WHAT THE DEMOCRATS HAVE IN STORE FOR YOU.
Again .. do I think that the Republicans have earned our continued permission to control both the House and the Senate in Washington? Not only no, but hell no. The best that can be said of the Republicans now is that they're not Democrats, though they seem to be trying to erase any differences as fast as they can. Republicans in control for two more years --- spending and increasing the size of government --- is an acceptable outcome next week only because the alternative is so much worse.
This week I'm detailing some of the plans that the Democrats have for you and your bank accounts if and when they get the control that they think is their birthright.
Today I want to share with you another delicious little morsel the Democrats have waiting for you if they ever gain the political power they so ardently desire. It's called "imputed income." If you are a home owner, pay attention. This concerns your wallet and your bank account.
Let me start this off with a few points that I don't think you will dispute. Democrats are the party of big government. Democrats are the party of the social welfare state. Democrats want to make more and more Americans dependent on government because they know that the higher the degree of dependency the weaker the people and the stronger the government. It goes without saying that the stronger and more powerful government becomes, the stronger and more powerful the politicians who control that government become. This isn't rocket science here.
Money in the hands of the people who earned it contributes to their personal independence. Independent people don't need politicians. Money taken from those who earn it and then used to build the government social welfare state robs people of their independence. Democrats love this scenario. They want you to be dependent on government. To do that they need to take your money and use it to grow the federal welfare state. This is why Democrats just love the idea of tax increases.
To be sure, Democrats know that all of their rhetoric about raising taxes on the rich and the rich "paying their fair share" resonates well with their voter base. Playing to wealth envy will always earn votes ... but nothing earns votes quite like dependence on government. Creating that dependence, though, is an expensive proposition. To cover the tab the Democrats have to drain every penny from your pocket that they can -- right up to the point that you decide it's time to revolt.
Democrats will tell you that they only want to raise taxes on the so-called "rich." Nancy Pelosi will probably come up with some figure in the $200,000 or $250,000 range to describe "rich" when she and her Democrat pals start to work on their tax increase plans. But here's a warning. If you happen to fall below that "rich" category, you're in their crosshairs as well. They have various schemes in the works to put you smack in the middle of the "rich" category, and thus set you up for some pretty substantial tax increases.
One such scheme targets homeowners. It's called "imputed income," and its a brilliant and devious idea on how to tax your home ownership.
Here's how it works.
Let's say that you've owned your home for about 20 years. For 20 years your home has been appreciating in value ... big time. Your monthly payments on that home are about $550 a month. Remember, it's a 20-year-old loan made when the cost of your home was much, much less. There isn't much of a home mortgage tax deduction left at this point since you almost have the home paid off, and the bulk of your payments go to principal instead of interest.
The very fact that you're living in such a nice home, and paying so little, attracts the interest of Democrats. They know that there are a lot of people in your neighborhood that paid a lot more for their homes than you did, and their mortgage payments are a lot higher. Not only that, but there are other people renting homes in your neighborhood and they're paying much more than you are every month. It's obvious that you're enjoying some great economic benefit due to the fact that you've owned your home for so long and your payments are so low. Well, where there's an economic benefit, there must be a tax!
Enter the concept of imputed income!
Under this wonderful plan, first floated by Clinton Democrats before the voter revolution of 1994, the government would figure out how much your home would rent for every month. To do this they would use all of that census data they've gathered, plus any information that they can develop on current sale and rental prices up and down your street.
Let's say that the government --- the IRS, if you will --- determines that your home would rent for $3,250 a month. That would add up to $39,000 a year. But the IRS discovers that you're only paying $550 a month, or $6,600 a year in rent. Well, there's that economic benefit you're enjoying by virtue of your long-term home ownership. The economic benefit of your home ownership is the difference between the $39,000 you should be paying to live there, and the $6,600 you're actually paying. Do the math. You're getting away with $32,400 every year in non-taxed economic benefits!
The Democrat plan is simple. Just take that $32,400 and add it to your taxable income on your next tax return. Then you get the privilege of paying income taxes to the federal government on the economic benefit you derive from your long-term home ownership. The IRS has "evened the playing field" in your neighborhood ... so to speak. Your neighbors had to pay taxes on the full $39,000 they're paying to live down the street ... now you're having to do the same. After all ... it's only fair, right!
Just remember this. Democrats actually believe that the best use for every single penny you earn is for it to be spent by government for what they love to call the "common good." They will grudgingly allow you to keep enough of your earnings to avoid your participation in a full-scale tax revolt. A good Democrat knows that only Democrats and the government know what is good for you, and that you will be so much better off and your life oh so much better if you will just succumb to the power of government and it's ability to care for you much better than you can care for yourself.