Democrat Barack Obama told voters Saturday he would push an aggressive economic agenda as president: cutting taxes for the middle class, raising taxes on the wealthy, pouring money into "green energy" and requiring employers to set up retirement saving plans for their workers.He outlines for us the benefits of his proposals.
Speaking to about 200 people in Wayne, a Philadelphia suburb, Obama made no new proposals but emphasized earlier ones in light of rising gas prices, inflation and job losses. They include a $1,000 tax cut for most working families; a new Social Security tax on incomes above $250,000; a "windfall profits" tax on oil companies; a $4,000 annual college tuition credit for those who commit to national or community service programs; and an end to income taxes for elderly people making less than $50,000 a year.And this is how Obama will pay for these benefits.
Obama said he could pay for his programs by eliminating the Bush administration's tax cuts for the wealthy, winding down the Iraq war and spending more on alternative energy programs that eventually will save money.If you have watched any infomercials you have heard the next sentence. "BUT WAIT THERE'S MORE". And true to the to this tradition of selling a bill of goods, Senator Obama add this.
He said employers should be required to set up retirement saving plans for workers even if they contribute no money to them. Workers would automatically be enrolled unless they choose to opt out, he said. That way, he said, "most people will save more."BUT DON'T CALL YET.
He also vowed to spend $150 billion over 10 years to establish a "green energy sector." It would require greater fuel efficiency in cars and devote more money to solar, wind, and biodiesel energy.Not mentioned in this report, but part of the Official Obama Blueprint for change is the doubling of Foreign Aid to $50 Billion a year.
Time for a Reality Check. Separating taxpayers into 3 classes (lower, middle and upper) by per cent of total number of returns with an Adjusted Gross Income (AGI) greater than Zero, defines the Middle Class. The IRS latest released figures are for 2005. These figures separate the positive AGI taxpayers into 2 main groups - Top half and bottom half. The top 50% are further broken into sub groups.
These figures reveal that the Top Half paid 96.93% of Individual Income Taxes, and the top 25% paid 85.99%.
Stated another way THOSE INDIVIDUALS WHOSE AGI IS IN THE BOTTOM HALF OF TAXPAYERS PAID JUST OVER 3% OF ALL INDIVIDUAL INCOME TAXES. And 75% OF ALL INDIVIDUAL TAXPAYERS PAID JUST OVER 14% OF ALL INDIVIDUAL INCOME TAXES.
Note that those 75% of all positive AGI Taxpayers WHO PAID 14.01% OF ALL INCOME TAX INCLUDES ALL OF THE MIDDLE CLASS. This group also includes 8% of the Upper Class.
Other interesting figures disclose that the highest 10% paid better than 70% of all individual income taxes; the top 5% paid almost 60%; and the TOP 1% PAID BETTER THAN 39% OF ALL INDIVIDUAL INCOME TAXES. We already have a highly graduated income tax system. Can we really expect the Upper Third of Individuals, who already pay about 90% of all individual income taxes to pay more, without increasing the tax rate for all? What's fair? is the question. While you consider your answer, remember that 90% already comes from the upper class.
For comparison, in 1980 the Bottom 50% of Individual Income Taxpayers with a positive AGI paid just over 7% of all individual income taxes. In the most recent 25 years of the IRS figures, the bottom half share of individual income taxes has fallen almost 60%. At the same time the highest 25% of positive AGI returns have seen their increasing share of Individual Income Taxes rise form 73% to 86% of all Federal Individual Income Taxes. The top 25% have seen their share increase more than 3 time the decrease of the lowest 50% of Individual Income Taxpayers.
Now look at corporate Income Tax rates. Currently the US rate is 39.3%. That is the second highest rate in the developed countries of the world. Only Japan is higher and then only 0.2%. Germany, UK, Australia, Spain, Mexico, Canada and Ireland are all lower in the Industrial Countries of the World. In fact Ireland's rate is 12.5% - less than one-third of the US rate. (Source: Corporate Income Tax Rates Around the World)
Added to the cost to Corporate America, Obama's desire to increase the minimum wage to $9.50/hr, mandatory Corporate employee retirement plans, re-doing our NAFTA Treaty and mandated higher fuel costs due to bio-fuels, Energy Restrictions and oil company "Windfall Profits" taxes is it any wonder jobs go overseas? (Ah, maybe that's what Obama means by reducing middle class income taxes - if you eliminate their jobs, there's no income to tax.)
While that may seem like a snide remark, the reality is that's what will happen. The oil company record profits are not "windfall profits". Industry wide the oil companies have an eight per cent (8.3% to be exact) profit margin. That's below the profit margin for all manufacturing. The gross profit figures are so high because the oil companies are so large, and remember these oil companies already pay 2 to 4 times as much in income taxes as they keep in profits. "Windfall Profits" go to the owners of the Reserves. These are currently Foreign Countries NOT subject to US Income Taxation.
Saving money by withdrawing from Iraq sounds good too. But a withdrawal of Troops before a diplomatic and peaceful end of the underlying causes will only result in our having to return at much greater expense and loss of American Lives. The cost now is nothing compared to defending our shores if we pull out before a victory.
Taxes represent Our Money. Taxes represent the greatest source of Government Dollars. Considering the way Senator Obama wants to spend OUR MONEY, can we really afford him?