Thursday, October 30, 2008

Obama's tax (wealfare) plan

A conversation about school vouchers I had with a liberal friend of mine drove home the point that liberals aren’t as concerned with progress as they are with equality.

> My argument for school vouchers was that no matter how much money we throw at schools they are fatally flawed in the same way that the communist Soviet Union was: no competition. If parents were allowed to use their tax money to choose their school competition would improve the situation because greedy capitalists would fight each other over the opportunity to make schools better.

> My friend argued; wouldn’t the rich still send their kids to better schools than the poor because they would use their voucher money and personal money to send their kids to schools that the poor couldn’t afford?

Well, yes that would happen but the education that the poor received would still be superior to what they would have in the old system... It doesn’t really matter how much education improves to a liberal, it just matters that everyone is equal. Liberals feel the same way about economics, in socialist societies the poor are universally worse off than in capitalist societies, but again they focus on the inequality, not the standard of living.

Obama is no exception to this liberal view point. His tax plan is a clever way to “spread the wealth around” as he told the now infamous Joe the plumber “would be better for everyone”.

The Wall Street Journal did a great analysis of his tax plan which cleverly disguises welfare handouts as tax credits.

WSJ article: http://online.wsj.com/article/SB122385651698727257.html#printMode

I won’t go into too much detail in this post because the article isn’t very long and does a great job of summarizing. But here are a few key points that I took from the article:

• There will be 7 new tax credits not deductions so you don’t have to pay any taxes to get them.
• “The Tax Foundation estimates that under the Obama plan 63 million Americans, or 44% of all tax filers, would have no income tax liability and most of those would get a check from the IRS each year.”
• “The total annual expenditures on refundable "tax credits" would rise over the next 10 years by $647 billion to $1.054 trillion, according to the Tax Policy Center. This means that the tax-credit welfare state would soon cost four times actual cash welfare.”

With socialism spreading across America I take solace in Harry Browne’s (libertarian presidential nominee ’96 and 2000) article “Freedom in an Unfree World” where he lists four common misconceptions about government that limit our freedoms:

1. The belief that governments perform socially useful functions that deserve your support.
2. The belief that you have a duty to obey laws.
3. The belief that the government can be counted on to carry out a social reform you favor.
4. The fear that the government is so powerful that it can prevent you from being free.

2 comments:

Cicero said...

Excellent points, Paul. I like how Bastiat put it when he called social welfare, "legalized theft"

I also like your point about how they enthrone equality as the supreme principle. DeTocqueville predicted this would happen eventually in America... they would become intoxicated with equality and sacrifice freedom to obtain it.

Ruth said...
This comment has been removed by the author.