Blue Collar Muse

Robert Romano at Americans for Limited Government has an excellent piece on the effectiveness of Obama’s proposed tax plans.  You’ve been bombarded with TV ads telling you Obama will cut taxes - even more than McCain.  It’s only necessary (and fair) to raise taxes on the top 5% of earners to generate enough Government revenue to effectively “spread the wealth around.”  The question, ‘The $5 Trillion Question’, is, will it work?  Let’s see Bob’s take on the issue …

THE $5 TRILLION QUESTION
-by Robert Romano,
Editor ALG News Bureau
Americans for Limited Government

A lot of attention has been placed in recent days to Barack Obama’s plans to raise taxes on the top 5 percent of wage earners. The Illinois Senator assures the American people that he, as President, will not raise taxes on everybody else—just those at the tippy-top of the income spectrum.

Never mind that upwards of 38 percent of Americans do not even pay income taxes. Or that the top 5 percent of wage earners are employers and investors who contribute significantly to the economy.

Let’s simply consider the claim that, somehow, only the top 5 percent are going to have their taxes raised. As my favorite arithmetic teacher would say, “Let’s do the math.”

The federal budget for Fiscal Year 2008 wound up being $2.98 trillion, with a deficit of $454 billion. For the sake of argument, let’s add to that the $850 billion bailout package that Congress enacted on October 3rd. After all, it was conveniently passed just three days after the annual deficit was calculated.

Again, hypothetically, let’s also assume that the Treasury makes no money back on the Troubled Asset Relief Program. Then the total budget for the year would jump to $3.93 trillion, with a deficit of $1.3 trillion.

Let’s also assume that, for the sake of argument, the budget does not shrink next year. After all, the federal government did just acquire about $5 trillion in risk from Fannie Mae and Freddie Mac. It stands to reason that in these troubling times, some of those debts are going to go sour, and there will be more bailouts next year. So, let’s assume the same amount just to keep things simple.

Now, methodology aside, Senator Obama is proposing approximately $1 trillion in new federal spending. You know, all those new welfare entitlement programs. Whammo. The budget then jumps to $4.93 trillion—nearly a whopping $5 trillion!

So here’s the $5 trillion question: Where does the Senator think he’s going to get the money to pay for all of that new spending?

Read the rest of Bob’s excellent piece at ALG …

Blue Collar Muse

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