Life’s Certainties
September 21st, 2007Death and taxes, right?
Believe it or not, Cook County — where Chicago lies — is thinking about a tax hike up to 11 percent. That’s a two percent increase. That is, to the average American, a huge deal, and I can’t say I like such a large increase on the sales tax. I prefer to support tax increases on certain things (cigarrette taxes) that are vice and voluntary, as opposed to a sales tax which hurts everyone from those shopping for pizza puffs to those staying in a Hotel room to those buying socks.
More important on the subject of taxes is Barack Obama’s pledge to cut taxes and raise them, something I understand in principle but which I take exception to.
Earlier this week, Obama announced a tax plan that would give $80 to $85 billion in tax cuts to America’s “workers, seniors and homeowners.” Under his plan, 150 million Americans would receive up to a $1,000 tax cut. It would also institute a universal homeowners’ tax credit that would benefit an estimate 10 million people and would eliminate income taxes for senior citizens making under $50,000 a year.
Obama plans to pay for this tax cut by closing corporate loopholes that allow American businesses to escape paying taxes by moving offices overseas and increasing the dividends and capital gains rate for the top bracket of earners. The senator has also suggested overturning the Bush tax cuts, but this money would be used to pay for his health care plan.
Sounds good? Until I read this, it did:
1) This will be very expensive 2) Some of it is a blatant giveaway to those who don’t need it; seniors already do *very* well out of the US government. 3) The tax simplification thing will not work. Most people itemize because they have to. It directly wars with his plan for a refundable mortgage credit. 4) The refundable tax credit for working families to “rebate” their tax credits is silly; they’re already rebated to the poor via the EITC. Expanding the EITC would make sense, but not this silly giveaway to the middle class. 5) The AARP may go nuts over the payroll tax refund; they hate any implication that it’s a tax, not a contribution. Presumably the lowered taxes on seniors are supposed to buy their support. 6) Overall, not a good plan. There are better, more economically efficient ways to achieve what he is proposing, and there’s not all that much money to be clawed back by repealing tax cuts on the over $250K set.
I think I concur. I’m open to any emails arguing against the plan, but it seems solid. It’s got a firmer grip on reality than Barack Obama seems to, not just because his tax plan isn’t all that great but also because he thought Oprah’s endorsement would be some sort of boost to him. It’s not, and that’s the long and short of it.