Obama's Tax Plan: Worse Than He Could Have Imagined

We've been hearing a lot about Obama's tax plan, and how he intends on restoring the middle class through tax breaks for them and tax hikes for the rich.  Well, most people have jumped on that bandwagon, thinking it's the greatest thing since Laura Bush or something.  It's not.  LB is still the greatest thing.  And there are a few myths that need to be dispelled.

Myth #1:  Obama's Tax Plan Will Be Good For Business

FALSE!  It absolutely will not.  Why?  Because it targets the businesses directly.  Obama's tax plan runs on the idea that "with more money, the middle class will buy more, thus boosting business and the economy"...the same idea that the government's economic stimulus checks run on.  Is this true?  Not really. 

Here's the rundown.  Obama's tax plan will gives tax credits (discussed later) to everyone that makes less than $250,000 a year.  Sounds great for the middle class, right?  Hold your horses, it's not.  Who makes more than $250,000?  Doctors, Lawyers, etc.  but most notably, Small Business Entrepreneurs.   Yea, entrepreneurs make more than $250,000 (the successful ones, at least).  So how does this tax plan affect them, if it's everyone below them that gets this credit?  Well, it means increased taxes for them to fund the Obama Government's pet projects.  What will these small business owners do with higher taxes?  Cut jobs.  Entrepreneurs are the leading creator of jobs in the United States (duh), but if they have to carry the middle class' weight via higher taxes (when over 30% of the nation already doesn't have a tax obligation), they will have to make up for that money through higher prices and creating less jobs.

So tell me, how does that help the economy?  Sure, the middle class gets tax breaks, but that extra coin is going to be spent buying the same products as before, but at higher prices because the business needs to meet a higher tax requirement.  And how about middle class jobs?  People won't be much help to the economy if they are unemployed, which is inevitable with this tax plan.  Unemployment is high enough, we don't need to coax it higher.

Myth #2:  It's A Tax Break!

Think again, darling.  It's not so much a tax break as it is "tax credits".  What does that mean?  it means money back in your pocket, but only in certain scenarios.  Which scenarios?  It really depends on how the government administers it.  In other countries, tax credits are given to people who work, as well as working couples, people who send their children through school, homeowners, the elderly, etc.  Many of which are covered in Obama's plan, no worries.

It's true, a lot of people would get credit from Obama's plan, but the more the credit goes up, the less money the government gets.  The less money the government gets, the higher taxes have to go (first, to the upper 5%, such as small businesses, then to the middle and lower class).

Obama says he won't tax the lower/middle class in this time of crisis, but how else will the government support itself, especially under a democratic president?  In order for a "big government" to run, it needs money to fund its programs (except for Obama's healthcare plan, which is more of an "unfunded mandate").  The government gets this money through taxes.  Sure, the credits sound nice, but they just ease the pain that will be inflicted down the road when our brilliant government finally realizes that we're in debt up to our necks, and we need to fish ourself out.

Myth #3:  The Best Tax Plan Since Before Reagan?

Not really, what people tend to do with our economy is to look at our horrific Wall Street drop, but forget about the magnificent debt that our great nation has accomplished.  With a tax break help Wall Street?  A little.  Will it do anything for the national debt?  Not a lick!

What we don't realize is that somewhere down the road, we need to get money back into our government, and maybe lower taxes aren't the way to do that.  Economic stimulus works, but it can only do so much.  Eventually, a politician will need to step up to the podium, bite the bullet, and say "Hey, see our debt? Ridiculous!  We need to jack taxes and get our country's credit back to a respectable level!"  Will this politician ever get elected?  No, that's not what people want to hear, but it's the truth.  A tax break is fine and dandy for the time being, but in the long run, taxes are going to go up no matter who is elected to the Presidency.

Why should we deal with a temporary relief, only to get hit (and get hit hard) down the road when the government needs money.  Nothing lasts forever, and Senator Obama's tax plan sits atop the list.