Well, its a slow news day today and there wasn’t very much interesting news so I’ve decided to write some useless rant about economic policy that probably no one cares about. The topic today is taxes versus no taxes, which, quite coincidentally, is the only issue in the upcoming election that I actually care about. So we have two propositions. One is that we lower or keep taxes the same for everyone while increasing our spending. One is that we cut taxes for everyone while increasing our spending. While both of these plans suck, because for some odd reason, both parties feel that we have to increase spending for some reason, I dislike the first one even more than the second. Now, as you may have guessed, the first proposition is Obama’s economic plan while the second one is McCain’s.
Obama keeps talking about that taxes should be “fair” and therefore we should increase the progressiveness of our already progressive tax system. Current statistics show that the top 1% of Americans make roughly 18.6% of the month in the country but pay around 27% of the taxes(this is not just income taxes, its all taxes), so despite the common popular belief that the rich somehow pay a less % of taxes as to their income, statistics from the IRS clearly show that they are carrying more than their own share of the load. As for income taxes, its even more tilted. The top 50% of society pay over 96% of all income taxes while the bottom fifty percent pay less than a whopping 4% of the country’s income taxes. So if your poor like me and complain that you pay too many taxes, think about that for a while.
Raising the taxes on the rich while decreasing taxes on everyone else is an example of economic socialism which is a policy I simply do not agree with. It sounds nice in theory, everyone being equal and all, but the problem is that if you follow this policy, everyone would end up equally poor. Overly heavy taxes(corporate income tax in the United States is already 35%) simply erode the will of people to work hard and that is the main problem in a heavily socialistic government. The more people can get for free, the less they are willing to work. After all, why bust your ass off all day when you can live decently doing nothing and living off of what the government promises you. It doesn’t make any sense.
Even though I am pretty poor myself, I simply do not believe in lots of social wealth distribution from the government. I believe that it should be mainly the responsibility of people themselves to pull themselves up. Too many people think its the government’s job to pull everyone out of poverty so they sit there, do nothing, and wait for the government to bail them out. This generally gets them nowhere as no government will go 100% of the way to bail you out. In other words, if you are a lazy bum with no skills, no one is willing to work his or her ass off just to subsidize you lazy lifestyle. In order to achieve or accomplish something, you must take responsibility for your own actions and work your way out of the situation you are in. If you are unskilled and are looking for something better, learn some skills. There are plenty of social help programs and institutions that may help you to a better career. Yes, it sucks and studies say the 80% of people born into the bottom 1/5 of society tend to stay there so most people give up hope. But what they are forgetting is that 20% are getting out somehow and if that 20% can, that you can also. But those 20% do not get out because they wait for the government to bail them out. They work hard to bail themselves out.
Social equality for Obama also means limiting outsourcing jobs. This basically means reducing tax benefits for companies that outsource. While this may sound like a good idea to bring more jobs back into the United States, its a bad idea when you look at the global economy that is now evolving. Companies from every country are competing with us now and forcing our companies to hire more expensive workers only means driving the price of our products higher which means driving up the cost of living. Furthermore, this will make our domestically produced products more expensive than foreign produced products which will tip the competition in their favor. Our companies cannot pay its workers $8 to $10 a hour and expect to compete successfully with foreign countries that pay their workers a tenth of that wage. The United States, being a first world country, is moving more jobs away from the manufacturing field and into the more highly-skilled service sector. If you want to keep up, you will have to get an education and learn some skills.
So basically, the policy of higher taxes and increased social subsidization combined with economic protectionism is a complete failure in policy.
Now, McCain trying to keep things as they are, is not much better. However both politicians want to increase spending which is something I do not get. In order to balance the budget and increase surplus, we need to cut spending. Some ways to do this are:
1. Stop the war(duh)
2. Reform Social Security(we need to do this anyways)
3. Cut pork barrel spending
4. Make programs more strict or cut some of the ones that are mostly just wasting money
That is the direction the government should be going instead of trying someway to increase income to fund increased spending. In fact, it makes sense: If your spending too much, decrease spending. Its a simple concept that neither the democrats or the republicans seem to get. Maybe Ron Paul wasn’t so crazy after all.
