April 19, 2008

JUST WAIT AND YOU CAN GET THEM WHEN THEY ARE RICH:

Why Not Blame Obama? (Lawrence Kudlow, 4/19/08, Real Clear Politics)

[D]oubling the capital-gains tax rate will affect Americans up and down the income ladder, not just rich hedge-fund managers. In addition, capital-gains tax cuts are self-financing, and they stimulate jobs and the economy. You want to raise budget revenues and spark economic growth? Cut the cap-gains tax rate. That's what history shows.

The Wall Street Journal's Steve Moore points out that in 2005, almost half of all tax returns reporting capital gains came from households with incomes under $50,000, while more than three-quarters came from households earning less than $100,000.

Obama also proposed uncapping the payroll tax, another blunder that will hit people up and down the income ladder. While Obama pledges tax hikes only for folks earning more that $200,000 a year, his tax hike on payrolls would actually slam middle-income earners. The cap on wages subject to the payroll tax is presently $102,000. By eliminating that cap Obama will be soaking veteran firemen, cops, teachers, and health-service workers, along with a variety of other occupations.

In fact, in America's largest cities, a firefighter married to a school teacher can earn close to $200,000 filing jointly. So not only will each spouse separately pay more for Social Security and health care under Obama's plan, together they'll also be slammed by Obama's cap-gains tax increase.

This is more than just a failure to understand the Laffer curve. It's another cultural misstep by Obama. I can't help but wonder if the senator knows any cops or firemen.


Rather than taxing folks while they're middle class, Senator Obama should propose denying them government benefits (means testing) upon their retirement, when they'll be wealthy.

Posted by Orrin Judd at April 19, 2008 7:25 AM
Comments

Means testing is the real third rail. And every politician remembers what happened to Rosty when he was cornered by angry seniors (even though the issue was a bit different).

The Dems have opposed means testing because they want people to think of insurance and annuities, rather than welfare. They know that once the cat is out of the bag, Social Security is finished.

But his ignorance of tax rates and revenue was quite astonishing.

Posted by: ratbert at April 19, 2008 6:59 PM

Obama knows nothing about the basic issues of the day and gets a pass, but the media didn't go so easy on Bush. He was excoriated for not remembering the name of the president of one the small and difficult to pronounce countries in Eurasia? I'd love for them to ask Obama or Hillary that question at the next debate.

Posted by: erp at April 20, 2008 10:36 AM
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