Obama And Taxes

[RedStar25]

From the Wall Street Journal..

Political Diary

July 9, 2008

Reviving Redistributionism

New data from the IRS will be out in a few weeks on who pays how much in taxes. My contacts at the Treasury Department tell me that for the first time in decades, and perhaps ever, the richest 1% of tax filers will have paid more than 40% of the income tax burden. The top 50% will account for 97% of all federal income taxes, while the bottom 50% will have paid just 3%.

But Barack Obama has decided the rich still don't pay enough. He would redistribute the tax burden even more heavily on small business owners and the entrepreneurial class (two-thirds of the tax filers in the highest income tax bracket are small-business owners.) The nonpartisan Tax Foundation's Scott Hodge has just crunched the numbers on the Obama plan and concludes that "more than $131 billion would be redistributed from the top 1 percent of taxpayers to all other taxpayers."

Sounds fair, no? Only 1.13 million taxpayers, out of some 128 million, would end up paying higher taxes, according to the Obama camp.

But in the real world, who ends up paying a tax is not just the person on whose tax return it falls. History has demonstrated time and again that raising tax rates on the wealthy in the name of "redistribution" leads to so much income shifting, reduced work and investment, and redeployment of money into tax shelters, that the rich usually pay less, not more taxes, at higher rates. The burden of paying for government shifts to others, including some who may not file an income tax return at all

[neon9]

Economist Glenn Hubbard of Columbia University has shown that in 1970, when the highest tax rate was 70%, the top 1% shouldered 16.7% of the income tax burden. Today the top tax rate is 35% and the same class of taxpayers pays a whopping 39% of the burden. The worst way to "soak the rich," Mr. Hubbard finds, is to raise tax rates.

[R_J_McBean]

I think your missing the point. Obama wants to raise the marginal tax rate out of a social engineering agenda, not out of any desire for fiscal responsibility. If maximizing government revenue was his objective, then he would keep the tax cuts or maybe even lower them some more. Every time taxes are increased it lowers government revenue, and every time taxes are reduced it brings in more revenue. So why then would anyone propose a tax increase? It's pretty simple, he's just pandering to the wealth envy crowd.

[Boomer136]

There are three kinds of lies: lies, damned lies, and statistics.

Benjamin Disraeli; Mark Twain

[neon9]

I think your missing the point. Obama wants to raise the marginal tax rate out of a social engineering agenda, not out of any desire for fiscal responsibility. If maximizing government revenue was his objective, then he would keep the tax cuts or maybe even lower them some more. Every time taxes are increased it lowers government revenue, and every time taxes are reduced it brings in more revenue. So why then would anyone propose a tax increase? It's pretty simple, he's just pandering to the wealth envy crowd.

[monsoon]

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