T2AR: The Second American Revolution, Part 2

President Barack Obama has attempted to raise taxes on the rich, those making more than $250,000 per year, each year of his presidency. He believes they must pay their fair share even though the top 1% already pay 38.02% of all federal taxes and the top 10% pay 69.94% of all taxes (National Taxpayers Union). In 1999, the top 1% paid 36.18% of federal taxes, therefore the tax burden of the top 1% has actually increased – despite the infamous Bush tax cuts that so bother the President.

In the 1765, King George imposed the Stamp Act on the colonies. Tax stamps had to be put on 54 kinds of papers, from playing cards to newspapers. The payments varied from one cent on a newspaper to ten dollars on a college diploma. The payments had to be made in gold or silver. Patrick Henry of Virginia was outspoken about the taxes stating that Parliament passed the taxes but no colonists served in Parliament. James Otis, a Boston lawyer coined the phrase, “No taxation without representation”. Delegates sent a letter to Parliament demanding the tax be rescinded. The response was even more taxation. In 1767, the British imposed the Townsend Act on glass, tea, paper and paint. In response, Americans formed the Sons of Liberty whose motto was Join or Die. They harassed the tax collectors to such a degree that the British were forced to send 40,000 troops to the colonies to assist with the tax collection. Worse they informed the colonists that the British troops would live in the homes of the colonists, an action that infuriated the colonists.

On October 3rd, 2008, Congress passed The Emergency Economic Stabilization Act of 2008, using $700 billion to bail out American banks. On January 24, 2009, the Young Americans for Liberty in New York State organized a “Tea Party” to protest the bail out and obesity taxes proposed by New York Governor David Paterson.  On February 17, 2009, the American Recovery and Reinvestment Act of 2009 passed spending $800 billion on “Stimulus”. Two days later, CNBC Business News editor Rick Santelli ranted against the “Porkulus” bill and a government plan to refinance mortgages for irresponsible borrowers. He called for a new Tea Party. Within 24 hours, plans for Tea Party tax protests swept the nation.

Tea Party supporters protest Crony Capitalism that sends billions to companies whose owners are heavy political contributors. They feel disconnected from their elected representatives in Washington as their ancestors did 250 years ago. The result of their frustration may feel like a Second American Revolution as even more entrenched politicians are sent packing.

(Robert J Cristiano PhD is the Real Estate Professional in Residence at Chapman University in Orange, CA, Senior Fellow at The Pacific Research Institute and President of the international investment firm, L88 Investments LLC. He has been a successful real estate developer in Newport Beach California for thirty years.)

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