Thursday, September 20, 2007

Obama's Class Warfare

Check out this excellent editorial from the Las Vegas Review-Journal on Barack Obama's new tax proposal, released yesterday:

The tax platforms of the Democratic Party's leading presidential candidates can be summed up in two words: class warfare.

Illinois Sen. Barack Obama released the specifics on his redistributionist policies on Tuesday, proposing more than $80 billion in tax cuts for senior citizens and lower- and middle-class households and at least that much in tax increases on the upper-middle class, the affluent, investors of all means and corporations that employ millions of Americans.

"We need a tax code that's fair -- a tax code that rewards work and advances opportunity," Sen. Obama said in a speech unveiling his plan.

Sen. Obama would seem to be advocating a flat tax rate for all wage earners, or one that allows workers to keep an increasing share of their income as their skills and careers advance. That's not the case.

The focal point of his proposal is what he calls the "Making Work Pay" tax credit, which would cut $500 from the tax bills of lower-class and middle-class filers, but wouldn't be available to households earning at least $150,000 per year. So the home with two college-educated professionals, each grinding out 50-hour weeks at an annual salary of about $75,000 -- middle class by every definition -- wouldn't be entitled to the credit. This, to Sen. Obama, is "rewarding work" and "advancing opportunity."

Sen. Obama suggests allowing senior citizens who earn less than $50,000 per year to be exempt from all income taxes. He would also allow homeowners who don't itemize their tax returns to claim a tax credit -- not a deduction, but a tax credit -- equal to 10 percent of the year's mortgage interest payments. Sen. Obama proposes no similar credit for those who itemize their returns.

Meanwhile, he wants to the raise tax rate on the top income bracket from 35 percent to 39.6 percent, nearly double the tax rate on capital gains and dividends, and eliminate all tax breaks for the gas and oil industries and private equity firm managers.

Talk about a recipe for economic disaster. Taking tens of billions of dollars that would otherwise be invested and dumping them into the black hole of the federal treasury risks stunting job growth -- and the prosperity of the very people Sen. Obama wants to help.

Read the whole thing. The editorial goes on to highlight the perversities of the Democratic Party's tax policy ideology, and notes that currenty 40 percent of U.S. households pay 99 percent of all income taxes:

Sen. Obama and his rivals for the Democratic presidential nomination are prodding this dependent 60 percent, telling them how bad they've got it, and promising them more programs -- universal health care, help with their mortgage payments -- at no cost to the beneficiaries.

Of course, that's all "in fairness." Go figure!

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