Sunday, October 19, 2008

Obama's tax plan

The Republicans are truly regressing. First Obama was a terrorist, then he was a lib-e-ral, and apparently now he's a communist. If we regress any further into the past they're going to have to claim he's a southern gentleman who wants to bring back slavery. That might be a tough sell. Maybe they can go back even further and call him a Redcoat sympathizer. He's always palling around with British monarchs and whatnot.

It always comes back to taxes with them. Specifically taxes for the rich although for PR purposes they sell it as "tax breaks for small business owners" since that's a viable populist spin on things. If they ran on a platform of "tax breaks for the rich" they probably wouldn't get many votes so they throw you a couple hundred dollars which you promptly blow on nothing. (most likely sending a good percentage of those dollars to other countries who actually produce the items you're buying)

Anyway... The truth about business taxes are, on paper, they are quite high. Why is that? Because there probably isn't a single company that actually pays 35% taxes. The tax rate has gone up over the years because the companies have found new and better ways to avoid paying taxes. Some legal, some not. We just want them to pay their fair share.

Under US law corporations have most of the rights of an individual. As an individual, if I had the money for a really good tax man, I could probably skip out on paying most of my taxes too. The problem is, for me, it makes no sense to try to skirt around the tax code because I'd have to pay someone a lot of money to do it for me. More money than I would save. So I just accept it and pay my fair share based on whatever the IRS tells me I have to pay. A large company on the other hand can hire a whole team of tax experts, skip out on paying their fair share, and save tons of money in the process. Is that fair? I don't think so. I don't think most normal Americans who aren't rich would think it's fair either.

McCain cited some fact that we have one of the highest business tax rates in the world. Technically it's true but in reality the amount of our GDP that goes to taxes is far lower than the countries he's comparing us to. Obama's plan raises the paper rate on businesses slightly and you know what? They won't pay most of it anyway but if every business pays 1% more that's quite a lot of money. (of course you have to ask for 5% on paper to get 1% in reality) The Republicans like to say this is "redistribution of wealth" however they happily take advantage of this country and its resources. Why is it unreasonable to ask them to carry their weight?

It's not like these US companies aren't getting something out of the deal. The US government does a lot of work for business -- trade negotiations for example. Just look at NAFTA, the trade in-balance with China, the government's casual support of human rights when dealing with countries we do business with, etc, etc, etc. We waged a war in Iraq to make sure their precious 18-wheelers can stay full.

Intellectual property law? We have this giant infrastructure of red tape to protect these companies. It's a cabinet level position now. Our law enforcement agencies have to deal with it everyday. Our judicial system has to deal with it. Think about how much money is spent every year on protecting IP. Who pays for it? ME? Why? I don't care. I don't have any IP to protect.

There are countless other examples but in an effort to stay on topic I won't get into it.

So why shouldn't they pay their taxes like I have to? I'm willing to bet the typical company gets more special treatment and benefits from the government than I do.

McCain was really hot for the "redistribution of wealth" thing in the last debate. It's true too. The rich have got richer and the poor have got poorer. That is an indisputable fact. Why is that? Did the middle-class suddenly stop working hard? Did a bunch of people quit their jobs? No. What happened was big business pushed them harder and harder so they could make more money and, incidentally, not pay their proportion of taxes on it. It's a correction, not an increase. The poor & middle-class have been carrying their weight the whole time. We grumble about it but we do it because we think it's dishonest to skip out on the bill. It's like going to a restaurant with your friends and everyone orders the most expensive thing on the menu but when the check comes they're pissed off. The Republicans knew they were spending more than we could afford. Now they're pissed off we want to pay for it. It's the most irresponsible thing I've ever seen.

And, let the record show, we wouldn't need a tax correction if we didn't have 8 years of unprecedented spending by the Republican party while they cut taxes at the same time. It's just basic kitchen table math. If a family spends more than they earn it will eventually catch up with them. The mortgage crisis is just a nice little miniature version of what this country has been doing for the last 30 years (with a brief 8 year interval where Clinton created budget surpluses)

The next time a Republican suggests the Obama plan is socialism or communism I wish someone would stop them and tell them the truth. McCain's plan puts us closer to socialism than Obama's does. McCain's plan just pushes the poor & middle-class further down to help big business while big business gets richer.

When the gap between the poor & rich becomes so great that the poor no longer have any incentive to be productive, law abiding, citizens you are creating an environment ripe for revolution. We were at that point in the 30s. We'll be there again if McCain somehow wins this election. If any of these Republicans think Obama is a socialist they're in for a shock when they see what will happen down the road if we continue these trickle down policies. Obama will look like William F Buckley compared to the revolution they will create down the road.

The Republicans just need to accept this as a correction. Eventually the Republicans will get back into power and continue their policies. It's healthy for the country to have this cycle of pro-business, pro-labour. The cycle has been thrown off in the last 30 years and we're suffering because of it.

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