Thursday, October 16, 2008
If anything has the power to change the outcome of this election at this late date, it would be Obama's revealing comment to "Joe the plumber" about how he wants to increase taxes on upper-income earners in order to "spread the wealth." This is just a sanitized version of the old socialist slogan: "from each according to his abilities, to each according to his needs." No wonder it has created such a stir.
On top of that, he has been deceptive in saying that 95% of households would receive a tax break. His proposals cut taxes for no one. He proposes to raise taxes for those earning over $250,000, and he wants to raise those same people's taxes on their capital gains and dividend income. Increased taxes on the "rich" will only give them an incentive to work less and shelter more of their income. Increased taxes on the fruits of capital only harms everyone, since it will reduce the incentive to invest on the margin, and investment is the only way that the economy can create jobs and prosperity for all.
Furthermore, he neglects to mention that the top 5% of income earners already pay 60% of all income taxes, which hardly seems fair to begin with. And finally, the tax cuts he wants for the poor and middle class are actually refundable tax credits. That means that those who earn (and work) the least will receive the most. His whole plan is based on the faulty notion that the middle class is the driver of the economy, when it is clear to anyone who understands economics that investment, risk-taking, entrepreneurship and hard work are the main drivers of the economy. Obama's tax proposals will increase the incentives for those who really drive the economy to work less, and increase the incentives for the rest of the people out there to work less as well.
And now comes word that this is only the beginning: Obama's advisor Jason Furman says "He (Obama) believes that one strong option to improve Social Security's long-term solvency is asking people who earn more than $250,000 to pay a little more into the system." In other words, let's tax the rich even more in order to give their money to everyone else. This exposes the truth about social security: it's a redistributive tax disguised as an annuity.
It's hard to be more wrong on such an important subject.
Posted by Scott Grannis at 8:11 PM