Monday, October 20, 2008

Stop Me If You've Heard This Before

It's the centerpiece of Barack Obama's pitch. 95% of Americans, The One assures us, will get a tax cut. Well, there's a problem with that -- as many as 40% of the public doesn't actually pay income taxes - they might have taxes withheld, but they get every penny back and sometimes more. So how do you give someone who isn't paying income tax a refund?

You take it from someone else, of course. The Wall Street Journal's William McGurn explains it well - the real bone of contention is the payroll tax, which funds Social Security. You can't take money out of the "lockbox" of course, so what's happening is really a bait and switch where money is taken from taxpayers and given to those who aren't paying taxes. You could call it what it really is, which is welfare. You could also call it what Obama discussed with our old pal Joe the Plumber, which is "spreading the wealth around." Or you could call it buying votes.

But my guess is that, in the end, what we're going to call it is a mirage. I'm old enough to remember 1992, when then-candidate Bill Clinton, who ran as a fiscal conservative, told us that a tax cut, specifically for the middle class was in the offing. Oddly, I never got that. If Barack Obama wins, we'll hear that, darn the luck, that $700 billion bailout has the government tapped out.

If you really believe that Barack Obama is a better candidate than John McCain, go ahead and vote for him. If you really believe that a guy who has never been an executive can suddenly take on the largest, most divergent executive job imaginable, then cast your vote accordingly. But if you are voting for Barack Obama because he's promised you a tax cut, you really need to think it through.


Anonymous said...

a point of clarification: Obama has said that he will cut taxes for 95% of "working" families. A small but significant point. You have to be working to receive the tax cut/credit, etc. I do realize that many who are working don't actually pay Federal taxes when all is said and done, but I take that as a broad indicator of the plight of the working poor in this country. I would also note that the vast majority of us don't pay taxes at our actual rate.

Also, neither candidate has any executive experience, so I am not sure I understand your point about "if you want to vote for a guy with no executive experience..." I believe we are all in that boat, unless of course, Bob Barr has held an executive position I don't know about.

On your larger point, that Obama is talking out his ass, I don't disagree. But I would counter with the observation that McCain is just as full of it when he states that he will balance the budget in 4 years. (I believe he is planning to do that right after he defeats Evil!)

One thing we should all be honest with ourselves about is that, regarding fiscal initiatives, no matter what tax cuts, credits, balanced budgets, etc. either candidate promises right now, it is all wishful thinking and will not happen anytime soon. Both candidates, in more honest moments, have acknowledged that the onset of the global economic downturn will almost certainly impact their economic strategies and that their campaign promises may (almost certainly will) have to be altered.


Mark Heuring said...

McCain was an officer in the military, Rich. That's clearly executive experience.

And you're right, most of us don't pay taxes at our "actual" rate. But who knows what the actual rate really is anymore? My finances aren't all that complicated, but I have needed an accountant for years. But that's a different post, no?

Anonymous said...

If 40% of the population are already on the dole, all one has to do is hoodwink another 10% and one can get elected. Meanwhile the remaining half (or 40% or whatever the number is) pay ALL of the bills. "This government will work until the politicians realize that they can bribe the people with the people's money"