a two-thirds vote of each house of congress. Considering the president's alignment with the Speaker and Senate Majority Leader very few vetoes, if any at all, would be expected in the Obama administration during the incoming 111th Congress given its new and more liberal political composition.

Sen. Obama announced his position on taxes in alignment with Congressional leaders in a statement he made during a door-to-door interview with the now- celebrated Holland, Ohio resident "Joe the Plumber". In answer to a question, the Senator told Joe of his belief in "spreading the wealth around." Whatever was intended by that statement, people familiar with it recognize that the concept is fundamental in Marxist and socialist dogma. Neither the House Speaker nor the Senate Majority Leader to date has rejected the "spread the wealth around" statement.

The elements for taxation's perfect storm will be in place Jan. 20 of next year. The electorate has chosen and now must prepare for the cloudburst of new tax law which will rain down on them in the future. There will be no shelter.

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