With American economic conditions continuing to deteriorate, the last thing we need is for the government to stifle the consumers and businesses.
Sadly, Barack Obama appears to be oblivious to the economic suffering that his proposed tax increases would cause.
Obama plans to almost entirely rescind the Bush tax cuts. While the Bush presidency has been an unmitigated fiasco, it must be noted that his tax cuts were one largely successful policy.
Despite the crash in technology stocks and the aftershocks of 9/11, the economy barely missed a beat, falling into the briefest recession in U.S. history. Bush’s tax cuts played a large part in keeping things humming along, providing a large incentive for consumers to spend more money and businesses to invest profits thereby creating new jobs.
Since the economy came out of its slump in 2002, we have had five years of solid growth up until this year. Now, though, Obama wants to undo Bush’s tax plans and raise the tax rates back to pre-2001 levels. Obama claims that this would only affect the rich, but the tax cuts have benefited nearly everyone.
For instance, the Bush tax cuts increased the size of the tax deduction for people raising children and also eliminated the penalties that the tax code applied to people who were married. The last time I checked, Americans of all incomes get married and have kids.
Almost half of Americans own stocks directly or indirectly through mutual funds or pensions. Obama would drastically hike taxes on investment profits, thus hurting almost half of Americans – hardly just the rich.
In fact, one expert concluded that Obama’s tax hikes on investments would cause the American stock market to lose 10 to 20 percent of its value immediately as people sold out their shares to avoid the growing tax burden. I can’t imagine how a 20 percent drop in the stock market would help the economy.
Most ridiculously of all, Obama opposes easing the tax burden on gasoline. There is bipartisan support for the elimination of the federal gas tax of roughly 20 cents a gallon through the summer driving season. Both McCain and Clinton have supported this plan as a way to help ease the pain at the pump.
However, Obama bafflingly opposes this plan despite its benefits for almost all Americans. This simple tax cut would save us an average of $3 per tank of gas. It would cost $8.5 billion to implement – no small chunk of change. But compared the $150 billion needed for the stimulus package Obama supported, $8.5 billion is nothing.
Obama opposes the gas tax holiday because he says it is mere “political pandering.” Well then, Mr. Obama, why did you support the more costly initiative to send out $600 checks to everybody?
Moving on to another area of fiscal hypocrisy, Obama claims to care about the budget deficit, but his first budget would increase government spending by over $300 billion dollars versus the previous year. The press has indicted Bush for his profligate spending, but Obama’s budget proposal is so fiscally irresponsible that it makes Bush look prudent.
It’s clear why Obama is so keen on jacking up taxes – he needs them to fund his wild socialistic visions. Socialism is a tried and failed concept. Just look to Europe’s decades of stagnation to see the effects of Obama’s economic thinking at work.
For example, check out fuel prices across socialistic Europe: Gas costs at least 8 bucks a gallon in the UK, France, and Germany.
Obama wants to import European economic policies to America — we can only hope he fails.
Ian Bezek is a sophomore economics major. His column appears Mondays in the Collegian. Letters and feedback can be sent to email@example.com.