Obama’s Tax and Energy Policies are the Wrong Kind of Change
As I do every week, I want to thank Tim McKernan, Justin Boyd, and everyone else at InsideSTL.com for giving me a weekly forum on their site. This article appeared on InsideSTL.com on November 4. For the time being, InsideSTL.com plans on continuing their STL Politics section. Therefore, if you enjoy reading my articles on the site, please let them know. Also, please take time to read the other great articles you can find there and support their advertisers. (www.insidestl.com) While this article may seem out-of-date, it is actually more important than ever. Now that Obama is in office, we need to do everything we can to force him to keep his bipartisan promises. His selection of Rahm Emanuel and Harry Reid’s press conference stating that they are looking to strip Joe Leiberman of his committee chair position for supporting John McCain is not giving encouragement to those of us who are waiting to see how the Obama administration will govern.
The Democrat Party has come a long way since John F. Kennedy’s timeless quote of, “Ask not what your country can do for you, but what you can do for your country.” Barack Obama has mesmerized a whole section of the voting public with tales of creating a utopia if they give him their vote. Last Friday at an Obama rally, Peggy Joseph told reporters, “I never thought this day would happen. I won’t have to work on puttin’ gas in my car. I won’t have to work at payin’ my mortgage. You know. If I help [Obama], he’s gonna help me.” This line of thinking seems to explain most Obama supporters. Plenty have claimed that it would be stupid for voters not to support Obama out of pure self-interest. The problem is that Obama’s proposals won’t bring about this utopia. In fact, just his tax and energy proposals alone will only pose an increased burden on American households who are already stressed due to the impending recession.
Obama’s tax cuts, mainly benefiting those currently not paying taxes, are projected to cost the US federal government $900 billion in the first year and increase the deficit by $3.3 trillion over ten years, according to the Tax Policy Center. His current tax increase proposals will not even cover a fraction of what his new spending will cost. This is probably why no one can pin down the exact income level which will be the cutoff for tax increases. Last week, the figure started at $250,000, then Joe Biden moved it to $150,000, Obama put it at $200,000 during his infomercial, and the day after, Obama-surrogate, New Mexico Governor Bill Richardson moved the number to families making over $120,000. It moves so much because Obama’s promised tax cuts are as likely to happen as Bill Clinton’s promises were during his first campaign. While campaigning in 1992, Bill Clinton said, “The only people who will pay more income taxes are the wealthiest 2%, those living in households making over $200,000 a year.” (Sound familiar?) Despite the campaign rhetoric, Bill Clinton implemented some of the largest tax increases in history, for all income brackets, after taking office in 1993. Despite claims that the economy roared during both of Clinton’s terms, the majority of growth didn’t occur until after the 1997 tax cuts which were forced through by the Republican-led Congress. The main cut that attributed to the explosive boom in technology companies was the reduction in the capital gains tax. This made investments in small startup companies much more attractive for venture capital firms and other investors. Further proof of the effectiveness of cutting capital gains tax rates is that revenues from capital gains taxes doubled after 2003 when President Bush substantially cut them. When Bush took office in 2001, the country had already entered a recession which was only deepened by the attacks on 9/11. He got the economy growing again through the tax cuts Obama now decries.
On the energy front, Obama’s plans also fall short. The main feature of Obama’s energy proposal is his promise to invest $15 billion a year for the next 10 years for the development of alternative fuels. In the interim, he refuses to allow oil companies to drill in the most oil-rich parts of the country to offer relief for Americans at the gas pumps. Drilling would provide results well before the development of viable alternative energy solutions. Also, just the announcement of increased drilling would have an immediate negative effect on prices in the futures markets which would be realized at the gas pumps.
In a recently released January 17, 2008 interview with the San Francisco Chronicle, Obama stated, “What I’ve said is that we would put a cap and trade system in place that is as aggressive, if not more aggressive, than anybody else’s out there…So if somebody wants to build a coal-powered plant, they can; it’s just that it will bankrupt them because they’re going to be charged a huge sum for all that greenhouse gas that’s being emitted.” He even goes further by saying, “…under my plan of a cap and trade system, electricity rates would necessarily skyrocket.” At a time when Americans are experiencing increased energy prices and the economy is grinding to a halt, Obama plans to bankrupt the coal industry, which employs hundreds of thousands, if not millions, of American workers. He also plainly states he will cause home energy prices to “skyrocket.” Currently, coal plants generate 49% of the nation’s power. The impact on the coal industry will bring drastic increases in unemployment and the “skyrocketing” energy prices would severely cut into every American household’s budget. John McCain’s cap and trade system is much less aggressive by giving companies time to cut their emissions before charging them. Obama also opposes developing nuclear power plants which could create over a million new jobs and provide clean energy with existing technology which doesn’t depend on foreign oil.
Obama’s supporters urge others to vote for Obama out of self-interest. They claim he is going to give massive tax cuts, mortgage relief, and create new jobs. Democrats have based two presidential elections around distrust of a president they claim has infringed on the peoples’ rights. Now they are fully behind a man who has promised to grow government larger than the country has ever seen. Obama hasn’t earned the trust of those following him. He has refused to explain his constantly changing policies, he refuses to explain his questionable history, he has cut off members of the media who have asked him tough questions, and he has even run a smear campaign on a common citizen who asked a tax policy question after Obama approached him in his own driveway. Before voting, take pause and realize that a government large enough to give people everything can also take it away. Growing government is easy, reigning it back in is damn near impossible. Please remember this when voting.