Thursday, October 30, 2008

Progressive taxation vs. Socialism

One of the major differences between Barak Obama and John McCain is related to their economic policies, which are strongly based in what their core beliefs are about how the economy works. Obama's support of progressive taxation, which places are larger tax burden on those who are likely to be able to afford it, has earned him the label of being a socialist from conservatives, including McCain and Sarah Palin. Saying that progressive taxation equals socialism is like saying that owning golf clubs makes you Tiger Woods. While both you and Tiger own golf clubs, there's a little more to the his skill than what you both have in common.

What John McCain and his conservatives buddies don't want you to know is that we've had a progressive tax structure in this country for a very long time. Under Reagan, H.W. Bush, Clinton, W. Bush and both of our current Presidential candidates, the tax structure would be progressive. If you buy that progressive taxation leads to socialism, you're ignoring the fact that we've had this tax system for a long time under Presidents from both parties, and yet, we continue to operate in a highly capitalistic, free market fashion. Unless the banking industry takes risks and needs Washington to bail them out, of course. In that situation, government intervention and tax payer support of business is Ok.

The idea that somehow McCain's plan is less progressive than Obama's plan is highly debatable. Both candidates are reducing the overall level of taxation. The difference is not whether the candidates will "spread the wealth" as McCain continues to assert, but WHO the wealth will be spread to. McCain wants to spread the wealth to people who already have it. Obama thinks the country would be better off if poor people got to keep their money, instead of sharing it with people who don't really need it. Fortunately, the polls suggest that McCain and Palin have little traction with their arguments. Voters know how much money they make and the majority know they don't make over $200,000.

As the video Lord Bling posted yesterday show, McCain was highly supportive of a progressive tax until he realized that becoming the Republican nominee for President would require him to adopt their economic position and abandon his own. The non-partisan Tax Policy Center also found that while both candidates will increase the deficit, McCain's plan will continue to increase the deficit to a much greater extent than Obama's plan or even if we had another 4 years of W. Yikes. The good news is that it doesn't appear that most people are falling for this fallacious logic.

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