Oh, the taxes you’ll pay!

By STEPHEN WU
Opinion editor

Oh, the taxes you’ll pay! You’ll be taxed in your life! You’ll be taxed in your death! You’ll have no more money! Taxed till your very last breath!

My Dr. Seuss aside, Barack Obama’s, the man who would be president, has, perhaps, the most reckless and fiscally irresponsible tax plan proposal from the left wing of the Democrat Party, certain to doom the American economic system into stagnation and prolong this downturn. Utterly flawed and financially imprudent, Obama’s actions will plunge this country into a further downward spiral, and recovery shall be exceedingly difficult.

Alex Hagentorn/The Paw Print

At a time when Americans have little to spare, Mr. Obama would impose the largest tax hike in history, spiking the top income bracket 13% to 39.6%. He would uncap Social Security taxes, which are restricted at $102,000, and tax them at anywhere from 2-4%, though the Obama campaign once put that figure as high as 12.4%. Mr. Obama’s claim that “95% of workers and families” will receive a tax cut is also a patent falsehood; these “tax cuts” are disguised spending in the form of refundable tax credits given to people who pay no income taxes. Tax cuts are commonly understood to be reductions in federal income brackets, not throwing C-notes out of planes to people who already pay nothing. In fact, these individuals, roughly 40% of the populous, who pay no income taxes would increase their current 3.8% of net income revenues, meaning Obama is essentially promising checks to everyone (except “rich” people, who, of course, do not count as real people). It is absolutely incredible that on top of the $700 bailout package, Obama proposes another $1 trillion in entitlement spending that is unpaid for and unwarranted.
Of course, income taxes are not the only thing Senator Obama can tax to death. Death can also be taxed. Mr. Obama seeks to set duties of a staggering 45% on estates or businesses worth over $3.5 million, which, to be honest, is no longer the grand sum it once was, given inflated home and business values. The Obama plan, and the left in general, fundamentally do not or cannot understand the fact that these estates are generally held in fixed assets (houses, farms, factories, equipment) and not $3.5 million in gold bars and pearls in grandma’s safe. The estate tax has the effect of forcing heirs to liquidate homes or businesses to pay the hefty death bill, thereby punishing the inheritors and compromising the integrity of the underlying asset.
Capital gains are also unsafe, as Obama has promised to hike taxes on dividends to up to 28% from 15%. While the recent economic turmoil has wiped out $2 trillion of Americans’ retirement savings, Obama proposes to tax, at an increased rate, what little remains in their reserve accounts. Your parents’ retirement fund and your college money are likely tied in some part to stocks, meaning you will see less of that money because Barack needs it to start paying for his trillion dollars of reckless spending. Obama also disregards sheer empirical evidence that indicates that every past increase in capital gains taxes have yielded a net decrease in total revenues collected.
In terms of actual impact, I suspect that the bulk of Poly parents either work for themselves, in a small business environment or in the employ of a large entity, such as an educational institution or corporation. Direct effects of Obamanomics are a real decline in wages, as most small businesses file taxes under individual rates, meaning that they will be subject to the 13% tax hike. Large corporations will also likely feel the squeeze and may freeze salaries as payroll taxes skyrocket and access to capital and credit evaporates.
In this time of crisis, the last thing a presidential candidate should be doing is introducing old-style tax-and-spend policies that have characterized the liberal economic agenda with heavy-handed regulation and heightened taxes for four decades. Rather, we need taxes to be cut, or at least arrested at current levels, to promote productivity and reinforce American confidence that their money will not be subject to increased government grubbing. The Obama plan would be disastrous and prolong this slump and, as my friend Dr. Seuss would say, “when you’re in a Slump, you’re not in for much fun. Un-slumping yourself is not easily done.” At least not with Barack’s plan, anyway.