Monday, September 08, 2008

Death and Taxes...

Let's get something straight. The Republicans are not the party of 'low taxes.'

Oh, they sell themselves as exactly that and many blue collar voters fall for it.

Many angry working-class Republicans I know go apoplectic when they hear somebody is thinking of voting for the Democrats.

"Do you want them to raise your taxes? 'Cos that's what they'll do..."

But let's get something straight. For the working and middle class, it's the Republicans who have raised taxes pretty much consistently:

Ronald Reagan's 'Reaganomics' involved MASSIVE tax cuts for the wealthy, but payroll taxes for the working man actually increased.

Bush Snr promised 'No New Taxes' and immediately reneged when he hit the office.

Bush Jnr's tax cuts made rich people richer - but even if he didn't tax the middle and working classes more, his economic mismanagement has them on a tighter budget than ever before.

Basically, the Republicans have failed to make good on their 'low taxes' promise at every opportunity - but they still wheel out the same old dog-and-pony show and gullible voters lap it up.

Well, let me set the record straight. If you're voting this election on taxes alone, here's how McCain and Obama match up, according to The Tax Center, a joint venture of the Urban Institute and the Brookings Institution:

If you're in the bottom 20% of taxpayers (making less than $20,000 a year) the 'low tax' Republicans will save you just $21 in taxes. Compare that to Obama's tax strategy, which will see an additional $567 in your pockets - almost 30 times more (and real money, as opposed to less than the cost of a family sized bucket of fried chicken.)

That's in addition to a lot of welfare programs being set up to help poorer people with the cost of health care, housing and education.

The next 20% of tax payers, making up to $66,400 a year, would be given back $325 under McCain's strategy - but get an extra $1,100 under Obama's plan.

In fact, the only time McCain trumps Obama is in addressing the top 1% of American tax payers, making $600,000 a year or more.

Under McCain, they'd claim back almost $50,000 a year. Obama would actually tax them more - an average of just under $94,000.

The Break Down

The strategy is simple.

McCain knows that to keep his campaign coffers full, he'll have to extend an olive branch to the big spenders and large corporations. Nobody who makes $600,000 a year wants to be hit with a nearly hundred-grand tax hike, so it makes sense to do whatever they can to get McCain elected (including donating to his campaign.)

The smoke-screen appears when it comes to the working and middle class - including the core regiment of blue-collar, red-state voters who help keep the Republican party in office.

They get hit hard every time they vote a Republican into office - but keep doing so because of the hyth of 'trickle down' Reaganomics.

Basically, the theory that the less that rich and the big companies have to pay in taxes, the more will get filtered back into the economy to increase wages and create jobs.

The problem is - Reaganomics doesn't work. The rich don't 'trickle' their money into anywhere except their savings accounts. That's why they're rich. Corporations don't 'spread the wealth.' They might make more profits, but that doesn't prevent them axing jobs and 'streamlining.'

The fact is, poorer people feed more of their tax rebate back into the economy because they have to. Take the bottom 20% of Americans, who make just $20,000 a year. If they got an extra five hundred bucks, do you think they'd just keep it in the bank?

No - they'll spend it. On groceries, gas and utilities. If they were lucky, on vacations and summer camps. They'll use that money and it will trickle up.

Added complexity...

It's not quite as simple as I've made it appear. Obama's got some pretty silly ideas about distributing corporate profit and McCain's got some pretty practical ideas about reducing other costs - like health care.

Both of their tax-cut schemes do something dumb - they dip the country even further into debt. Obama's tax cuts land America with a cheque for $3.5 trillion. McCain, despite representing the part of 'fiscal responsibility' (another Republican misnomer), would rack up $5 trillion in debt with his plans.

Who to vote for...?

Obama's tax cuts might not mean much if the economy tanks. McCain might float your boat in other areas, like the right-to-life, national security or cleaning house in Washington.

But it's worth asking yourself when you're in the voting booth this November: If somebody offered you $1,000 in cash to vote for Obama over McCain, would you do it?

Because for 40% of Americans, that's exactly what it equates to.

2 comments:

Sasha Sappho said...

This was a really fascinating post to read. And I actually agree with you on a lot of things. I know as a young, liberal American, I should be buying in 100% to the Obama "Yes we can" hype, but I just can't do it. I still think this is yet another less-of-two-evils election. Neither candidate really speaks to the issues I'm most passionate about, so it's a matter of practicality, really. And the cynical side of me isn't sure that if Obama gets elected, he'll actually make it to a second term - for any number of reasons, some of which are rather morbid.

Anyways, here comes the obligatory angry-response-to-your-comment comment. Except without the anger. :) I actually think you made a really good point. I spend so much time in my academic, personal and professional life in the states with queer and queer-friendly people (pursuing a degree in queer studies, working at a queer paper, very much involved in the LGBT community at school and home) that I forget that not everyone is as aware as the people I surround myself with by choice. Granted, the importance that my identity plays in my life is what led me to mention it to my roommate. It was in context of the conversation - the girls were talking about whether it was worse if a boyfriend cheated on his girlfriend with another guy - and I couldn't keep silent. I got kind of analytical (although with an effort not to be TOO judgmental) on the situation. And, apparently, people on the trip had already been talking about whether or not I was a lesbian.

But I do think you have a point, about her likely not hearing much past the "i like girls" part. I don't think she was trying to be offensive, I think it was more an issue of naivete. As she's taking a class with me this semester on queer sexuality, I'm hoping we can have more discussions on orientation and identity and what not. And as I'm writing this, I'm realizing that you're right: the fact that I told her and was so open about it probably led her to believe SHE could be so open about ME with everyone else we meet. Still, mildly frustrating.

And, btw, thank you for the compliment. Here's hoping some editors agree with you that I'm a good writer, or I'm screwed come May.

(Sorry about the giant post.)

ck said...

Well while I'll admit I am not well versed in the details of this... I can't buy it.

My taxes were cut by GWB. SIGNIFICANTLY. Obama plans to cut the child tax credit I benefit from. I can't see how that helps my tax burden.

Then What you don't comment on is the folks making 20K won't get a tax cut. They will get a tax rebate. You can't cut taxes that aren't paid in the first place. They will be taking from the rich and giving to the poor. Which causes the rich to reallocate their funds so the new tax on them doesn't affect them. They are smart with money. That's why they are rich.