In this statement, Clarence Thomas has summed up a lot of the “progressive” American mentality. Nothing illustrates this more than Obamanomics or the future redistribution of wealth that we are likely to see under an Obama administration.
We’re all familiar with the “Joe-the-plumber” redistribution of wealth quote. At least Obama was honest in this situation of his intent for his future tax policy. Interestingly, this is the only occasion where he’s come clean on his intensions. Why? Why not tell it like it is to everybody? I guess that’s not very politically popular amongst potential supporters.
Let’s look at how Obama has been wrong on government spending.
1. Obama claims that there is a federal “investment deficit” in many needed federal programs. I’d like to know what he means given the following information.
“Over the past eight years the federal budget has exploded by more than $1.1 trillion, much of it for the very programs that Democrats want to spend more on. Let’s start with infrastructure. Three years ago Congress passed a transportation bill of more than $286 billion. The transportation budget is up 22% after inflation in the past eight years…How about aid to local communities? That spending has soared by 91% after inflation in eight years. The education budget is up 57%. Welfare programs are up 30%. Only two years ago Democrats were calling the Tom DeLay Republicans spendthrift. Now they say there’s an “investment deficit.”"
So with all this increased spending over the last eight years (an issue I have with the administration), where is this “investment deficit”? How much more does Obama want to increase these budgets given his 1 trillion in proposed new spending?
2. Obama’s plan proposes to raise taxes on the top 5% while lowering or keeping the same taxes on the rest of us 95%. If this is not redistribution of wealth, I don’t know what is. While I directly benefit from this, I do not think that this system is “fair” as Obama claims it to be. As Adam Lerrick from Carnegie Mellon points out…
“In 2006, the latest year for which we have Census data, 220 million Americans were eligible to vote and 89 million — 40% — paid no income taxes. According to the Tax Policy Center (a joint venture of the Brookings Institution and the Urban Institute), this will jump to 49% when Mr. Obama’s cash credits remove 18 million more voters from the tax rolls. What’s more, there are an additional 24 million taxpayers (11% of the electorate) who will pay a minimal amount of income taxes — less than 5% of their income and less than $1,000 annually.
In all, three out of every five voters will pay little or nothing in income taxes under Mr. Obama’s plans and gain when taxes rise on the 40% that already pays 95% of income tax revenues.”
As this article says,
“Our tax system is designed so that only the people in the top three tiers (or tax brackets) actually pay income tax. When you hear a politician talk about lowering you taxes what they really mean is adjusting the bracket percentages down. They also like to call tax credits “lowering your taxes”. But what they really mean is they are going to take more money from someone else (those that don’t get the credit) and give it to you.”
But tax credits carry with it severe risk as pointed out here by J. Kenneth Blackwell.
“Of course, Obama knows that the term “socialist” would kill his plan, so he calls it a “refund” instead. But there’s no way it’s not socialist; he’s either:
* Giving a “refund” on taxes people never paid to start with,
* Moving us drastically closer to the day Social Security and Medicare go bankrupt, requiring a massive bailout by other sources of taxation,
* Or outright turning the core federal retirement funds into welfare programs.
The deficit now runs hundreds of billions of dollars per year. Yet Obama proposes almost $1 trillion of new spending - and promises to also give “rebates” to the 38 percent of us who pay no income tax. Where is that money coming from?”
3. Obama and company seem to believe that the rich no longer pay their fair share because of the Bush tax cuts. But as Dick Morris, the former advisor to Bill Clinton, points out, those very Bush tax cuts lead to higher percentages in federal income tax paid by the rich.
“It is true that the richest Americans are getting richer a lot faster than the rest of the country. The top 10 percent experienced a real (after inflation) income growth of almost 50 percent in this decade. The rest of America saw its income rise, but by less than 5 percent after inflation.
But it wasn’t Bush tax cuts that fueled the growing inequality. The top 1 percent of American taxpayers now pay 40 percent of the taxes (compared with 33 percent in 2003 and 24 percent in 1986).”
So, Obama wants to increase the tax burden on the most successful individuals, give tax “rebates” to the bottom 90% equating to a hand-out, and spend a lot more money on programs that have already drastically increased in the past several years. And I haven’t even touched on health care.
Why again is this what’s best for the country? Where’s the fairness? Perhaps I’m missing his message of hope and change that everything will be better as long as he becomes president. I hope for his sake and ours that he doesn’t take his tax proposal seriously.
Cheers,
Joel
5 comments ↓
Yes keep taxing the rich till they take their fortunes and the jobs they provide overseas! What a Obamanation. We need Fairtax.
Joel, if you could use some references from someone other than Dick Morris, Kenneth Blackwell and the WSJ Opinion section we might have a discussion… but you’re basically defending a philosophy that has been, and is now being repudiated by facts and history.
Reagan’s trickle-down economics didn’t actually trickle down and even though there is still a laissez-faire fringe in America (just follow his links if you’re curious about that fringe), the economic crisis we’re in shows that it’s time for a fundamental change in the way we think about wealth and taxation. Obama is supported by many economists and even many conservatives because they know his tax plan is superior to and more FAIR than McBush’s. When you lower taxes on the middle class you get more spending which leads to a stronger economy.
That same middle class is threatening to die out while fat cats who make over $250,000 (and receiving multi-million dollar parachutes for running banks into the ground) are doing just fine. They can afford a little bit higher taxes to pay for the trillion dollar Iraq war and $700 billion Wall Street bailout.
It’s unconscionable to say, at this point in history that we should continue the tax policies of George W. Bush! There has to be a better way (the fair tax might be it) and if you look past the far right opinions you might find it.
http://www.nysun.com/national/obama-aides-say-he-would-lower-taxes/83970/?print=8900088121
Besides, taxes are just one of many important issues in this campaign. I encourage you to read some of the conservative endorsements for Obama that have been coming out recently and give them some serious thought:
http://smskullsessions.com/blog/archives/389
Justin,
I understand that you may take issues with who I site for my case, but that doesn’t negate the underlying point. How is it fair that 49% of the working public will pay no taxes and may actually get money from the government in the form of a rebate? I dispute your claim that trickle-down economics has been repudiated by facts and history. If you are referring to the current economic situation, I don’t believe it qualifies. It is both lack of regulation AND too much government influence that can be blamed for the mess we’re in, not to mention extreme greed by EVERYONE (politicians and homeowners included).
I agree with you that when people spend money (middle class), the economy benefits. This is exactly what you found fault with, a while back, in Bush’s recommendation to spend money after 9/11. A little bit hypocritical, no? I realize the two situations are very different, but the principle, increased spending benefiting the economy, is the same.
I respect the conservative endorsements that you cite, but that does not convince me that voting for Obama is the best course. What it does tell me is that Obama’s inspirational message is capturing the minds of some moderate conservatives, and a handful of those further right, who are willing to stay their personal convictions for the moment. For the record, I think Obama could be a good President as long as he doesn’t realize some of his campaign promises. But my disagreements with him on a variety of issues lead me to support the American hero John McCain.
Joel, I’ve learned a lot more about the financial meltdown and current crisis since we last spoke. The mortgage meltdown had many factors including individual greed and governmental bias toward getting people in homes despite their inability to pay the bills. But I’ve come to realize that the mortgage mess was just the catalyst for this crisis. The biggest problem is “credit default swaps” which amount to nothing more than legalized gambling.
The “Commodity Futures Modernization Act of 2000″, passed by the outgoing Republican congress and signed by Bill Clinton is the single biggest example of dangerous deregulation. It led to $60 TRILLION of leveraged speculation by investment banks and is what caused the current credit freeze and international crisis. The american mortgage industry’s problems could have been kept to America, but because of this terrible deregulation we’re now in a global crisis.
For some great information, check out This American Life’s October 3rd show :http://www.thisamericanlife.org/Radio_Episode.aspx?sched=1263
And 60 minutes recent episode about “CDS financial instruments”. It’s illuminating:http://www.cbsnews.com/stories/2008/10/26/60minutes/main4546199.shtml
As to your point about the value of spending more money. It’s important to get money into the hands of consumers so they can spend more… not to encourage them to spend more and rack up more credit card debt. I think my statements show a nuanced view of the complicated issue and not hypocrisy.
At what point do your disagreements with Obama on taxes and abortion become outweighed by his superior temperment, intelligence and ability to inspire? Don’t we need someone to inspire us in these times of international and fiscal crisis? Don’t we need a leader who is bigger than his policies and will inspire millions to take up the cause? I do… and I don’t think that McCain and Obama come even close to equal on those issues… which are far more important than 49% of working families receiving tax rebates. (if that’s even true)
Think bigger, Joel. Think about the support we’ll engender from the rest of the world… the benefits of true leadership and inspiration that Obama will bring to all Americans and world citizens. Think about the better use of technology under an Obama administration and, though you may bristle at it, a Democratic house and senate that can work swiftly to GET THINGS DONE. In a time of crisis we need to be united as one America and tackle our problems, not spend our time squabbling over a few percentage points of taxes and government programs here or there. Obama’s promise (which you’ve never really doubted and I give you credit for that) is much bigger than any issue!
On this “redistribution of wealth” idea, watch this video about how Reagan redistributed wealth… from Reagan Policy advisor, David Gergen.
http://www.youtube.com/watch?v=ytJ8YT79iFo
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