Views on politics and current events

Saturday, October 25, 2008

Random Thoughts On Tax Cuts

With a few days left before the election, the issue seems to be the economy. With a national debt growing like a weed, with a $700 billion bail out bill already passed and who knows how many more government bail outs around the corner, with the occupation of Iraq still in full swing and costing how many billion a month, and hundreds of billions of other dollars being spent on who all knows what. But the candidates have laid out their plans for recovery. And what do both of them want to do? Cut taxes.

John McCain wants to cut capital gains tax, cut corporate taxes, because this will stimulate the economy by helping to create jobs. The premise being that if businesses, investors and capital gains earners get a break, they will invest more money into growing existing businesses and starting new business ventures.

First off, there's very few business persons that will start a business or expand a business with only their own money. Some don't have enough to do it, others that have the money already have the money invested and making money for them. Credit is the key factor here. The amount of money a person has determines how much credit they can get. Credit can be a funny thing, as the people who prove they don't need it because of their assets are the most likely to get it. So if a person has money earning more in a percent of return than he can borrow at, why would they spend their own money? Remember that the prime interest rate is only given to those that have the best credit, the ones that really don't need the loan in other words.

And on top of it, give them a capital gains tax rate cut. Why? Are not capital gains income? Because if we allow the wealthy to have more money via a lower capital gains rate, it will help all the rest of us? I really don't have anything against the wealthy. There have always been and will continue to be folks that out of ambition, hard work, skulduggery, inheritance or a combination thereof, will have more than most. But they sure don't need to be given any more advantage than they already have.

Barack Obama is advocating a tax cut for those making less than $250,000, and a tax hike for those that make more than that. There's even a tax cut calculator on Obama's website that will tall you how much you'll get in tax cuts (as long as you don't go over the magic $250,000 figure). My tax cut is around $1,000. Now I can buy into that more than a tax cut for the rich, which tells you how much I make a year. But this is pandering for votes just as sure as McCain's plan is. It's just pandering to a different base. While I'd sure take the tax cut, will it make my life demonstrably better?

So, history will show that the turning point in this election was when the economy tanked. At least when it tanked bad enough that it hurt more than just the ones towards the bottom of the economic ladder. And right in the middle of it, both candidates tried to buy votes by offering lower taxes for certain people. In essence, both candidates tried to buy votes with whose money? The very same people who pay them in the first place. As for me, I'd rather see some old-time electioneering, and have the candidates buy me a ham sandwich and a beer on election day.

And where have the other issues gone? Buried under an avalanche of lipstick on a pig, $150,000 wardrobe spending, guilt by association allegations, not experienced for the job a bad thing (Obama) , not experienced for the job (Palin) a good thing, and so many other non-issues. And all the while, things that have a direct affect on the state of the economy are not even glossed over. They're not even mentioned. The occupation of Iraq, the grand plan of how to pound sand down a rat hole at the most cost possible still goes on. What's really sad is that life is still being lost there and in Afghanistan, without much being said about it.

But the people have to be shown what's in it for them. Historically, it has been a chicken in every pot, or a full dinner pail. Now tax cuts are offered. Both candidates must think that a lot of voters are in this game for the money. I'll be damned, it looks like they're right. But if the economy doesn't turn around, if this country continues to have over 300 military bases around the world and spend more in 'defense' spending than the rest of the world combined, will tax cuts really do anyone any good?

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