The rich are already taxed at about 45% when you look at income and investment taxes. If we tax them anymore, they will simply move their money out of the country.
Here is an interesting article that explains how the rich are double taxes, first with corporate tax rates at 35% and second with dividends or earnings.
Do The Rich Pay Their Fair Share In Taxes?
“They real tax rate to the investor is about 45% after factoring in the 35% corporate tax rate with the 15% dividend tax.”
“Taking all this into account, it’s not at all unusual for a wealthy individual to pay upwards of 50% of their income in taxes every year. What’s more, their corporate holdings must pay taxes regardless of whether or not any of the income is distributed to shareholders. To say the rich pay a lower percentage of their income in taxes than the poor is naive at best and downright dishonest at worst. “
The recession is bringing an end to the bad spending habits of our politicians. They need to learn to cut back on spending like the rest of us. There is no more money to tax, borrow or print - that will not further weaken the economy.
Here is another interest article about the debate.
McCain or Obama? Who’ll be better for your wallet?
One commenter suggested that the current Bush tax strategy is not working and therefore we need to ‘try’ something new.
“To all the people who continue to talk about this trickle down theory: We have been trying to do this for about 8 years now and all it has done is bankrupt our country. The rich don't spend money, they save and invest it in stock. They don't create jobs, unless you count crappy low paying jobs without benefits. also, to the people who are claiming that most poor people are poor because they don't work hard enough, it's called a cyclical poverty. some people can't pull themselves up by their bootstraps, because they weren't lucky enough to be born with said bootstraps. we need to empower people and restructure the system to allow people to get out of poverty, not continue to punish them for being born into poor families. “
Obama will eventually raise taxes on everyone
Trying something new is not a sound economic strategy. Obama's economic strategy is based on spending. His current tax plan will not be able to support his plans to spend the economy out of the recession. Therefore, he will likely need to increase the taxes on everyone, while congress continue to spend money on more social programs that the country simply cannot afford.
Obama's plans will not work because the country is broke. There is no more money to tax, print or borrow for Obama to spend. Tax and spend is not a good economic recovery strategy.
Another commenter makes this observation,
"What Obama doesn't tell you about his tax plan... What Obama doesn't mention is that his proposed tax on the "super rich" includes raising the capital gains tax, which is what the federal government takes from any profits we make from the sale of stocks. ANYONE -regardless of income level- who has a 401(k), an IRA, or any other retirement vehicle is likely invested in stocks or mutual funds that invest in stocks. Obama's proposal would raise the tax on your retirement money from 15% to 33%. This applies to low income, middle income, or high income families. Again, this applies to us all.
This is not a partisan statement, merely the facts. Obama wants to implement many new government programs, and getting more tax revenue is the logical way to do it. ”
Yet another commenter makes this observation,
“Obama will increase the lowest tax bracket by 50%. Barack Obama is NOT in support of making the 2001 Bush tax cuts permanent. The Bush tax cuts lowered the lowest tax bracket from 15% to 10%, a 33% decrease. If Obama does not make that permanent, he will be effectively agreeing to increase the middle class tax bracket by 50% Obama will increase capital gains taxes from 15% to 28%, almost a 100% increase. “
My favorite comment is probably this one,
“The best candidate is one who supports taking away power from the FED and dismantling the FED altogether. For our founding fathers did not want a central bank to begin with. It was one of the reasons the colonies wanted independence from British rule who supported the idea. Too bad Ron Paul is out of the race.”
Taxes should be lowered and government spending should be reduced to reflect the resulting lower government income. But, the last thing politicians want to do is cut government spending, so they push to increase taxes. If Obama gets elected, the economy is likely to only get worse for 4-years. We need less government, not more. If the government programs have failed to help people get out of poverty for the last decade, then why do we need to create more of them?
What we really need is for the government to reduce taxes and regulations so that the entrepreneurs can rebuild the manufacturing industry to create new jobs for the next generation. The new jobs that would be created would put food on the table and give people the dignity of working for their keep. Instead of increasing the power and authority of the government, we need to reduce it and let capitalism take control. The government is responsible for creating the financial mess that we are in by inflating the housing market with artificially low interest rates – as they did in the 20’s before the Great Depression. More government is not the answer.