Obama's Tax Plan: This is "Leadership"?
How much political courage does it take for a presidential candidate, who could serve no more than eight years in office, to assure America that nothing will be done about a problem for ten years?
Barack Obama’s presidential campaign said on Thursday a potential hike in payroll taxes for wealthy Americans under an Obama administration would not occur for 10 years while taxes on dividends and capital gains would be capped at 20 percent.
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Obama previously had not given a timeline for a plan he says he would consider to increase payroll taxes for people making $250,000 or more annually. The increase would be used to shore up the U.S. Social Security program.
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Obama economic policy director Jason Furman and senior economic adviser Austan Goolsbee wrote[:] “That’s why his plan would not raise any taxes on couples making less than $250,000 a year, nor on any single person with income under $200,000 — not income taxes, capital gains taxes, dividend or payroll taxes.”
While under most circumstances the thought of the federal government “not doing anything” for ten years would be music to a libertarian’s ears, some hasty stitches remain:
1. Payroll taxes already go up on many single persons with income under $200,000 — the wage cap on Social Security taxes increases automatically. Year after year after year.
2. Ten years from now is 2018. Social Security goes into deficit in 2017, based on long-standing projections. Promising to wait, not only until you’re out of office, but also until after the crisis has already begun in earnest? I ask again: This is “leadership”?
3. It is a fundamental principle of American law that one Congress cannot bind a future Congress. So neither Obama nor McCain nor any other federal politician can actually promise “not to do anything” for ten years — or ten months or ten days. Obama’s tax policy is empty campaign rhetoric that is void ab initio.
4. Obama and his advisors still, deliberately, refuse to address the question of whether higher Social Security taxes on higher-income Americans will earn them higher benefits. If so, then the cure is not a cure at all — it just bloats the program even further. If not, then the program becomes even closer to a pure welfare scheme rather than a form of “compulsory retirement savings.” No wonder Obama doesn’t want to address the issue head-on.
Filed under: Politics, Social Security, Taxation & Fiscal Policy