Posted on 09/24/2007 5:59:10 AM PDT by John Galt 72
Obama’s Tax Proposals Beg the Question: Is He a Liar, or Just Ignorant?
By Matt Carrothers
September 24, 2007
Presidential candidate Sen. Barack Obama (D-IL) recently issued two bizarre proposals to amend the income tax code and Social Security program. These proposals seriously call into question Obama’s intellectual gravitas. To paraphrase Shakespeare – and Michael Stipe – Obama’s plans are but an idiot’s dream, already proven ineffective and disastrous to the U.S. economy, but nonetheless delivered with a sound and fury intended to impress his likely voter base.
Obama rolled out his income tax plans last week in a speech at the Tax Policy Center, an outfit whose policy is “We like taxes. A lot.” The Obama tax plan is chock full of what he calls “tax cuts” for the middle class, homeowners and the elderly.
First, Obama would “reward work” with a $500-per-person or $1,000-per-family personal exemption to offset a portion of their payroll taxes. The senator argues that 150 million Americans will benefit from this so-called tax cut.
Second, the plan would reclassify the itemized mortgage interest deduction as a universal tax credit available to every homeowner. Obama’s rationale is that the third of homeowners actually taking the mortgage interest deduction must necessarily be wealthy. The universal mortgage interest credit would pay 10 million homeowners approximately $500 each year.
Third, Obama says, “I’ll give retired folks the same kind of relief I’ll offer to working people.” The Obama plan would eliminate all income tax liability for about 7 million elderly retirees earning less than $50,000 a year.
Finally, Obama wants to simplify the tax filing process not by eliminating volumes from the tax code, but by having the federal government figure the tax liability for 40 million Americans who have a job, a bank account and take the standard deduction.
Obama concluded the outline of his new tax plan by declaring, “All of these proposals are about making America’s tax code simpler, and by making it work better for working Americans.”
I will set aside the easy arguments for why every American and the national economy benefits from low tax rates. A properly taught grade school child can grasp the process and outputs of supply-side economics. The important point to take from the Obama tax plan is that it offers absolutely zero real reductions in tax rates. Obama’s proposals are merely transfer payments renamed “tax credits,” sold to the gullible and the socialist with reams of class-baiting rhetoric.
It is an undisputable fact that the wealthiest Americans do not benefit from the current income tax code. Thirty-eight percent of all total U.S. households currently incur zero income tax liability, so a wealthy few are already paying the vast majority of income taxes. According to the Tax Foundation, the top half of all taxpayers, households making $47,500 and above, currently pay over 96 percent of the nation’s tax bill – and that number is growing. The number of households that pay no income taxes has increased 50 percent since 2000.
Obama’s plan does not simplify the tax code at all. It only shifts the tax burden to fewer and fewer Americans.
Obama’s plan to fix Social Security, like his tax code changes, is similarly devoid of either imagination or genuine ability to improve the program. As president, Obama would simply propose elimination of the payroll tax cap, subjecting all earnings to the already onerous payroll taxes. Of course, Obama will also fight efforts to “privatize” Social Security, since privatization “tears at the fabric of Social Security – the idea of mutual responsibility.”
In case you choose to not believe the annual Social Security Trustees reports, Obama feels your pain. He writes, “Some have argued that the problems are severe and that Social Security is fundamentally broken. This is an exaggeration. The underlying system is sound and the actual problem, a projected cash shortfall over the next 75 years, is relatively small and can be readily solved.” As anyone who can read knows, the projected cash shortfall begins in 2017, not 2082. In 2017 the Social Security Administration will pay out more in benefits that the Treasury will receive in payroll taxes.
The maladies Obama cited last week – an unfair, complex tax code and shortfalls in the Social Security program – are directly and irrefutably caused by his party’s policies. Democrats fight every attempt by conservatives to simplify the tax code by eliminating brackets or income taxes altogether. Liberals engage in social engineering by redistributing income through countless tax credits. Any attempt to alter the flawed Social Security scheme is characterized as hastening Armageddon.
Yet millions of voters, fantastically ignorant of history of the most basic of economic principles and devoid by their own choice of any formal educational training, will nonetheless cast ballots for this man, or John Edwards, or Hillary Clinton.
Barack Obama is either the most ignorant member of Congress or its most ardent liar. Neither character flaw is suited for the Oval Office.
© 2007 North Star Writers Group. May not be republished without permission.
How about both?
Obama ain’t no ignant.
I question anyone who ever thought Obama had any intellectual gravitas.
This is the key to it all.
>> How about both?
You beat me to it.
Ignorance and dishonesty are not mutually exclusive!
As evidence for my position, I give you... the Demo-rat Party.
Ignorant liar...
He's a Democrat.
Yeah!!! Free Money for everyone! I want mine now and if I don’t get it I’m gonna hold my breath ...
A home mortgage deduction for the homeless ?
Before “reforming” Social Security, the politicians in Washington should first mandate that they themselves participate in it.
He’s clean. Does that count?
He is a lying steaming sack of badger crap. He is a pure socialist who wants to take what you have earned and give it to someone, through some commie program, who refuses to make an honest living on their own. Redistribution plain and simple.
We have to stand up and say no because this is what Hillary will do and what Edwards would do............all the theives are lining up.
yes....
He’s an empty suit who talks because he like the sound of his own voice.
Neat and simple, in the short run.In the long run (by which I do not mean centuries, nor decades, nor years - but months at the outside, perhaps weeks) people will react to the increase in the number of dollars by demanding more dollars for the same goods. This will require the government to accelerate its production of dollars, leading the people to accelerate their demand for payment and accelerate their spending in order to not hold a depreciating currency that was worth a loaf of bread when earned but will only be worth one slice of bread if held for a week.
The fallacy of the Phillips Curve theory of a tradeoff between inflation and employment lies in the fact that people respond not only to the number of dollars they are getting but the number of dollars everyone else is getting. The result of which is not merely constant inflation, nor even a constant rate of increase in inflation - the result is accelerating rate of increase in inflation which, in the case of no taxation at all and unchanged governmental spending as a percent of GDP, results in the collapse of the economy in a matter of months or perhaps a year. The economic collapse occurs because, even as the dollar supply diverges exponentially, the money supply collapses because the dollar ceases to be money at all.
And the government itself loses all credibility along with its currency. But hey - "Other than that, Mrs. Lincoln, how was the play?"
I was being facetious, of course. The hard truth is that someday the government will have to crank up the printing presses to pay interest on the debt and also to redeem the “Baby Boomer” Social Security IOU’s that the Treasury issued for surplus FICA taxes collected and immediately spent by those horrid congressional mealy mouths.
He’s a liar, of course, but he’s simply pandering to the rat “base” of parasites who don’t care about truth or anything else except “free” stuff.
The only good news on the SSTF front is that the tax liability of the IRAs of Retirement Boomers constitutes a significant savings pool toward the redemption of the "Trust Fund" IOUs . . . which becomes a major incentive for the government to make sure that the IRAs of the Boomers prosper.
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