The Last Year of Freedom?

“Oh say does that star-spangled banner yet wave over the land of the free and the home of the brave?”

This year our church had the vision to hold a Fourth of July outdoor service down on the waterfront of our picturesque town.  Hundreds of people showed up at Marina Park in Port Orchard at 11am where a praise band (that included our son Ryan) played over twenty tunes of Christian and patriotic music.

I had the privilege of leading the group in the Call2Fall application–a time of repentance and prayer on our knees before the God of heaven. We were joining thousands of others across the nation who were also on their knees confessing their sins and asking God for a desperately needed national revival.

First Christian Church pastor Kevin Hestead, gave the morning message as the sun broke through the clouds. He discussed the idea of freedom–and what a precious gift it is.

His remarks reminded me of the famous encounter that Ben Franklin had with an older women who’d come to hear about the results of the Constitutional Convention in the 1787. Upon seeing Mr. Franklin leave the meetings, the woman innocently asked him, “What have you given us, Dr. Franklin?”

His reply was one for the ages: “We have given you a a republic, madame–if you can keep it.”

If you can keep it.

I first pondered those words in 1976 while reading Rus Walton’s classic book One Nation Under God. They struck me as wise, prophetic–and a warning.

Liberty can be lost in one generation. It can be here one year and gone the next.

As I listened to the sermon on Sunday, July 4, 2010, a disturbing thought came to my mind:

“Could this be the last year of liberty?”

At first glance that thought seems rather foolish. America has known an unprecedented degree of freedom as a nation for two hundred and thirty-four years. The Statue of Liberty in New York harbor speaks to the nation and world of our love of liberty.  For over a hundred years we have been the freest and most prosperous nation on earth–with only 6% of the world’s population producing over fifty percent of the world’s goods and services.

But this year, for the first time, we dropped from our lofty pedestal as the world’s champion of freedom. As I pointed out in an earlier blog, the United States is no longer the pre-eminent beacon of liberty in the world.  That ranking goes to Hong Kong (part of a Communist nation) and Singapore where much investment capital is headed. The Index of Economic Freedom has the US plummeting to eighth in the world in economic freedom and sinking fast.

Due to the staggering Obama administration deficits, the Congressional Budget Office now predicts that the US debt load will reach 62% of GDP by the end of the year–far above the normal level which has averaged between 36%-40% for decades.  

Debt is slavery–not freedom. “The borrower becomes the lender’s slave” (Proverbs 22:7) is the true axiom from Scripture. But there are other considerations in liberty versus bondage.

Human freedom actually has a number of dimensions–and they work in a general order.

The first is spiritual freedom–what my pastor shared on Sunday. Jesus Himself said, “If you abide in my word then you are truly my disciples and you will know the truth, and the truth will set you free” (John 8:32). The beginning of liberty in a human being is being set free from the power and penalty of sin through faith in Jesus Christ. Being “born again” is a description of the spiritual freedom that comes through submission to God and casting off of “self.” It is the first step of human liberation.

The second is moral freedom which is the result of Christ’s work in our hearts. When we are reconciled to God, the Holy Spirit begins to empower us to make the right moral choices and become the kind of person we can never be in a self-centered, unredeemed state. Faith gives birth to morality in free peoples.

Moral freedom leads to economic freedom and prosperity, including increased creativity and a strong personal work ethic. It is faith, morality, and hard work that changed America from a mediocre group of colonies into an economic powerhouse in the 20st century. Prosperity is s fruit of faithful, moral character. This was the secret to America’s greatness in past generations.

And economic liberty leads to national security, which is military freedom. It was America’s rebirth of faith, morality, and economic vitality in the 1980s that defeated the Soviet Union and caused the fall of communism on a global scale. It is “right that makes might” as Abraham Lincoln once told us.

I am concerned for my nation in all of these arenas–faith, morality, economics, and national security. Freedom in our nation is on its last legs–and it may not take much to lurch us off the cliff.

And something is coming in less than six months that could just be the nail in the coffin.

Author and radio host Ken Talbott, of TheWalkShow.com has alerted me to the following possible death blows to American freedom. In just six months, the largest tax hikes in the history of America will take effect.  They will hit families and small businesses in three great waves on January 1, 2011:

First Wave: Expiration of 2001 and 2003 Tax Relief

In 2001 and 2003, the GOP Congress enacted several tax cuts for investors, small business owners, and families.  These will all expire on January 1, 2011:

Personal income tax rates will rise.  The top income tax rate will rise from 35 to 39.6 percent (this is also the rate at which two-thirds of small business profits are taxed).  The lowest rate will rise from 10 to 15 percent.  All the rates in between will also rise.  Itemized deductions and personal exemptions will again phase out, which has the same mathematical effect as higher marginal tax rates.  The full list of marginal rate hikes is below:

– The 10% bracket rises to an expanded 15%
– The 25% bracket rises to 28%
– The 28% bracket rises to 31%
– The 33% bracket rises to 36%
– The 35% bracket rises to 39.6%

Higher taxes on marriage and family.  The “marriage penalty” (narrower tax brackets for married couples) will return from the first dollar of income.  The child tax credit will be cut in half from $1000 to $500 per child.  The standard deduction will no longer be doubled for married couples relative to the single level.  The dependent care and adoption tax credits will be cut.

The return of the Death Tax.  This year, there is no death tax.  For those dying on or after January 1 2011, there is a 55 percent top death tax rate on estates over $1 million.  A person leaving behind two homes and a retirement account could easily pass along a death tax bill to their loved ones.

Higher tax rates on savers and investors.  The capital gains tax will rise from 15 percent this year to 20 percent in 2011.  The dividends tax will rise from 15 percent this year to 39.6 percent in 2011.  These rates will rise another 3.8 percent in 2013.

Second Wave: Obamacare

There are over twenty new or higher taxes in Obamacare.  Several will first go into effect on January 1, 2011.  They include:

The “Medicine Cabinet Tax” Thanks to Obamacare, Americans will no longer be able to use health savings account (HSA), flexible spending account (FSA), or health reimbursement (HRA) pre-tax dollars to purchase non-prescription, over-the-counter medicines (except insulin).

The “Special Needs Kids Tax”  This provision of Obamacare imposes a cap on flexible spending accounts (FSAs) of $2500 (Currently, there is no federal government limit).  There is one group of FSA owners for whom this new cap will be particularly cruel and onerous: parents of special needs children.  There are thousands of families with special needs children in the United States, and many of them use FSAs to pay for special needs education.  Tuition rates at one leading school that teaches special needs children in Washington, D.C. (National Child Research Center) can easily exceed $14,000 per year.  Under tax rules, FSA dollars can be used to pay for this type of special needs education.  

The HSA Withdrawal Tax Hike. This provision of Obamacare increases the additional tax on non-medical early withdrawals from an HSA from 10 to 20 percent, disadvantaging them relative to IRAs and other tax-advantaged accounts, which remain at 10 percent.

Third Wave: The Alternative Minimum Tax and Employer Tax Hikes

When Americans prepare to file their tax returns in January of 2011, they’ll be in for a nasty surprise—the AMT won’t be held harmless, and many tax relief provisions will have expired.  The major items include:

The AMT (Alternative Minimum Tax) will ensnare over 28 million families, up from 4 million last year.  According to the left-leaning Tax Policy Center, Congress’ failure to index the AMT will lead to an explosion of AMT taxpaying families—rising from 4 million last year to 28.5 million.  These families will have to calculate their tax burdens twice, and pay taxes at the higher level.  The AMT was created in 1969 to ensnare a handful of taxpayers.

Small business expensing will be slashed and 50% expensing will disappear.  Small businesses can normally expense (rather than slowly-deduct, or “depreciate”) equipment purchases up to $250,000.  This will be cut all the way down to $25,000.  Larger businesses can expense half of their purchases of equipment.  In January of 2011, all of it will have to be “depreciated.”

Taxes will be raised on all types of businesses.  There are literally scores of tax hikes on business that will take place.  The biggest is the loss of the “research and experimentation tax credit,” but there are many, many others.  Combining high marginal tax rates with the loss of this tax relief will cost jobs.

Tax Benefits for Education and Teaching Reduced.  The deduction for tuition and fees will not be available.  Tax credits for education will be limited.  Teachers will no longer be able to deduct classroom expenses.  Coverdell Education Savings Accounts will be cut.  Employer-provided educational assistance is curtailed.  The student loan interest deduction will be disallowed for hundreds of thousands of families.

Charitable Contributions from IRAs no longer allowed.  Under current law, a retired person with an IRA can contribute up to $100,000 per year directly to a charity from their IRA.  This contribution also counts toward an annual “required minimum distribution.”  This ability will no longer be there. (PDF Version. Read more: http://www.atr.org/sixmonths.html?content=5171#ixzz0skDBRGLz.)

These areas describe the economic bondage that will take an exponential jump next year. I personally believe they are the result of the first two–increasing unbelief and elimination of God from the public arena, and a dizzying array of immorality in personal lives and families.

But I am not giving in. Freedom can be reborn and it must begin with me.

Let’s re-kindle the passion and power of Patrick Henry’s famous speech delivered at St. John’s Church in 1775. His remarks are famous for the line, “Give me liberty or give me death!” But the speech in its entirety says so much more about the cause for freedom. Here is Henry’s call to every American in every generation:

“There is no longer any room for hope. If we wish to be free- if we mean to preserve inviolate those inestimable privileges for which we have been so long contending-if we mean not basely to abandon the noble struggle in which we have been so long engaged, and which we have pledged ourselves never to abandon until the glorious object of our contest shall be obtained-we must fight! I repeat it, sir, we must fight! An appeal to arms and to the God of hosts is all that is left us!”

Is this the last year of American liberty? Over my dead body! While I’m alive, I will confess my sins, pray to God, look to Christ, live morally, work hard, vote and work for change in November, and put my trust in a mighty Redeemer.

“Oh say does that star-spangled banner yet wave over the land of the free and the home of the brave?”