“When you spread the wealth around, it’s good for everybody,” Barack Obama said, in response to a statement from Joe Wurzelbacher – AKA Joe the Plumber – early in October. Joe had asked Obama why he planned to raise his taxes, arguing that the policy would be disadvantageous given the current economy.
Obama’s current tax plan is to cut taxes for those families and businesses earning less than $250,000 – the largest cut going to those making less than $18,000 – and to drastically raise taxes on those in the top 1 percent, an average of a 9 percent increase. John McCain’s plan is to cut taxes everywhere, with nearly identical tax cuts to those of Obama for families earning between $60,000 and $110,000 a year, and even larger cuts for that top 1 percent. Overall, Obama’s average cut is -0.3 percent and McCain’s is -2 percent. Obama wants to redistribute the wealth, while McCain wants to encourage spending on all levels.
If we look into the details of the two plans, a red flag pops up. The last time I heard the phrase “redistribution of wealth,” I was learning about the Russian communist regime. Any kind of government intervention that intends to economically equalize its citizens is socialism, which Karl Marx says is a transitional phase between capitalism and communism. While I don’t think Obama wants to create the next Kremlin, he is pushing the wrong buttons of those of us who believe in a capitalistic government.
Sen. Obama has rebutted the insinuations that his policy is socialistic.
“I don’t know when [McCain] decided to make a virtue out of selfishness,” Obama said, suggesting that McCain’s plan favors only the wealthy. This accusation is finicky and discriminatory. The upper class already pays taxes. In fact, the top 1 percent of taxpayers contributes 40 percent of all federal taxes. To call those people selfish is just unfair.
Obama says he’s “not trying to punish [their] success, [he] just wants to make sure that everyone behind them gets a chance at success, too.” Unfortunately, with such a radical difference in tax schemes for the rich versus the poor, the senator’s plan will do exactly what he claims it won’t — punish the successful — and that is not the way a capitalist society works.
To Obama’s credit, it should be noted that simply cutting taxes and subsidizing investments won’t help the very poor, as they don’t pay taxes anyway. Obama’s plan is directed toward giving them a hand up in the system. It is the right idea, but the wrong course of action.
The right way to give them a hand up is not to throw money at them, but instead to increase the job market and drive down the cost of living. You do that by encouraging spending and investment in the market. Sure, billion-dollar companies have enough money to pay more taxes while keeping their interests secure, but know that billion-dollar companies are interested in one thing: money.
If the government takes more money from them, they will cut costs across the board, lay off employees, cut wages and decrease hiring. Oil companies will raise gas prices, car companies will raise vehicle costs, energy companies will raise fuel and electricity costs, pharmaceutical companies will raise drug prices, banks will raise interest rates, etc.
The American Dream is the opportunity to work your way from the bottom to the top. It is not a free ride to the top, nor is it bringing the top down to you. Capitalism drives entrepreneurship, which drives innovation, which drives progress. Our plan of action should not be to raise taxes to fund extensive government spending, but to cut both taxes and government spending in order to encourage domestic spending, increase job opportunities and subsidize private investing, like McCain’s tax policy suggests.