Response to Jimmy and Obama Drains the Rich’s Pockets

August 25, 2008

This started as a comment in response to Jimmy’s comment but grew too larger. Here is what Jimmy said about my Post-ing (nifty pun).

The Washington Post never ceases to surprise me with their slanted presentation of the “facts” and their failure to address the real issues. They are always presenting these dumbed down quotes and pretty charts that are regurgitated by the media across the country as though they are words sent from above.

Are Americans that ignorant that they will vote on who is going to give the middle class a supposed tax break while they are indirectly taking it from behind with an actual tax increase as a result of higher inflation and increased government spending? Where do we think the govt is going to come up with the additional revenue to cover runaway spending. The other problem with this article is that they fail to mention what the net tax change is as a result of both candidates plans. The increase in taxes on the so called rich (who already pay a disproportionate amount of overall taxes) will not come close to covering the proposed taxes cuts on the middle class.

First here is Obama’s fiscal plan and here is McCain’s

I agree, the Post has been slanted left. But you know where it is coming from and, for the most part, doesn’t pretend to be fair and balanced.

Yes, I am, and most of America, is ignorant of the economics of our system of taxation and what it really means to their pocket book.

What I do know is that the current administration and its party had control of congress for 6 years all the while moaning of overspending that they passed and GW never vetoed. Then they trot out tax cuts, more supply side economic talk and promise the glory times to return. Add in the proclivity for less/no oversight to anything related to business and an energy policy that was non-existent we have a financial crisis on their watch, further ratcheting up a crazy deficit. Their answer again is more tax cuts.

Obama proposes a roll back to the Clinton era level of taxes, 35 to 39%. An increase in the capital gains tax from 15 to 20+% as well. Add in PAYGO rules and you might have a balanced budget.

McCain speaks of ending earmarks and waste but no specifics (actually just vetoes). Never mind that the Congressional Budget Office predicts that extended out, the Bush tax cuts further the deficit $1.8 trillion. But Obama is talking about trying the opposite of what has already not worked, paying for what you spend by increasing revenue, spend what you got only and not going deeper into debt [to the Chinese].

When we talk about the wealthy paying more than fair share, they also reap a significant more from the system than they pay. Account for wealth and their tax burden becomes less than the average citizen. For middle class, wealth is a safety net for retirement and hard times. The wealth gain leverage, access and power once they move well past that million dollar mark. And considering that wealth accrues more wealth and that the top 2 percent own 90% of the wealth, there are gains made that require the system to work for them in a greater disproportion than it does the middle class.

In other words, if you get more you pay more.

But lets not forget the tax advantages wealthy have in dodging their tax burden. That is another angle that those opposed to the increases forget. Example, Warren Buffet paying 17.7% while his secretary pays 30%. While this is an example of stocks being earnnings rather than income but only the wealthy can afford the cost of entry to that market place at the level that would allow for paying your mortgage. Million dollar salaries are often paired with stock options that reap similar rewards.Buffet has not been the only one in favor, before his latest darling episode with the right, Ben Stein called for increase in revenue. A rather hoghtful bit on the same topic from an economist, conservative  and someone smarter than me.

While it gets painted that this is punishing those that worked to get there, really it is saying that for an increase of 2 to 4% we can get our house in order. Once in order, economy managed smartly and investment made in our own economy, then the rewards can be gains of 10, 12 15%. That is for those at the top end, us at the lower half simply get to take a vacation with out selling off a child.

That being said, I would like the bracket moved higher to allow for greater small business profits to be saved. Small business is more nimble to add more jobs and can make a dent in salaries and job loss rates faster. They also tend to drive innovation in many areas, tech services and the like. Keeping profits will allow for investment in machinery, tools and other items. More back into the economy faster.

His capital gains tax has been quoted as 20 to 30%(?). 20% is fine in that it further slows the speculation of the market by bottom feeding investors that tend add more chaos than anything to the economy. It helps close the Buffet Loophole and takes takes out of system that doesn’t do any real work as in product and creates paper money that needs bailing out often. Real pros will have ways to offset that by profits from a calmer, more predictable market and other advantages to larger operations.

All said and done, this is a pretty ignorant argument and there are far better ones for and against. For me it is not the tax thing. I want government to help me make my life better. Call me a socialist. I also am weary of the saber-rattling and am more afraid of harm now than before. Russia looms large and struts magnificent. The Radicals in the middle east have way too much recruitment material and Iran is looking to prove that it is a big boy. We have lost almost all influence in South America because we have ignored it and treated its citizens not as equal players but as their goverments have treated them, pions. China nearly owns us. And our only friends, Europe only really like us because of a high Euro and we have Disney.

Obama offers a new voice for the world to hear us again, spread our influence in the same ways Reagan mastered the Cold War in media and perception rather than military conflict. Drive real world change and gather significant allies like Clinton. McCain is offering more of the same shit. Cow-towing to religious types, more of a failed economic strategy sprinkled with fear mongering and claims of big business will save us. I can’t take four more years of Bush Light.

I will leave you with one last thought. [via grow a brain by way of glass tumbler but really stolen from Greenberg]

Posted in election junk