One year ago, the Wall Street Journal reported on the inverse relationship between higher taxes rates and revenue streams (click the title link to see the original). In short, they reported an often observed truth - within limits, tax rate reductions lead to better reporting and more complete payment, thus increasing government income streams. This should make sense even on a basic and general level. If one is not taxed unreasonably, one is more likely to report full income, and not attempt to evade one's tax burden. If one is taxed at the 70% level, however, 'escape and evasion' becomes the modus operandi. That is exactly what Obama is proposing to do, and its only real effect is going to be to raise the deficit.
The current deficit is expected to top $ 1 trillion shortly, and even if Obama can get Congress to limit tax increases to the $120 K mark of income (yes, the goal has moved again), and even if not one household in that income bracket made any attempt to evade taxation, that tax burden will not overcome the current deficit. If all of Obama's spending proposals go through, the deficit is likely to top $4 trillion in short order, leaving two choices: increases taxes on everyone from $40K/annually on up, or leave a huge deficit that will be the responsibility of several generations to pay. This is not a fiscal policy that will lead to increased employment and growth - it's a jobs-killer. If one adds in the increased taxes on Capitol Gains, Medicare, health insurance, etc., it becomes impossible to maintain a limit on who sees a tax increase and who pays. In fact, those additional tax burdens ensure that everyone sees a tax increase, and that our grandchildren will be paying for the country's addiction to easy spending and welfare. John McCain is right - what we need is a return to fiscal discipline, limited spending, and the right policy to grow jobs and the economy, namely a freeze or reduction in taxes. Do the right thing for your country and your children - Vote McCain.
Showing posts with label spread the wealth. Show all posts
Showing posts with label spread the wealth. Show all posts
01 November 2008
25 October 2008
Fuzzy Math
Sen. Obama's tax and spending proposals have been dissected in this blog and elsewhere ad nauseum, so I will not dwell on all of them here. My concern in this article is to specifically address the blatant attempts on the part of the Obama campaign do deceive through fuzzy math. The deception specifically relates that most basic of household activities, balancing a checkbook. A caveat: I do not always succeed at this activity myself (mostly from failure to take time), so I can relate to someone who might struggle to do so. I can not however, excuse a planned, deliberate national policy that is not only designed to end in imbalance, but is designed to deceive the public.
Our national debt currently stands at over $1 trillion. Obama's proposed plans for tax rebates and increased spending, amount to around $1.6 trillion. Additionally, he proposes an additional $1.4 trillion according to the National Taxpayers Union. Multiple reports have stated that Obama's proposals would dramatically increase the deficit, would eventually increase taxes on the very middle class he purports to protect, and would slow growth just as we're entering a global recession. Would people get money from from the government under Obama's plans? Yes they would. Would these policies be the best way to grow the economy and spread opportunity (rather than 'the wealth')? No they would not. It is physically impossible for 5% of the populace to take care of a $4 trillion + deficit, and the demands that the Obama policies place on business and individuals in exchange for the benefits they supposedly will receive are onerous at best. The government should be in the business of creating a favorable climate for growth, and then allowing that to succeed or fail, not ensuring that everyone is the same. Freedom and equality depend on limits on government action as much as they do on government action.
How are we going to pay for this massive deficit under the Obama plan? We don't know for certain since Obama has been particularly vague (even more than normally) in stating if he would cut any spending, and what his intentions toward the deficit are. We might have some clues however. In an interview on CNBC the other day, Rep. Barney Franks alternately said we should forget the deficit for awhile and find the 'plenty of other rich people' out there to increase taxes on. There have been several reports examining a possible market reaction to the anti-growth nature of the Obama proposals recently, and of course, we Obama's promise to spread the wealth and Biden's statement that paying taxes is our religious and patriotic duty.
I would agree that paying taxes are necessary and important for government functions. I would even agree that there's a case to be made for increasing the tax rate somewhat on higher income levels. But I find it ludicrous that liberals are constantly referring to all increased taxes as 'progressive' and all decreased taxes as 'regressive' (particularly as concerns higher income tax brackets). The higher the burden a small or middle-sized business has to bear, the less they'll be able to pay for additional work-force. If a small business is pulling in a million a year, after paying the additional taxes under the Obama plan (which the owner is charged at an individual rate as if the business income is a personal take for the owner), the additional health care, the additional Medicare, overhead costs, and reinvestment in the business, there would be precious little left to make the business worthwhile. If the owner then invested what little he or she took home, Obama would then increase the rate of the capitol gains tax paid upon those investments, and increase the tax rate upon the inheritance built over the years.
The Obama policies are quite simply, anti-growth. They are socialist in nature, but worse, they will hand a tremendous deficit down at least several generations. What really bothers me the most, is the consistent attempt by Obama and Biden to sell these policies, in the vaguest of terms, as helpful to the middle-class. These proposals simply don't add up, and are deceptive. This is not change we can believe in. In fact, it's our patriotic duty to vote against it.
Our national debt currently stands at over $1 trillion. Obama's proposed plans for tax rebates and increased spending, amount to around $1.6 trillion. Additionally, he proposes an additional $1.4 trillion according to the National Taxpayers Union. Multiple reports have stated that Obama's proposals would dramatically increase the deficit, would eventually increase taxes on the very middle class he purports to protect, and would slow growth just as we're entering a global recession. Would people get money from from the government under Obama's plans? Yes they would. Would these policies be the best way to grow the economy and spread opportunity (rather than 'the wealth')? No they would not. It is physically impossible for 5% of the populace to take care of a $4 trillion + deficit, and the demands that the Obama policies place on business and individuals in exchange for the benefits they supposedly will receive are onerous at best. The government should be in the business of creating a favorable climate for growth, and then allowing that to succeed or fail, not ensuring that everyone is the same. Freedom and equality depend on limits on government action as much as they do on government action.
How are we going to pay for this massive deficit under the Obama plan? We don't know for certain since Obama has been particularly vague (even more than normally) in stating if he would cut any spending, and what his intentions toward the deficit are. We might have some clues however. In an interview on CNBC the other day, Rep. Barney Franks alternately said we should forget the deficit for awhile and find the 'plenty of other rich people' out there to increase taxes on. There have been several reports examining a possible market reaction to the anti-growth nature of the Obama proposals recently, and of course, we Obama's promise to spread the wealth and Biden's statement that paying taxes is our religious and patriotic duty.
I would agree that paying taxes are necessary and important for government functions. I would even agree that there's a case to be made for increasing the tax rate somewhat on higher income levels. But I find it ludicrous that liberals are constantly referring to all increased taxes as 'progressive' and all decreased taxes as 'regressive' (particularly as concerns higher income tax brackets). The higher the burden a small or middle-sized business has to bear, the less they'll be able to pay for additional work-force. If a small business is pulling in a million a year, after paying the additional taxes under the Obama plan (which the owner is charged at an individual rate as if the business income is a personal take for the owner), the additional health care, the additional Medicare, overhead costs, and reinvestment in the business, there would be precious little left to make the business worthwhile. If the owner then invested what little he or she took home, Obama would then increase the rate of the capitol gains tax paid upon those investments, and increase the tax rate upon the inheritance built over the years.
The Obama policies are quite simply, anti-growth. They are socialist in nature, but worse, they will hand a tremendous deficit down at least several generations. What really bothers me the most, is the consistent attempt by Obama and Biden to sell these policies, in the vaguest of terms, as helpful to the middle-class. These proposals simply don't add up, and are deceptive. This is not change we can believe in. In fact, it's our patriotic duty to vote against it.
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