Obama vs. McCain on taxes

By MICHAEL HALEY

The world is changing along the lines of a liberal vision, with conservatives pulling hard to stop it but unable to do so, merely providing a braking action as the coming liberal vision of the world keeps skidding forward.

Denser housing, mass transit, gas prices higher, then gasoline eliminated altogether, the economy being reduced to serve environmental goals, government control expanded to control more and more aspects of our lives, these are all part of a liberal vision, all coming on stronger and stronger.

Obama’s tax plan takes us a quantum leap forward in that direction, while McCain’s maintains a status quo that is breaking the bank.

It is clear that Obama’s plans on the whole shift more and more of the burden of taxes onto the top 50 percent of wage earners, dramatically so on the top 10 percent, and provide more and more benefits and outright cash for those below the 50 percent mark who have children.

The battle over the competing tax plans is vastly confused by the fact that neither candidate truly has a definitive plan yet. They have one thing on their Web sites, say other things on the stump, then when reporters call the campaigns give yet a third version.

Having said that, one does definitely discern the outlines of a different approach between the two. In my view, there are serious problems with each one.

McCain will essentially make permanent the Bush tax cuts that are due to expire. His plan overall gives more money to the wealthy, because his plan either maintains or cuts taxes, and since the wealthy are paying almost all the taxes, they are the ones who get the cuts.

The problem with that is that it makes whopping increases in the deficits, national debt, and does not solve social security or any other financial problem. The taxpolicycenter.org, which has a report that many are using to evaluate the proposals, states McCain’s plan will result in $4.2 trillion dollars in reduced tax revenue over 10 years, assuming the Iraq war ends soon. That means continued huge deficits and borrowing which is irresponsible.

Obama, on the other hand, claims his tax plan will actually reduce taxes overall. Whether that is true or not, what he is really doing is taking from the rich and mostly giving to the not so rich, the middle class. How he defines rich is someone making $125,000 a year. Those making more than that will find their income in California taxed more than 50 percent if the states Democrats have their way.

If he just raised the income tax top rate back up from 35 percent to 39.5 percent, on income over $250,000 as it was under Clinton, that would be one thing. But when you add 6.2 percent in payroll tax, and raise capital gains taxes to 25 percent, tax interest as ordinary income, and phase out the personal deduction it really starts to add up. Then here comes California with a new 11.5 percent rate.

It will hurt the economy, no matter how you slice it. And it opens him to the charge of socialist engineering. It is hard not to think that what he is really doing is carrying out the anger of the far left against the wealthy into his tax policies, not doing what is good for the country. All these new taxes, yet they will really not solve many problems, like Medicare or health care. Why bother then?

My point of view: Make taxes go up a bit for everyone, and slash spending big time. I think everyone who works should have to at least pay some taxes, and that it is morally wrong to have half the country paying the way for the other half. That will never work, and it is welfare.

It also contributes to a sense that those not paying in the bottom half of wage earners are entitled, they are owed by others in an unhealthy way. They also don’t have a financial stake in the system; in fact their stake is to get even more without doing anything except demand government largess. Everyone should have to contribute to the shared benefit of government services, so this whole thing about seeing how low you can make middle class taxes is a mistake; it sends people the wrong message.

We all share in the benefits of government, and each should do their part, even if it is a small part. This idea that the rich should subsidize the middle class, a $50,000 annual income and you are getting subsidies from the wealthy to have kids? Wrong.

We have to stop running up debt, how long can we expect China and the rest of the world to pay our way? How long can we avoid the fact that we are continually spending more than we have? Those same children who are the reason that their parents are getting cash back in taxes for their parents are going to have to pay for all that when they grow up. Is that fair?

At least McCain’s plan will stimulate growth. Obama’s will hurt economic growth, and at this point the only thing that looks like it is going to get us out of our quagmire of debt and government handouts is a lot of growth.

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