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Barack Obama Says he Might Delay Rescinding Bush Tax Cuts Part 2

September 11, 2008

 Last week I wrote this post about Barack Obama already preparing to break one of his campaign promises. He claims that he may have to delay rescinding the Bush tax cuts. You know, those same cuts he claims were only for the “rich.”

 What I found astonishing about his revelation that he may have to delay raising taxes is that actually confessed that raising taxes hurts the economy.

 While reading the New Hampshire Union Leader I came across this editorial that sums up what I was trying to write, only a hell of a lot better than I could have.

 Here is the editorial reprinted in it’s entirety:

Sen. Barack Obama knows that tax increases harm the economy. So why does he still plan to raise taxes if he is elected President?

Obama plans to let a big portion of President Bush’s tax cuts of 2001 and 2003 expire. That in itself would be a monumental tax increase. It also would push the U.S. corporate tax rate — already the highest in the world — higher.

In addition, Obama proposes raising taxes on Americans who earn more than $250,000 a year (but in fact many people earning much less than that would see their marginal tax rates go up under Obama’s plan).

It would be one thing if Obama were merely wrong. If he thought that tax hikes helped economic growth, his tax-hiking scheme would still be harmful, but at least it would be innocently well-intentioned. But Obama knows better.

In an interview on ABC’s “This Week” on Sunday, Obama was asked whether he would still raise taxes if the economy were in a recession when he became President. He said he’d have to see.

“I think we’ve got to take a look and see where the economy is. I mean, the economy is weak right now. The news with Freddie Mac and Fannie Mae, I think, along with the unemployment numbers, indicates that we’re fragile.”

That is a clear acknowledgement that raising taxes would have a negative impact on economic growth. But for Obama, slowing the economy is OK if it’s growing, but possibly not OK if it is shrinking. That doesn’t make any sense.

Obama’s tax-the-rich rhetoric might sound great to low-and middle-income Americans who think Obama will take from the rich and give to them. But when the “rich” and “big corporations” don’t create millions of new jobs or give pay raises because of all the new taxes they’re paying, where will those struggling middle-Americans be?

Obama’s plan to tax the “rich” even more (the top 5 percent of income earners already pay 60 percent of all federal income taxes) would harm the economy, reduce job growth and send more investment overseas. The sad part is: Obama knows that his plan will have negative economic effects. But he’s pushing it anyway because populism wins votes, regardless of whether it’s actually good for America.

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One Comment leave one →
  1. September 13, 2008 8:16 pm

    The corporate tax rate comparable to other countries are somewhat misleading. The US is not the highest. One of the highest yes, but not the highest. And even then it is marginal compared to those around them – Japan, Germany, France, Canada etc. And the US do have more subsidies and tax breaks than most of their competitors.

    Also, on an individual level. Capital Gains Tax in the US is pretty middle of the road compared to others. But, apart from China and France who both have higher rates, the diffirence between low income and high income is not that wide.

    And the same goes for individual tax in general. At the high end – the US is still pretty middle of the road.

    The biggest difference is that you have low government (state or federal) tax on goods and services.

    I have lived in a few countries and have compared them to many others. And I can tell you that I pay a huge amount less tax than at any other place where I have lived or considered living. And I fall within the top 5% of earners. And live in Taxachusetts!

    Like

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