So let’s say that we were undergoing the most difficult economic period in the last 20 years and that we have spent trillions in taxpayer dollars to help save the financial sector form collapse, what would be the best course of action with respect to taxation? Well, since economic activity is at all time lows, unemployment is approaching ten percent, the major stock market indices are still at low levels, and we have endured consecutive quarters of economic contraction, it would seem that the common sense approach to taxes and government intervention would be to incentivize productivity, incentivize participation in the market, incentivize consumption, and incentivize small business growth. Absolutely not, says Obama and the Democratic Party. Here’s a breakdown between what we need, in terms of tax policy, and what Obama is proposing:

What we need vs Obama Plan

Increase Investments vs. 33% higher capital gains taxes

Strengthen Entrepreneurial Activity vs. Redistribution of wealth (higher taxes for successful small businesses and higher income Americans, tax decrease/credits for lower income Americans)

Increase Consumption vs. Increase taxes on energy products: higher taxes on
oil related goods and higher costs on electricity and tax cuts for those making less than $95,000/year

So what we see is that Obama has undertaken a plan that redistributes wealth instead of stimulating productivity. Higher taxes on market participation will only make it harder to recover. Higher taxes on small businesses will be passed on to both the consumer in the form of higher prices and to the employee in the form of layoffs, especially at a time of little consumption. While the Obama plan does include some tax cuts for those making under $95,000, the plan also includes an across the board tax hike on petroleum related products and on electricity, how much it will reduce or increase America’s discretionary spending is yet to be seen. Though even now, Democrats worried about increasing deficits under the Obama budget are proposing to eliminate the tax cuts altogether, resulting in a tax increase for all Americans. I guess the liberal philosophy is to redistribute wealth, punish small business growth, and increase the cost of living through inflation and taxing energy consumption in order to get out of this recession. I don’t agree… its convenient though that most Americans will probably forget that Obama promised “middle class” tax cuts for those making under $200,000 a year and has now reduced it to $95,000 a year. If it continues at this rate, the definition of middle class under an Obama plan will only include people living on welfare. The American people cannot let this war on productivity go unchecked and, at the very least, Democrats should be holding the administration accountable for what they promised to the nation. Responsible Americans should stand for the taxation necessary to fund the programs we need and a tax structure that is not overly punitive on the more productive members of society and those who provide jobs. If the Republicans are going to rebuild their party they should become not merely the party of business, but the party of productivity and the party of jobs. Otherwise, America’s days a the lone superpower may be numbered.

-AG

Maybe McCain had a point…

Even Fox seems pretty fair and balanced on this one…