Monday, October 27, 2008

Obama's Tax Plan

Grandpa was sitting in the barber’s chair getting his yearly haircut and shave as he was talking to a couple of friends that congregated there on occasion. Me, I was just sitting in one of the chairs awaiting my turn to get my hair cut leafing through some old magazines as grandpa had this to say.

"Obama talks about the fact that his tax proposal gives tax cuts to 95% of the working class. He has even admitted to its intent, the redistribution of wealth in this nation. I’m no expert on economics but I do remember being taught that tax cuts were suppose to be incentive to create more wealth not to redistribute wealth.

Tax cuts were suppose to lower the taxes on the working man so that he could take more money home and spend it on his family. His plan will do that for some but not for everyone that he claims will get a tax cut. Some will not just get a tax cut but they also will receive a raise in their income. Furthermore, the raise in income will be non-taxable income.

What this comes down to, essentially, is that while some will only be paying less taxes into the federal treasury the rest will be taking tax money out of the treasury. They are trying to get away with this by calling it a tax credit. It cannot be called a tax credit for there are no taxes owed to credit. So, Obama’s tax plan is based upon deception not fact.

There are three ways to lower the amount of taxes owed. One is the tax deduction that lowers the amount of income that is taxable. Another way is the tax credit that actually lowers the amount of taxes to be paid. The last is the lowering of the tax rate that lowers the percentage on income to be taxed. Each of these ways will help those at the bottom of the income bracket to lower the amount of taxes owed to zero.

There is a fourth way and that is the rebatable tax credit. This credit has a unique attribute. It allows one to lower the amount of taxes owed past zero down to a negative number. Its intent was a way to help those taxpayers defray the total of certain expenses that they paid out during the past year. It is here that Obama uses to deceive people in his tax plan. For he is not using it as a means to defray past expenses but is using it to redistribute the wealth as he calls it.

I am not opposed to the concept of a rebatable tax credit. I am just against its use to redistribute the wealth of this nation. It can be a very useful tool of government to help the people as long as it is used for the purpose of its intent. In fact, I can think of two issues right now where it could be used.

One place it could be used is in the area of education. It could be used as a replacement for the idea of vouchers. This would take away from the argument of the conflict of church/state relationship that makes vouchers such a controversial issue now. It would also give control back to the parents in regards to the education of their children. This is probably the biggest benefit of it. Furthermore, it would help those parents who wish to home school their children.

Another issue that could be addressed with it would be health insurance. The same argument could be applied here as I argued for education. Furthermore, it would be helping those businesses that are in trouble now resulting from high health care costs. It could be used to help defray the costs of the premiums. Wouldn't helping to defray the cost of premiums be a cheaper way for the government to go than paying the bills directly?

What it comes down to is that in a country that has free enterprise as its economic system there are more than one way to solve the problems we face in today’s world. In a country that has a socialistic economic system there is only one way, the government’s way. Free enterprise can be very innovative in the solutions it comes up with while socialism cannot.

These two issues directly affect each and every family. Therefore, if we be a government for the people then let's allow them to make the decisions in regards to the taxes that they pay, not the politicians. So, when you go into that polling booth do so informed on the issues not on the promises of a politician,"

He then got up out of the chair and said, "your turn, boy."

I hopped up into the chair, looked up at the barber and said, "I want a haircut just like grandpa’s"


BB-Idaho said...

Wonder if Grandpa subscribes to the
Gini Coeffient of economic theory, or the popular horse apples on the road perspectives of John Kenneth Galbraith. :)

The Griper said...

both, the horse and sparrow are satisfied tho, aren't they, BB?

remember this, allow the sparrow to share in the oats first and the horse is fed but once but the sparrow will be fed twice.

BB-Idaho said...

We have some horses out back...perhaps I should tell the wife to stop filling our birdfeeder? :)

The Griper said...

now there'd be a sight, sparrows sitting on the backs of the horses just awaitin for dinner time. get your camera out. :)

Average American said...

Griper, I've blogged and commented on others blogs about the negative tax. I despise this gimmick. If a person gets back a bigger refund than they put into it, they are no longer "taxpayer", they are now "welfare recipients"! Call it what it is and more people will do their best to get off of if. Pride is still a part of some peoples lives. The ones that keep getting it, can at least be monitered more closely.

The Griper said...

i hate to disagree with you here but pride no longer is the issue when it comes to welfare as it once was. that is why they changed it from welfare to workfare.

but also, i agree with you when it is being used as Obama wants to use it for it is just giving money to people.

but my two ideas are speaking of issues that address what the government is already spending money for. my idea acts as an incentive to the people to spend their own money first.

1. it acts as an incentive for those to go out and get a job so that they can take their kids out of the public school system.

2. they both are applicable to everyone who is subject to be taxed.

3. it would help businesses far better than these bailouts all the time.

4 it acts as a reward for working rather than rewarding someone for not working which is what welfare does.

5 it instills pride back into people because they will know they are only getting back what they have already paid out.

6. it would act in the same manner as social security works in the minds. people are not ashamed to draw social security because they feel that they deserve it after paying into it all of their lives.

7. but most important, is the fact it forces people to make their own decisions rather than allowing the government to make the decisions. that is one factor people have forgotten how to do.

The Griper said...

oh and one more thing, aa. if my ideas were enacted and the government promoted them as it should, eventually it would force government to get out of the business of education and health care all together.

Gayle said...

Wouldn't that be wonderful, Griper. The government out of the business of education and health care all together! Yep! I'm for it!

This also reminds me it's time to give the horses their daily feed of oats. Thanks. :)

Gayle said...

By the way, I forgot to mention I like the way you've redesigned the top of your blog. Very nice!

The Griper said...

the sparrows will thank you also, gayle. :)

BB-Idaho said...

The sparrows have their own well-known hymn
...Grandpa's turn to
name a well known horsey hymn..:)

The Griper said...

hahaha, you're nasty bb.

couldn't find a hymn but found a ballad that is like a prayer, bb
a right pretty one too by emilylou harris in my song section on top of blog. hope you enjoy it.


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