Wealthy and poor alike, what do you think about no taxes?

By: Peter Druckenmiller

Posted: 10/22/08

The Presidential debates are over. Anyone who followed the last debate (and probably many who didn't), became very familiar with an Ohio resident by the name of Joe Wurzelbacher or, "Joe the Plumber." Regardless of how one might feel regarding either candidate, Joe was able to get Obama to admit something he had previously denied: Obama wants to "spread the wealth around."

In all the debates, both Obama and Biden have vehemently denied any desire to "redistribute wealth" or engage in "class warfare." Both have stated that their tax plan would provide tax "cuts" to an estimated 95% of Americans. In reality these tax "cuts" would be the taking of taxpayer dollars and the giving of these dollars to non-taxpayers - or the redistribution of wealth.

Under the Obama/Biden plan, college students would be eligible for a yearly $4,000 check from the federal government in exchange for some community service, even if the college student paid no taxes. They claim that this is a tax "cut", but anyone who has ever paid taxes knows that a tax "cut" is when one pays less in taxes, not when one gets money while paying $0 in taxes.

Currently, only 62% of Americans pay any federal income tax. The remaining 38% of our population receive a 100% refund on any income tax withheld. Under an Obama/Biden tax plan, over a third of the population would receive a federal check without ever paying a cent in income tax! The average NON-taxpayer would receive a check of $1,000 or more!

Biden has said that where he comes from, this sort of policy is called "fair" and the paying of higher taxes is "patriotic." Others (who apparently come from someplace else) have objected to this sort of policy, labeling it unfair to take money from one group and give it to another. It has also been labeled as class warfare, i.e. the pitting of one economic demographic against another: the poor "us" pitted against the wealthy "them."

Obama and Biden have routinely accused President Bush of allowing the wealthy to pay little or no taxes under his eight years as President. The reality is that in 2000 (the year Bush was elected), the top one percent paid 32% of all taxes, or roughly one third. In 2008, this same group paid 40%. This is an increase of 8% and is hardly the "holiday" that Obama and Biden claim.

A further concern when raising taxes is the impact on the poor. While on paper taking money from the wealthy and giving to the poor sounds nice, history shows us that when a corporation's costs go up (as they would with higher taxes), the costs are passed to consumers in the form of higher prices. What good is a $1,000 check from the government, if the result of higher taxes is an increased cost of living by $2,000? This could be manifested in higher food, clothing, rent or any number of other costs.

An Obama Presidency will result in a more expensive world for us to live in. Whether we live in this world as college students, parents or just consumers, prices will go up across the board. This will result in an increased dependence upon the government to solve our problems. This dependence is the beginning of Obama's planned expansion of a socialist/welfare state.

The government has grown under the Bush administration for the past eight years, and under Obama it will grow at a geometric rate. Obama wants a universal health care policy regulated and run by the federal government. That would have been a tall order under the best of economic circumstances, and was proposed back in the Nineties when the economy was booming. It didn't happen. Obama and Biden have both criticized the $10 billion a month we spend in Iraq, but want us to increase our military operations in Afghanistan and South America - how much will that cost? Obama wants to reduce the deficit, increase government spending, and cut taxes? Something has to give.

The proposed tax policies of Obama and Biden won't hold up to their agenda. Taxes will have to be increased across the board to offset the higher spending. The "$250,000 and above" benchmark will have to be adjusted to include more incomes, possibly dwindling down to as low as $50,000. Then it would be the vast majority of Americans who would pay higher taxes under Obama. How would we feel about wealth redistribution then?

Martin Niemöller once said, "When they came for me, there were none left to speak out." He was referring to the Nazi's ideology of selecting one group to persecute, and laid out the Nazi progression from Communists to Jews and finally to himself. The same logic should be employed when examining the class warfare of Obama and Biden: if we allow any to be exploited (wealthy or not), then we are allowing all to be exploited.

Peter Druckenmiller is a junior in new media communication. The opinions expressed in his columns do not necessarily represent the opinion of the Daily Barometer staff. Druckenmiller can be reached at forum@dailybarometer.com.