Thursday, October 23, 2008

Economists: Obama's tax plan will ruin the economy..and the tax code as well

Economist: Obama's Socialism Will Wreck the Economy
It'll Ruin the Tax Code as Well

Posted by: Brian Faughnan

Economist Adam Lerrick asks whether the tax code is at a tipping point, and if Barack Obama will shove it over the edge:

What happens when the voter in the exact middle of the earnings spectrum receives more in benefits from Washington than he pays in taxes? Economists Allan Meltzer and Scott Richard posed this question 27 years ago. We may soon enough know the answer.

....Barack Obama couches all of his talk in the language of 'fairness;' of trying to make sure that everyone gets 'a slice of the pie.' But in employing the rhetoric of redistribution, class warfare, and yes, socialism, Obama ignores how progressive the tax code already is. It's often said that when you rob Peter to pay Paul, you can always count on Paul's support. In trying to push the fairness needle further, Obama is attempting to lock that rule in as a foundation of tax policy.

As the Tax Foundation points out, the tax code already redistributes $1 trillion from the top 40 percent of earners to the lowest 60 percent. How much is enough for President Obama? And what happens if we discover, as France, Germany, the U.K., and much of Europe did, that you will destroy the economy and ruin government finances if you allow the bottom half of earners to vote themselves whatever benefits they want, at the expense of the minority.