First Campaign Promise Rescinded

http://thecaucus.blogs.nytimes.com/2008/11/23/obama-considering-to-delay-tax-increase/

And so it starts; the first Obama campaign promise has been rescinded. Throughout the campaign, Obama talked of ending the Bush tax cuts for those making $250,000 or more. It looks like Obama is finally coming around to the fact that raising taxes on the top earners in the economy (you know, the ones who own businesses and physically create jobs...the ones who move this country forward) is a bad idea.

There are a couple points to make here; the first is John McCain and the Republicans should feel pretty good about themselves today. All through the campaign, McCain said raising taxes on the upper class at this time would be disastrous for the economy. Obama initiated a form of class warfare in terms of the tax code and tried to tell us it was "fair" for those making more money to pay a bigger percentage of taxes and that it would actually help the economy if those making more paid more taxes. Apparently not! Why would anyone want to excel economically if they were just going to be punished for it? Instead, they could do less work, take less risks, and possibly make more money (or at the very least, be taxed fairly). Less risk is not a good thing for any economy, let alone for those who want job creation.

The second point is more interesting; if raising taxes on the upper class is a bad idea in a time of recession, doesn't that mean doing so when the economy is good will push the economy back into a recession? I think Obama has some more work to do still.

Putting this tax issue aside, I think a much bigger question for the economy is not how tax dollars are raised, but rather how money is created. If businesses are allowed to thrive, not only will we export more, produce larger tax revenues for the government (I'm sure you won't read it on-line, but government revenues have SKYROCKETED under Bush due to his tax policies), and create jobs, but more money will be kept here in the United States (where we want it). The Obama team needs to focus on getting more money into our system. That means rewarding those with money so they try to make more of it (and put it in banks where the government gives them interest, thereby putting more money into our system) and rewarding ideas that will increase our exports, pulling more money from the rest of the world into our borders.

Until we meet again, goodbye!