Senator Government's Tax Plans

I thought this was a great article from the Wall Street Journal. Here are some excerpts:

Whether or not last night's much-improved debate performance helps John McCain rally in the polls, at least voters finally got a clearer sense of the policy differences. For our money, the best line of the night was Mr. McCain's Freudian slip of referring to Barack Obama as "Senator Government." Neither candidate is offering policies that meet the serious economic moment. But Mr. McCain would let Americans keep more of their own income to ride out the downturn, while Mr. Obama is revealing that his default agenda is to spend money and expand the government.

Mr. Obama apparently wants the feds to unilaterally rewrite contracts based on something as undefinable as "good faith." At the same time, he is repeating his proposal to change the bankruptcy code so judges can unilaterally rewrite mortgage contracts as well. All of this would make credit less available to working families in the future.

Another Obama idea is to give a $3,000 tax credit to companies that create new jobs in the U.S. over the next two years. We don't know many employers who would hire people merely because of a tax credit that barely covers administrative costs, especially if that tax credit vanishes after two years. And especially if Mr. Obama is going to hit that same business with a whopping tax increase. As he told skeptical "Joe the Plumber" -- actually Joe Wurzelbacher of Toledo -- in his own Freudian slip this week, "When you spread the wealth around, it's good for everybody." But there won't be any wealth to spread if no one creates it.

Mr. Obama is also proposing more "stimulus," by which he means more federal spending. He wants $25 billion in federal aid to states, which would merely subsidize the most profligate state politicians. He wants $25 billion more for a "jobs and growth fund" for schools, roads and other union-driven public works. And he wants $25 billion more in loan guarantees for the Detroit automakers, on top of the $25 billion they've already received.

These ideas reveal that Mr. Obama thinks economic growth derives mainly from growing the government. They merely redistribute money taxed or borrowed from the private sector to favored political constituencies.

As for Mr. McCain, he is proposing to cut the capital gains tax rate to 7.5% from 15%. Mr. Obama responded by sneering that no one now has capital gains to tax, but Mr. McCain is right that lowering the after-tax return on capital could help even in a down market. He also wants to increase deductible capital losses to $15,000 from $3,000 for 2008 and 2009, another way to help the investor class ride out the bear market. While capital gains are taxed whether they are inflated or not, the $3,000 loss writeoff limit against regular income hasn't changed in 30 years.

Mr. McCain is also usefully calling for a permanent reduction in taxes on withdrawals from tax-preferred retirement accounts, which he'd tax at 10%. In addition, he'd suspend the current rules mandating that investors begin selling off their IRAs and 401(k)s when they reach age 70 -- an idea Mr. Obama also says he likes.

As the front-runner in the polls, Mr. Obama probably figures he can afford to play this kind of small ball and coast into the White House. He merely needs to disguise and downplay the magnitude of his tax and spending plans. As for Mr. McCain, we've argued for months that he's needed a larger, more compelling economic narrative -- and the financial panic gave him an opening to argue for a far more substantial tax cut to spur growth and avoid a deep recession. He's preferred to play small ball instead. Mr. McCain's best hope now is that millions of Americans share the basic economic common sense of Joe the Plumber.

'Senator Government' truly is an applicable term for Barack Obama. His history, his policies, and his own words all indicate that he believes government is the answer for everything. As this article stated, he's just hoping to keep his true stripes from showing for another two and a half weeks. Then it will be too late for anyone to stop him from taking your money and giving it to whomever he feels is deserving of it in the interest of 'fairness'.

Don't let him get away with this. The truth will hurt him when November 4th comes around...if people are informed about Obama's policies and share that information with others. Spread the word.

There's my two cents.