Obama's Tax Scam

We have heard it over and over and over from the Obama campaign: "We will reduce taxes for 95% of Americans". This is the classic Democratic populist promise going back to LBJ's "Great Society". Who does not want a tax cut, who does not want to feed the poor, who does not want to take care of the elderly, who does not want their college tuition paid for? All of these are the classic Democratic promises. But there are some subtle mistruths in Obama's "tax promise":

1/ 40% of Americans do not pay income tax, so they cannot get a "tax cut". What they will get is a $500-1000 welfare check from the government. A welfare payment provided from the earnings of other Americans. The Democrats argue that these people DO pay taxes since they are charged payroll taxes on their job. What they don't say is that these payroll taxes are the employees contributions toward Social Security and Medicare when they retire...and their employer matches it. Anyone that studies our Social Security system can easily see that if this person is an average (or below average) wage earner who retires at age 65 and lives a normal life span, those payroll taxes paid in, will never even cover their Social Security and Medicare expenses.

So in summary - Under Obama's plan 55% of Americans MAY get a tax cut and 40% will get a welfare check provided by other Americans.

2/ Obama proposes to raise the Capital Gains tax to 29% from the existing 15%. More than fifty percent of Americans invest in the stock market, and if they trade stocks, many of those "95%" will get a tax increase.

In addition, a little known "proposal" of Obamas that will never be talked about during an election season is to eliminate the $500K exclusion for married couples when selling a house ($250K for singles). Instead, sellers would simply pay Capital Gains tax on all of their profit from selling a house.

Other tax proposals talked about by the Obama campaign:

- Obama may let the estate tax law expire, so it will revert back to a one million dollar exclusion, and after that inheritance taxes will increase to 55%. Good luck if your family owns a business, farm, or real estate in any metropolitan area of the country.

- Obama proposes a "windfall" profit tax on corporations. I was President of three different corporations during my career and believe me, any "windfall" tax will simply be passed on in the form of higher prices to the "95%" that he claims to represent. Corporations are responsible to provide a return for their shareholders. If they don't do it, the shareholders will go somewhere else.

There is also a cultural effect in play here. Even though we would all like a tax cut, many Americans; even those that are not so fortunate (yet); have a problem with the redistribution of people's income to other people that haven't earned it. This is so basic to American culture, I predict Obama's comment to Joe-the-Plumber about "spreading the wealth" may come back to haunt him.

So even though things look good for Obama right now, I am an optimist and believe as we get close to the elections, "smart" Americans will see through the Obama tax scam; even though he probably has the "not-so-smart" vote locked up.