Wednesday, September 24, 2008

It seems like most articles I have read in the past several days all address the failure on Wallstreet and the potential for a Washington bailout. So rather than continue to add more links to articles that point fingers or provide solutions, I figure I would just write a little something.

Unfortunately, I great deal of the American public is being fooled by the Obama campaign's pledge to lower taxes on the middle class (while raising taxes on the "rich"). Obama claims that he will lower taxes for 95% of American families. In actuality this may be true, Obama's tax plan could reduce income tax rates on the middle class. However, this is where liberal "logic" stops.

While Obama preaches that he will protect the middle class by providing tax cuts, he also says he will punish those big, bad corporations like the evil oil companies by raising the corporate tax rate.

First of all, I constantly hear democratic politicians chastizing the greedy oil companies for their outlandish profits. Since when should their be a limit to a company's profits? Companies should be allowed to be successful but not too successful? What about Hollywood? Is Congress going to step in and say the movie-making industry is too profitable therefore we have the right to confiscate some of their earnings? Isn't that the point of capitalism... for companies to make money and to make as much as they can? It is easy to get upset at oil companies who many think are exploiting the consumer. But just like any other industry, the consumer can refuse to buy the product. Yes, I know gas in considered a necessity, unlike going to the movies, but when people become unsatisfied with a product they begin looking elsewhere, opening the door for innovation and cheaper alternatives (ie. new technologies or more fuel-efficient cars.)

Staying on point, raising corporate taxes will not punish greedy corporations as Obama suggests. This is where the average American with a limited understanding of the economy is left disillusioned. Every business sets necessary profit margins. These profit margins must be met in order for companies to stay in business. Higher corporate tax rates do not change this truth. If a company is taxed more, they must do something to compensate for their loss. Namely, raise the cost of their product. This means that higher corporate tax rates are not paid for by the businesses but by the consumer who now must pay a higher price for goods. So the thousand dollars that may be saved by middle class families from income tax cuts will prove completely meaningless when the cost of living increases due to higher corporate taxes. Don't be fooled, middle class Americans. This is simple economics...simple economics that Obama must not understand or simply is trying to disguise. No one will benefit from Obama's "tax cuts."