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Obama: Expensive Revolution

February 15, 2008

http://www.weeklystandard.com/weblogs/TWSFP/Obama-Surf.jpgThe excitement surrounding the Obama campaign is intoxicating.  The number of traditional Republicans considering Obama as a viable alternative to McCain is shocking.  The truth is, very few Republicans consider McCain to be a true Republican.  In Arizona, exit polls showed McCain won a majority of votes cast by Democrats over Starky (his Democrat opponent) in the last Senate race.

Obama is an appealing candidate.  I honestly believe electing an African American would send a message around the world that America truly is the greatest country in the world.  But at what cost?  If you have reviewed Obama’s tax plan you understand that it will be a VERY expensive message.  For those of you who are unfamiliar with the plan here it is (from WSJ):

39.6 percent personal income tax, 

52.2 percent combined income and payroll tax

28 percent capital-gains tax, 

39.6 percent dividends tax,

and a 55 percent estate tax.

If Obama gets his way I WILL change my behavior.  My businesses WILL change their behavior.  I am afraid that his tax policy will not only cost me more money on its face (something I could get over), but that it will severely impact the macro economy.  Lawrence Kudlow explains,

A President Obama would steer us in the social-market direction of Western Europe, which has produced only stagnant economies down through the years. It would be quite an irony. While newly emerging nations in Eastern Europe and Asia are lowering the tax penalties on capital — and reaping the economic rewards — Obama would raise them.

Russia has lit a fire under their economy, and don’t fool yourself that it is all about oil, Putin lowered tax rates to a flat 15% and as a result tax revenues have increased ten fold.  Get that?  RUSSIA implemented a flat tax before we did?  Kennedy figured this out (remember that rising tide lifts all boats commentary?) in the 60s when he lowered taxes.  Reagan figured this out in the 80s when he lowered taxes.  But here we are in 2008 considering a candidate that thinks taxing capital will increase revenues.  Um, capital formation is the only way we have been able to build these cool businesses that employ the cool people that pay the cool taxes we collect.  Screw up the capital side and the smartest most ambitious people on the planet won’t be able to fix anything.

My point?  I am not sure.  I would love to vote for Obama if he would simply agree to keep spending in line (i.e. he would agree not to increase it over current levels) and keep tax rates fixed.  I think it would he would be great for the U.S. and for the world at large.  If Obama agrees we can deliver the Republican votes he will need to win ~ McCain has given so much to this country, it is time for us to let him retire.  Don’t make him serve the last days of his life saving us from Obama’s misguided tax policy.

Written by Alexander Muse · Filed Under Blog, Politics 

Comments

6 Responses to “Obama: Expensive Revolution”

  1. Jason McMinn Says:
    February 17th, 2008 at 11:52 am

    I wish there was an ideal candidate to vote for. Some one that would get us out this bogus “war on terror” and leave taxes where they are. There is easier (and far cheaper) ways to fight the war on terror. To start, we could stop supporting Israel’s hostile land grab in the name of God in the West Bank and Gaza. The reason the “terrorists” hate us is because we stand for justice and the right thing only part of the time.

  2. Justin Says:
    February 21st, 2008 at 2:50 am

    The Obama tax article does not take into consideration the entire dynamics involved here. There is a bunch of “what ifs” we need to consider before passing judgment on Barack’s plan. Also, what George W. has created for us is a huge deficit due in part to this Iraq situation - I say give Barack a try, he certainly couldn’t be worse than the miniature dictator we have as president right now!

  3. Chuck Says:
    February 24th, 2008 at 7:28 am

    When President Clinton was in office our economy was great. Although it started going into a little slump at the end of his term in office, we still had a surplus.
    We now have voted a man into office, not once, but twice, who has caused our nation to fall into the largest debt in our history. Was it because we believed his “enticing”talk? Was it because we liked his free tax return checks he gave people to start the downward spiral of our national debt? Was it because of the “hype” he knew how to spread after 9/11? Who knows, but he sure has made a mess of things.
    President Clinton had the experience, wisdom, and know how, to get our country back on the right track after the first bush messed things up.
    Mrs Clinton was there from the start of her husbands administration. She was in the thick of things, making mistakes and strides, but all the while gaining experience and wisdom. She knows what changes need to take place.
    Obama has a little experience, but is it enough? Does he have the wisdom gained from years of experience? Does he have the know how to get this country out of the Global mess we are in?
    For some reason “smooth” talking people have always made me apprehensive.
    I am reminded of a “ hyped up” television evangelist when I see Obama on TV. Not that there is anything wrong with an evangelist, but aren’t they mostly about energetic talk to draw people in to their way of thinking?
    Saying the things people want to hear to make them feel better?
    Obama knows how to draw people in with his talk, but does that mean he can do what it will take? No it does not.
    Experience and wisdom from years of “being around the block a few times”are what we need..
    We put this current disaster of a president in office twice, lets think real hard before we replace him with another person who knows how to use “hype” and “enticing” talk. Is it a change we can believe in to be right?
    As a White, U.S. born male, I also have to wonder how many more “special” benefits minorities and foreigners
    will get if we put the wrong person in the highest office.
    If we want change, then there are 2 things we must do.
    1) Put the most qualified Democrat ( Clinton) in the highest seat in the land.
    2) Vote in enough Democrats to have the majority in the House and Senate to get things done.

  4. Jim Phillips Says:
    February 25th, 2008 at 9:57 am

    Do you have a link to that WSJ article?

  5. John Whiteside Says:
    March 5th, 2008 at 11:39 am

    The tax rates proposed by Obama (& Clinton) most closely resemble those that Reagan put into place. That this is considered extreme is a really just an indication of the fiscal irresponsibility of the last few years.

  6. Franklin Says:
    June 30th, 2008 at 4:44 pm

    I’m an old fashioned conservative. I think deficit spending - passing debt onto the next generation- is immoral, except in the event of an emergency. It is time Americans started acting like grownups and realized that spending requires that choices be made. George W. Bush is the first president to cut taxes in middle of a war. We have been borrowing hundreds of billions of dollars from the Chinese, Japanese, and the surplus in the social Security Trust Fund, every penny of which cane from FICA taxes on workers wages earmarked for their retirement. In recent years, 25% of non social security Federal Spending has been paid for with borrowed money. The the true size of the deficit has been masked, because politicians of both parties prefer to ignore borrowing from Social Security Trust Fund - as if the excess FICA taxes were free money that could be borrowed and never paid back.

    Meanwhile the Chinese consume only about half of what they produce. The excess is invested mostly in foreign currencies, primarily U.S. dollar treasury bills. - Eventually they will own us.

    Imagine the uproar in the U.S. if a politician decided that we should run the Federal Budget at surplus of 100 to 200 billion dollars per year, consume only half of what we produce, and invest the surplus in Chinese bonds.

    My solution to the problem would be to roll back every tax cut for the rich since president Reagan, until the country was on a firm financial basis. - The country did fine with a 20% or even a 28% maximum capital gains rate. Warren Buffet has said that his average federal tax rate is about 18%. Meanwhile, middle class workers pay Federal Income tax at a marginal rate of about 28%, plus social security and medicare taxes (including the employer’s contribution) of 15.3%

    To those who say taxes should not be raised during a recession, I would say that my consumer confidence is low because of run away deficit spending.

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