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The Tax Attack - Deja Vu All Over Again

Written by: Eric Weis on Oct 28, 2008 12:20 AM EDT

This evening, listening to the rain-delayed World Series game, a McCain campaign ad played on the radio.  It ought to make the middle class shiver with fear. Of course, that is its purpose.

In the ad, the two principal claims made are that (1) Obama is going to tax anyone earning $42,000 or more, and that (2) Obama and his liberal cabal are getting ready to spend $1 trillion and drive our country further into economic hell.

So, I researched it and here is what I came up with on the $42,000 claim.

1a.  Partially true. Obama voted for a Budget Resolution containing tax bracket increases, returning the levels pre-Bush43.  The effect on that single wage earner would be $15 a year.  And a family would have to hit $83,000 to be affected in a similar way.  Middle class, watch out, Obama is coming to steal your Christmas, by golly!

1b.  The ad does NOT mention McCain's plan to tax employer health care benefits.  Even at the Bush 25% middle class tax bracket, and with a paltry $6000 insurance premium (GO TRY TO FIND ONE OF THOSE), this same middle class taxpayer will fork over $1500 a year out of the paycheck.  A family with a $12,000 insurance premium gets to pay out $3000 extra. That is, if the employer maintains the health plan (which many would not, since no employer wants to pay more in tax either).  And if you lose the employer contribution, the effect on cash flow is worse.  Middle class winds up paying even more (the difference between a total premium and the much smaller tax credit McCain would offer). Unless John wants to give away the ranch, to cover all but $15 of the insurance premium.  But would that not be going in the direction of govt pays all?  Hell, that is just socialized medicine in disguise!


So, John, please run that by me again. Who is going to be raising taxes on the middle class? 

As for Obama's dreaded $1 trillion dollar spending binge....

2a. McCain is kind of on track, because we are heading into a $1 trillion dollar federal deficit and it has to be funded in some way (increased debt, increased taxes, reduced spending...all are unpalatable).  The $700 billion bail out plan for the banks, may or may not be part of this $1 trillion. Who knows? Maybe Everett Dirksen can tell the difference between a billion here and a billion there.

2b.  Funding the war in Iraq.  McCain vows to fight on, at $10 billion a month ($120 billion per year).  Joseph Stiglitz, Nobel prize winner in economics, argues that the costs of the war are only 1/3 of the true value over time (including costs to take care of wounded and disabled veterans, and the costs to rebuild and retool our military).  So if McCain manages to prolong Iraq another four years (not to mention 100), the Stiglitz-equivalent cost will impose another $1.4 trillion obligation on America.


Gee, John, where are you going to find this money?  You aren't going to tax the wealty or business, are you?  Perhaps a national sales (VAT) tax?  Middle class, forget about Christmas, Easter and Thanksgiving.  Hang on to that coal around Halloween. We may need it to heat our homes.

Whoever the next President is, he is locked into a federal government which is already spending way beyond its means.  And who got us into this pickle?  A 40 year graph of national debt as % of GDP, shows that our debt% increased under Reagan, Bush41, declined under Clinton and then resumed its climb under Bush43.  It is now approaching 72%, rivalling the post World War II levels around 1950.

The debt will continue to increase.  One candidate (the blue one) is saying that he won't tax the middle class and the facts seem to bear him out. The other nominee (the red one) is saying that the opposing candidate (the blue one) will rape the middle class, because he (the red one) cannot talk about his own disastrous economic policies. Finger pointing is the only strategy left.

It's really just the old shell game.  Is McCain moving those shells quickly enough, or can we still tell which shell has the nut under it? I've been watching the shells, and am picking the blue one, because it seems to have stayed in pretty much the same place during the entire game.

- Arctic Eric

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Location: Wayne, NJ 07470

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