Artorius Castus

Entitlement 2008

Posted in Uncategorized by Patrick Truax on November 13, 2008

It is true that Barack’s electoral landslide was due largely to dissatisfaction with the current administration, and a desire for change. One thing has been overlooked, however, when dissecting the polls post November 4. The promise of a tax cut for 95% of the electorate, while 40% of that 95% doesn’t pay any taxes to begin with.

Raising taxes on the highest income bracket to fund a middle class tax cut doesn’t make sense;the top bracket are the ones who employ the middle class. It seems to some that cutting 10% of federal taxes from the middle class and the problem should take of itself.

“Cutting taxes works”, a colleague emailed me, “when folks have less money coming out of their paychecks, they are keeping a little more for that IRA, vacation or college savings account, or they are out the mall spending it. All of these are pathways to the Federal coffers, and it is earned while taking less from the taxpayer.”

Indeed, a lot of entities and companies will reap a tax windfall at the expense of others. For example, President Elect Obama has already said his administration will raise taxes on coal companies and give the money in the form of credits, or tax breaks to companies who build solar panels or devise new ways of producing energy.

Lower income families and communities will reap a tax cut on taxes they aren’t even paying. Meaning the refunds they get will be bigger at the expense of a taxpayer who is employed in the middle class by someone in the top income bracket. This, in turn, threatens the middle class when the top wage earners start laying off the middle class. But that 40% will continue to collect refunds, while the middle tax files for unemployment.

Whatever the outcome of Entitlement 2008, one can rest assured that the Tax Code will look a lot different next year, if not a little lopsided.

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