I'm a Pundit Too

Thursday, December 13, 2007

To Raise Or Lower Taxes? That Is The Candidate's Question

The Democratic candidates for president participated in their final debate before the Iowa caucuses on January 3. One by one the candidates echoed each other in the need to raise taxes and to having no desire to balance the budget. The Republican candidates were on hand yesterday to debate the issues. Their common theme was their desire to cut taxes and to cut federal spending. Last week I covered the candidate’s positions on illegal immigration. This week as we discuss the issue of taxes and spending, the deep divide between the two parties becomes even clearer. From the left side of the political spectrum we are promised higher taxes and no promises on controlling spending. From the right we hear promises of lower taxes and spending cuts.

The majority of the Democratic candidates spoke of raising taxes on the “wealthiest” of Americans and on “big” corporations. Only New Mexico Governor Bill Richardson mentioned his desire to pass a constitutional amendment to balance the budget, and to eliminate Congress’ earmark addiction. The Democrats promise to raise taxes on the rich and corporations make for great headlines for those susceptible to class envy, but reality will be a much different story. The simple truth is that for every dollar that a president or Congress taxes a corporation, the same corporation will raise the price of their product or service. In simple non-intellectual terms, a tax hike on a corporation is a tax hike on all those who buy that corporation’s products. The idea of raising taxes on the rich is not a new one. It is the same tired campaign rhetoric that has been used for at least the past 35 years. If Bill Gates receives a tax hike, while you still pay the same amount, how has your life improved? Do you have any extra money in your pocket? Or do you just feel better that Gates is paying more now?

The Republicans preached against the overspending of the government. I do find it ironic that many of the candidates have been in Congress who has control of the federal purse strings. Former Massachusetts Governor Mitt Romney specified several areas of the federal budget that could be cut. He highlighted 342 economic development programs with oversight by different departments. His point was that we do not really need 342 economic development programs. Obviously all 342 programs are not working, but in government failure means more money. Government programs are like taxes. Once they are created and on the books, they are never cut from the federal budget.

Both the Republicans and the Democrats in Congress have allowed federal spending to gorge on our tax dollars. The Democratic candidates have decided that the best course of action is to continue spending like a drunken sailor and make all of us pay for their perceived intellectual superiority. The Republican candidates have come to the realization that if you spend more than you have, you are left with 2 choices. Acquire more money, meaning tax the public more, or decrease your spending. When it comes to the federal budget and taxes, you have to decide if you agree that federal spending is fine and we are just under taxed; or if we need to reign in federal spending and we could all use more of our own money. The differences in the 2 parties are clear. With which candidate do you believe is correct on the budget and taxes?

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