Monday, November 10, 2008

Good Column from Canada's "The Globe and Mail"

Excellent article from this past Friday's The Globe and Mail newspaper, by columnist Neil Reynolds, entitled "Obama's tax message has a Reagan resonance." In it, he points out the shocking differences in Obama's tax plan and McCain's, and why Americans ultimately rejected the latter. Not that taxes were the only issue, but the contrasts between McCain's pledge to not raise taxes, but actually substantially lower taxes on the rich, and Obama's to offer tax cuts to help the middle class, point out the clear bias that the Republicans have towards the wealthy. Their tax cuts -- skewed almost entirely towards the rich -- were defended again and again by both McCain and Palin, in a sickening display of perfidy towards the vast majority of their base who would not benefit from the Republicans special largesse to the big income earners.

Just as a for instance, and I'm quoting Mr. Reynolds here: "For people in the top 0.1 per cent of category, the 147,000 families with incomes in excess of $2.8-million, the Obama plan provided a tax increase of $701,000; the McCain plan, a tax cut of $270,000." By what reason, except the inexorable bias of the Republicans to provide special treatment to the wealthy, could McCain justify lowering taxes on people with that level of income? It's obscene, and though many midd-class Republicans continue to believe that the the party leadership has always had their best economic interest in mind, just do the math.

Read the article. It gives a succinct history of the U.S. tax rate ups and down, and should be required reading for anyone who may come up against a Republican apologist who's still fuming that McCain won't be getting into the White House. It also paints Obama as a well-read student of history who knows how to use the past to plan a better future.

1 comment:

Contrarian Profits said...

Following an historic election, let's take a moment to examine just what an Obama presidency will mean to the United States - what we have to look forward to, and how he will deal with our current economic issues. According Jim Davidson, some of the numbers just don’t add up:

"One of Obama’s specific proposals is to raise the capital gains and dividend taxes to 25%, which will sharply increase capital confiscation as increasing percentages of “gains” will reflect inflationary depreciation of the currency. In the U.S., an investor must pay tax on the difference between the sales price of an asset and it purchase price, with no adjustment for inflation. Consequently, when the tax rate and inflation are high, a large portion of the “capital gain” is illusory. Any asset that appreciates by less than the rate of inflation will result in its owner losing purchasing power and having to pay taxes on the illusory gains. At Obama’s higher tax rates, (he has suggested that capital gains and dividend taxes should be hiked to as much as 25%,) capital confiscation would result from modest levels of inflation.

And the Great Credit Crunch implies that inflation will be far higher than in recent experience.

Setting aside whether it is moral or equitable to force a small fraction of the population to essentially pay for the whole cost of government, much of which entails the shuffling of checks to purchase votes of various aggrieved groups, there is a bigger question. Can it be wise for the whole fiscal regime to stand on the shoulders of a small group, like a pyramid tottering on its point, so that any tribulation which undermines the prosperity of those who pay would promise to bankrupt the state?"

The Danger Lurking Behind Obama’s Tax Policy