WAKE UP STUPID (9-6-08)

It's still the economy, stupid!!!


With the presidential election only a few more weeks away, I find myself increasingly concerned that the people of this country will be ill informed to choose the best way forward. It's not a popularity contest or really a question of whether your experienced or promise change. It's the economy stupid!! The question of how the economy is dealt with is the issue that really matters more than any other. Discussion of the economy will bleed over into national security and international relations issues for sure, but how our taxes are collected and how federal spending is managed, has been, and will always be, the kitchen table issue that the electorate is most likely to vote on. And rightly so. Americans, like it or not, have a "What's in it for me" attitude.
Anyone who is familiar with my writings probably knows that I, first and foremost, believe in equal rights under our tax codes. I believe any tax paid by the least of us, should be matched by the best of us. And nothing more. If any type of progressive tax is issued to the rich, it should only be applied to the money they make over and above the low and middle classes. For instance. Lets say people making 20k or less are not taxed. Equal rights would then say the rich should not be taxed on their first 20K either. If people making up to 60k are taxed at 20%, and the people making up to 120K are taxed at 25%. Then the rich pay nothing on their first 20K, pay 20% on the next 40K and pay 25% on the next 60K. If you want to soak the rich with 35% above 125K, you can, but they must be treated as equal citizens on the way there.
That be said, lets look into the real nuts and bolts of both sides of this important issue. Barack Obama has claimed he is for tax cuts that will reach 95% of Americans. Clinton promised something similar in the 90's and changed his mind after getting elected. Forget the fact that only 70% of Americans even pay income taxes for a minute and think about what he's trying to do. Barack is attempting to bring relief to the lower to middle class of America on the backs of the people making above 250K. "Soak the rich" should be his campaigns theme. While this income redistribution sounds good to the people who will receive the benefit, someone should tell them that they would be selling their country further into socialism if this were allowed to occur. This plan would further the progressive taxation policy away from equal rights and make the upper class (Top 10%) more than 95% responsible for funding our countries spending. At least 75% of these people making over 250K are our small business owners. Small businesses have been roughly 50% of our nations economic output in the last ten years and have created 60% of the new jobs over that same period. To further tax these businesses would cause them to either increase the cost of their products and services or cut expenses through slower wage growth, wage reduction or job elimination. This type of attack on small businesses would reduce their chances of growth and increase their chances of failure. Having been employed by several small businesses, I fail to see what good a lower income tax will do for me when I no longer have a job.
Now, Obama has said that 95% of Americans will get tax relief. But reading the fine print you find it's not a rate cut, but a refund check. Little more than 2/3 of the people receiving this "refund" actually pay taxes, making his plan the largest welfare expansion in our nations history. You just can't claim it a tax cut, or even a tax refund, if those receiving the checks never paid an income tax in the first place. Now, some of these checks truly are tax refunds, but nearly 1/3 of it is socialist welfare gone wild.
This plan will not only cause great and harmful economic repercussions, but social ones as well. This would give the rich an absolute right to claim more "ownership" of our society because they will have paid for it. Barack is selling the lower to middle class a plan that would give them less claim to be an American citizen of equal standing. Personally, as a "middle class citizen", I am sick and tired of class warfare every four years and want all citizens to play by the same rules. I believe the terms describing the economic classes are needed to have conversations relating to the wants and needs of the people with differing incomes. I don't believe these terms should form dividing lines causing hate or anger within communities and neighborhoods. Obama, if given a chance, will give new meaning to middle and lower classes. Causing them to be perceived as 2nd and 3rd class citizens because they are either getting a free ride in this society or leaching off of it.
John McCain, at least in part, gets it. Continued income and capital gains tax cuts passed during the Bush administration along with ending the alternative minimum tax and instituting a long overdue corporate tax cut. His plan does fail to bring equal rights to the tax code, but at least he does no further harm. The Bush tax cuts, no matter what they try to tell you, have been a great success. Were it not for 911, corporate fraud, Katrina, world energy markets, the mortgage crisis, and congressional spending run amok, the cuts probably would have totally paid for themselves as promised. Bush failed to force congress to make spending cuts, and, actually signed legislation that increased spending. This resulted in making his tax policy look ill conceived and foolish. His tax cuts kept us afloat through some tough times, but the lack of conservative spending restraint doomed him in the eyes of republicans and Americans as a whole. In fact, the tax cuts were some of the same genius made in the Reagan years. They were large, bold, and pro-growth measures badly needed after a false dot.com economic wave came crashing down. John McCain agrees with pro-growth tax cuts and wants to do more. But not with the income tax. It's our corporate tax that most urgently needs a correction. John knows our country currently has the second largest tax rate on corporations in the world. He knows lowering their tax rate will prevent a good deal of businesses from outsourcing your job or moving their entire operations overseas. John knows if corporations stay here, further unemployment due to a poor business climate, will be prevented. Obama does not seem to have any concern for American business at all. His campaign portrays him as a "man of the people" who wants tax relief only for American workers. John sees no point in further individual income tax relief if it's done at the cost of more American jobs moving away.
Yeah John gets it!, but not fully. What John needs to realize is that businesses don't really pay taxes. All business taxes, since the first day they were imposed, were just further taxes of American income. Their nothing more than federal taxes hidden in the spread sheets of thousands of businesses coast to coast. The business tax has been, and will continue to be, treated as nothing more than a business expense figured into every American product and service sold. It's this additional cost that has contributed to our products being priced out of the market. Business taxes shouldn't be cut, they should be abolished and replaced with a more up front and honest tax. Killing the corporate tax and replacing it with a 10% sales tax would do more for this countries ability to compete than anything else ever done by government. It would lower prices of American products exported and allow them a better chance of selling. It would increase costs on foreign products and, again, allow the American competitors brand a better chance of selling. It's a better plan than Johns, but it's time has not yet come. John understands that this economy will not gain momentum unless and until we (and by we I mean American businesses) are playing on an at least closer-to-level playing field with the rest of the world. High corporate taxes are not the only reason for businesses moving over seas. But we can't abolish our unions or lower our wages and standard of living to compete for every corporation in the world. Lets just face the fact that some businesses are better off somewhere other than here. But when we are in the hunt for a business locating here, and were a real consideration, our government shouldn't even be in the equation.