If you read this blog, then you know that I’ve been talking a lot about what I think is a lot of low-caliber rhetoric coming from the campaigns in regard to economics. Obviously, the American people can only handle so much economic analysis (as can I), but I think this is an important time to consider sound economic policy and be critical of politicking.
Now, if you have been following this so far, you have learned that people who pay no income tax will get an income tax refund. You have also learned that this check will represent relief for the payroll taxes these people do pay. And you have been assured that this rebate check won’t actually come out of payroll taxes, lest we harm Social Security.
You have to admire the audacity. With one touch of the Obama magic, what otherwise would be described as taking money from Peter to pay Paul is now transformed into Paul’s tax relief. Where a tax cut for payroll taxes paid will not in fact come from payroll taxes. And where all these plans come together under the rhetorical umbrella of “Making Work Pay.”
The above quote comes from the Wall Street Journal today in an article called Obama Talks Nonsense on Tax Cuts. Either the WSJ is reading my blog or I’ve been right on. The article is worthy of reading the full text. One thing that I think is essential is transparency. I think that transparency is at the heart of the crisis we are experiencing now. Mortgages have been bundled up into securities and we can’t tell how much they’re worth. Obama’s tax plan has been bundled up in so many buzz words that we can’t tell what it is.
We’ve been hearing a lot about small businesses lately too:
Twelve Senate Democrats voted for those same tax cuts. And just to be clear on one point: An increase in “the demand for investment and labor” translates into an increase in J-O-B-S. So if lowering these tax rates creates jobs, then it stands to reason that raising these taxes will mean fewer jobs. From 2003 to 2007 with the lower tax rates in place, the U.S. economy added eight million jobs, or about 125,000 per month. The Small Business Administration says small business wrote the paychecks for up to 80% of new jobs in 2005, for example.
Joe the Plumber (JtP) and other generic analogies aside, we need to consider how taxes should look in America and how tax credits (pseudo-welfare plan) should look. I think this includes being honest about how the economy works and concepts of good governance. If the Democrats think rich people should pay more taxes, which they do, and I think is partially justified to subsidize the same opportunity America provided them to others. But it is important to accomplish it in a way that is philosophically coherent and economically sound.
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