Obama has announced his vision for a new payroll tax on those top 3% of Americans making $250,000 or more. Currently, social security payroll tax applies only to those making below $102,000.
According to Mr. Obama
it is unfair for middle-class earners to pay the Social Security tax “on every dime they make,” while millionaires and billionaires pay it on only “a very small percentage of their income.”
Obama would eliminate the taxes for those making under $102,000 and tax everyone who made over $250,000. McCain has called Obama a tax-and-spend liberal, and this plan has only made that appear more true.
However, a poll by NBC and the Wall Street Journal put him ahead of McCain by 47 percent to 41 percent among registered voters, which is a pretty hefty lead by anyone’s standards.
McCain and other Republican leaders call the notion frivolous and absurd, especially during a time of recession and economic struggle.
I think it’s a tough call. As a citizen making under $102,000 a year, I like the idea of paying fewer taxes. And, if the tax increase is really only on the top 3% of Americans, that’s really not too many people getting taxed. In fact, far fewer people would be paying taxes for social security. A few would just be footing the bill for everyone else.
“Both John McCain and I favor tax cuts,” Obama said. “No matter what he says, both of us favor tax cuts. The difference is that Senator McCain wants to continue the Bush tax code that rewards wealth and I want to reform our tax code so it rewards work.”
I must admit, I find myself very conflicted. I’m not big on taxes, but I don’t think the majority of tax relief should go to the wealthy either. I’d like to see tax relief at all levels, especially for small business, middle-class incomes, and for investments. I’d like to see bigger tax breaks for innovators and home-buyers, and for those brave consumers adopting new green technologies. I would also like to see tax relief for new urbanism projects, and alternative transportation. I think the way taxes can be used to boost our economy is by giving tax relief where new businesses can blossom, and giving tax relief to the average consumer–i.e. the middle-class consumer.
So in this respect, perhaps Obama is a bit more progressive in his taxation plan than McCain. I think we really need to simplify the filing process, which Obama has promised to change.
In so many ways I find myself leaning toward an Obama presidency. On social issues we mesh much closer. I am pro-gay-rights, pro-immigration (though McCain is strong on this as well) and not really worried about more taxes on the rich, so long as tax relief does reach most Americans.
It’s on National Security that I find myself concerned. If Joe Lieberman were whispering in Obama’s ear instead of McCain’s I might feel better. If there were assurances that Patreus would stay in his current position under Obama, that would be welcome news. If I didn’t feel that Obama pandered to the anti-war crowd so much, that would be a comfort.
On Israel, Obama is as murky as ever. The ties to anti-Semitic Reverend Wright are deeply disturbing to me.
Then, too, I’m highly skeptical of nationalized healthcare. I don’t think it’s very practical. I think it needs to be tackled in tiny pieces (baby-steps, if you will) rather than all at once as many on the Left propose.
So, Obama, to convince a Centrist like me you’ll need to prove you can be tough on terror and strong on defense, moderate on social spending and taxation, and pro-Israel to a fault. Then I might, just might, consider supporting you….
Sources:
1] Reuters Obama fights McCain over taxes
2] The Associated Press Obama wants payroll tax on incomes above $250,000
3] CNN Obama tax plan: $80 billion in cuts, five-minute filings
Ian Kristofer is a writer and commentator who considers himself to be a left-of-center neoconservative.
on Jun 14th, 2008 at 6:10 pm
The majority of tax relief should go to those who pay taxes. The top 50% of Americans pay 96% of the taxes in this country. The bottom 50% (65 million taxpayers) paid a total of $27.4 billion in taxes but made a total of $922 billion in income, for a total tax rate of 3%. It can’t get much lower than that.
You want to raise taxes on the rich? Fine, but just know that the unemployment rate in this country will go up if you do that. There are a huge number of small business owners that file their taxes under a Schedule C, which means that they are recognized as an individual. Obama wants to raise taxes on the “rich” meaning anyone who makes over $200K per year.
If you raise the income tax on someone who makes $200K per year from 35% to 39%, then they have $8000 less. For someone who makes $300K, they have $12,000 less. $400K then $16,000 less. Those dollar amounts will result in those small business owners laying off part time employees, summer workers, holiday workers, etc.
This tax increase will not result in more money in the treasury. In one of his last debates, Obama said that raising taxes was about fairness, not more money for the government.
So let me ask you, what are taxes for? For the government to enact “fairness” or to raise money for necessary means? Obama seems to feel that the government’s role is to regulate fairness in this country.
As for the small business owner who has his tax rate raised from 35% to 39%, you will see an increase in the unemployment rate. They’ll just lay off those workers that aren’t necessary in order to maintain the same profit margin. Either that or they’ll raise prices, neither of which is good for the economy.
Liberal/progressive economic policy always ends up hurting those who it is intended to help. An increase in tax on companies (especially big oil) hurts the middle class and the poor the most. An increase in tax on the “rich” just leads to more unemployment. An increase in the minimum wage leads to less money for small businesses to hire more people and thus higher unemployment.
Obama’s economic policy is eerily similar to Jimmy Carter’s. If you want to see how 4 years would be economically under Obama, just look back to Carter’s term and you’ll get a general idea.
on Jun 14th, 2008 at 7:58 pm
Excellent points, Conservemus. I couldn’t agree more. Taxes serve a basic purpose–to raise necessary funds. Funds not liable to be eaten by taxation serve a basic purpose as well: to contribute to the economy, to jobs, etc.
on Jun 14th, 2008 at 8:05 pm
Yeah, bring up Jimmy Carter. I’d call it a cheap shot, but it’s true–Obama is “eerily” similar to Carter, and another Carter administration is the last thing this country needs.
on Jun 14th, 2008 at 8:24 pm
Ditto to both of you. One last thing. Any tax cut can always be spun as a “tax cut for the rich”. If someone making a million a year is in a 40% bracket and their taxes are cut to 38%, then they have $20,000 more per year. If someone making $60,000 a year is in a 25% bracket and they have their tax rate cut to 0%, they have $15,000 more per year.
So, even though the big earner only got 2% back and the middle class person got 25% back, it could still be spun as a “tax cut for the rich” because the bigger earner got more money back. However, it obviously benefits the middle class person more. So normally guys like Chuck Schumer who spout the “tax cut for the rich” lines are just playing politics.
When cutting taxes, those who pay the most should get the most back. Enough of this wealth envy stuff. In an economy like this, cutting taxes for everyone benefits everyone. If we’re always sticking it to the super rich, they hire fewer people and buy fewer yachts/clothes/jewelry/cars, etc. Those purchases stimulate the economy and ultimately help the rest of us.