Moving Forward

Now that the election is over, I believe that we need to support our President, and pray earnestly for him, and hope that he keeps his promise of listening to all sides and making only decisions that benefit the country, regardless of their origin.
While I will keep this promise, I wish those who know me to know that supporting someone who you care about, and I care about the leader of our country whoever he or she may be, means that you owe it to them to help them through decisions by showing them where they’re mistaken, and what they can do better. I may from time to time get a charge out of telling you “I didn’t vote for the guy!” when you vent about a particular issue he may frustrate you on, but please remember that unlike some of those who disliked our current President, I place country before political affiliation.
A lot has been said this election about “Change”, a word being used to invoke the feeling that ‘change’ is always going to be good, and every time I hear that word I think back to the days when I was studying Physics and I was trying to learn the mathematical definition for the word “acceleration”.
When most people talk about acceleration they are talking about moving faster in the direction they are going, and they use an alternate word called deceleration to talk about slowing down in the direction they are going.
In the language used by mathematicians the word acceleration means any change in speed whether you are going faster, or slower, and any change in direction is considered an acceleration.
My point being that a Physicist isn’t content to merely call something moving faster, he starts at a point where the object is and then goes on to examine how the object is changing speed, and position, and much like a Physicist I’d like to examine the topic of “Change” with a more honest and in depth look at the potential speed and direction this “Change” may take.
Obama has promised quick economic solutions, which will be a high priority with the country projected to go into a recession, much like the recession that met George W. Bush when he was about to enter the White House eight-years ago.
One of the things that the government can do to improve economic stability is adjusting the restrictions that they put on businesses. Another way of impacting the economy directly is by the countries tax policy. Obama has already promised to address this issue through taxes, so in this segment lets examine what he proposes.
President-elect Obama promised early in his campaign to stimulate the economy by returning to the pre-Bush tax the rich policy, and by lowering the taxes on those who make less than $250,000 per year. Those who make more than $250,000 who will henceforth be called ‘the rich’ represent 5% of the population and those who make less than a quarter-million dollars a year will henceforth be known as the middle-class.
A quick look at the pre-Bush tax situation shows about 1% of the population paying 29% of the taxes and the top 5% paying almost half of the nations taxes. Further scrutiny shows the top 20% of wage earners paying for more than three quarters of all the taxes. The bottom 40% of the population pays next to nothing, with some even receiving money that they never were taxed, which leaves what I’d like to call the middle-class, the 40% remaining who pay about one-fifth of the tax burden.
Barack Obama’s plan calls for rescuing social security, health care for most Americans, and a return to the days of a balanced budget- oh, and we’re going to be environmentally friendly, while reducing our dependence on foreign energy. His solution is simply to cut taxes for the middle class, who by his definition of middle-class pay over seventy percent of the taxes, and by pulling out of Iraq, umm, eventually. Ahh, yes and by increasing the taxes on those who are not middle-class.
That is a really tall order when you consider that the $600 Billion dollars we’ve spent on the War in Iraq so far, pales in comparison to the over $400 Billion we spend every year just paying interest on the national debt, and when you consider that the national debt has gone up by almost four-times the amount spent on the Iraq war during the period of time in question, you can see that it will take far more than an exit strategy to get the economy and the debt back on track.
The problem with the ‘tax the rich’ strategy is that it doesn’t increase long-term tax revenue, it simply increases long-term tax rate, with a small immediate revenue boost that generally ends with a Carteresque recession. What do I mean? Every time the top tax rate has been cut, those ‘rich’ people benefitting from the cut ended up earning so much more money putting their wealth to work, wealth that government wastes, that the revenue produced was more than under the confiscatory rate that was replaced. Under Kennedy (the last Democratic candidate to cut taxes), Coolidge, Reagan, and Dubya, the top tax rates were dramatically cut and tax revenue increased within a few short years. In the case of Reagan rates were cut from a criminal 70% to 28% and the tax revenue increased by more than double by the end of the decade.
Lets get back to Obama’s plan before I start preaching the virtues of the National Sales tax, and completely offend those who believe success is something to be punished and apologized for.
Obama and his advisers quickly sized up the situation, and his stance changed as the election wore on as advisers changed estimates and the plan became more convoluted. It stands now with those who make more than $250,000 giving up 39% of their income, with a capital gains tax increase of 13%, again taxing success.
Here is the hidden lie, or the unspoken truth, depending on how you choose to look at it. Obama promises a tax increase on the ‘rich’ and a tax cut for everyone else, his tax cut isn’t a rate cut, but a $500.00 per worker tax credit for those who make less than $250,000 and a $4,000 dollar tax credit per child in college for those who make less than $150,000.
So basically, except for the period of time someone with children has when that young adult is in college, a person earning $50,000 dollars a year will receive a $500.00 ‘tax cut’. The outright lie about this being a ‘cut’ is that Obama’s plan calls for the Bush tax cuts to end which will cause the tax rate to go back to the one that was in place during the Clinton administration which will cost someone making $50,000 per year $1,500 more than he is paying now. Also Obama’s capital gains tax increase will further worsen the credit crunch by giving a further lack of incentive to people who wish to explore investing or saving money.
My advice to President-elect Obama is:
*Allow those who put people to work (I’ve never worked for a poor person!) to benefit from success, which is one of the founding principals of this country by either making the Bush tax cuts permanent, or exploring the Fair Tax proposal.
*Eliminate the Capital Gains tax to enable even those without millions to benefit from investing and saving.
*Cut spending, and decrease the size of the federal government. The more money they take the more they waste, you won’t find a private contractor spending a thousand dollars installing a toilet seat!
Thank you all for your time and patience, and God Bless America!
- Brendan A. Kokinda
American Citizen