Sunday, October 26, 2008

Weekly Opinion/Editorial
by Steve Fair

"Joe the Plumber" has come to define the 2008 Presidential campaign. Unless you have been asleep the past week, you know that Barack Obama’s conversation with Joe Warzelbacher dominated the last presidential debate and much of the political discussion the past week.

At a campaign stop, Joe asked Obama about his tax plan. Joe, who is trying to buy the small company from his employer, said it looked like Obama’s plan would tax his small plumbing business and hurt the company. Obama didn’t deny his plan would tax Joe, but told him he wanted not only Joe to prosper, but also all those standing behind him. "We need to redistribute the wealth," Obama said. When Obama used that phase, bell, whistles and alarms sounded. Was he advocating socialism or worse communism? Karl Marx, the founder of communism said, "The history of all hitherto existing society is the history of class struggles." While anyone who has been paying attention knows that most liberals are socialist in varying degrees, what Obama was really advocating was "Statism" which is state intervention in personal, social and economic matters.

Here are the problems with socialism/statism and the whole concept of redistribution of wealth.

First, redistribution of wealth rewards people with no ambition or sense of responsibility. If you plan to re-distribute the wealth to everyone, regardless of their work habits, productivity or ambition, no incentive is provided for a person to work hard or put forth any extra effort. The "American Dream" has always been to work hard, save your money, and get ahead. The chance to "get ahead" draws millions across our southern borders each year. The reason we have an illegal immigration problem in the United States is because our economic system rewards ambition and responsibility. You take that incentive away and you will have less productivity and poor morale.

Second, redistribution of wealth is not a biblical principle. Scripture calls for private ownership and private rewards. It calls for the accumulation of good things tempered with the giving from those things to help other people. Scripture calls for diligent individuals to work and be fruitful. Christians are to exercise love, mercy, and charity according to their faith towards God. We have already delegated a majority of the work of the church to government- i.e. welfare programs. As that continues, government gains more and more control of our lives and groups rights opposed to individual rights, commonly seem in an atheistic government prosper.

Some socialists use the parable of the workers in the vineyard in Matthew 20 as an example the Bible teaches socialism. I must admit this passage always seems unfair to me. Why should folks who have worked different hours be paid the same wages? We live with a very strong sense of what is "owed" to us and that is the spirit that Jesus challenges with this parable. What we should see in this parable is that we should simply serve and leave everything up to Him. He is not teaching socialism- he is teaching faith.

Third, redistribution of wealth places the power in the hands of government, not the individual. That’s what statism is. Government already has more control than it should. Decentralized economic activity at the level of individuals and private organizations in a free market produces superior economic results. If socialism, statism and communism work, then why was it that the USSR had similar class divisions as capitalist countries? Free markets work when they are allowed to function in their purest sense. Granted capitalism- in and of itself- is not a charitable system, but the most generous people in the world live in capitalist countries.

I support a fair tax not just because of the name. The FairTax plan is a comprehensive proposal that replaces all federal income and payroll based taxes with an integrated approach. The components include a progressive national retail sales tax, a provision that would allow the poorest among us to pay not federal tax, and the repeal of the 16th amendment. That’s the one that created the IRS. Sometimes known as a "consumption" tax, this national sales tax would be revenue neutral, meaning it would not disrupt the services government currently provides for the citizens. It’s simpler and has the support of a number of lawmakers in Congress.

Not surprisingly, Obama does not support the Fair Tax plan, but it is surprising Obama does not support the free market system. He has personally benefited from capitalism. Obama is living the American dream- from rags to riches- so why is he trying to keep others from living it? Because he’s a liberal and the liberal’s creed is to tax the rich and give the money to the less deserving. Under Obama’s plan, he will enslave a people that will look to the government for prosperity. They will look to the government for advancement. A fundamental principle that must be understood is that government produces nothing- government consumes.


DavidFL10 said...

I do not support Obama for president. I am a Libertarian and therefore support Bob Barr. But someone needs to correct the record here. The thousands of bloggers and commentators I keep seeing who misquote what Senator Obama said to Joe the Plumber (you have actually put quote marks around the misquote) are either ignorant or lying. You really should listen to the whole exchange before writing about it. There was a six minute exchange where Obama tried to answer Joe's question, but Joe wasn't even listening--he was clearly thinking about how to phrase his follow up questions.

If you won’t take the time to hear it for yourself, I’ve pasted the often misquoted paragraph for you. Obama had just said: “But another way of looking at it is, 95% of folks who are making less than 250, they may be working hard too, but they’re being taxed at a higher rate than they would be under mine. So what I’m doing is, put yourself back 10 years ago when you were only making whatever. 60 or 70. Under my tax plan you would be keeping more of your paycheck, you’d be paying lower taxes, which means you would have saved down to the point where you (inaudible). Now look, nobody likes high taxes. Of course not. But what’s happened is that we end up – we’ve cut taxes a lot for folks like me who make a lot more than 250. We haven’t given a break to folks who make less, and as a consequence, the average wage and income for ordinary folks, the vast majority of Americans, has actually gone down over the last 8 years. So all I want to do is – I’ve got a tax cut. The only thing that changes is I’m gonna cut taxes a little bit more for the folks who are most in need and for the 5% of the folks who are doing very well - even though they’ve been working hard and I appreciate that – I just want to make sure they’re paying a little bit more in order to pay for those other tax cuts. Now, I respect the disagreement. I just want you to be clear – it’s not that I want to punish your success – I just want to make sure that everybody who is behind you – that they’ve got a chance at success too.”
After a break in which Obama poorly answered Joe’s follow-up, he said: "Because my attitude is that if the economy’s good for folks from the bottom up, it’s gonna be good for everybody. If you’ve got a plumbing business, you’re gonna be better off if you’ve got a whole bunch of customers who can afford to hire you, and right now everybody’s so pinched that business is bad for everybody and I think when you spread the wealth around, it’s good for everybody. But listen, I respect what you do and I respect your question, and even if I don’t get your vote, I’m still gonna be working hard on your behalf because small businesses are what creates jobs in this country and I want to encourage it.”

You may disagree with the economic philosophy, but to claim, as the opposition is claiming, that he is talking about taking money from the middle class to give it to those with no ambition is absolutely false.

Obama repeatedly says he is going to give a tax cut to 95% of working American families. Some on the far right keep calling that an obvious lie because their math proves it to be impossible. Radio people and their followers make the claim all the time that only 60% of Americans pay Federal Income Taxes without mentioning that every American with a legal job pays payroll taxes. Their less knowledgeable followers misunderstand that to think 40% pay no taxes to the federal government at all.

One thing I like about the FairTax is that it erases the myth that if you don't pay "Federal Income Taxes", you don't pay taxes to the federal government. Please note the similarity between what the prebate of the FairTax does and the $1000 rebate to every American with a legal job proposed by Obama. Some conservatives are opposed to both. Some conservatives don't see the similarity and only object to the one proposed by a Democrat. Some conservatives, those more interested in power than in solutions, see the similarity and lie to their followers in an effort to keep them from seeing it.

R. George Dunn said...


You being a libertarian must understand that by Obama redistributing the wealth creates a vacumn of disenfranchizement that leaves no one wanting to work. Such a system is not the approach we need.

The Fair Tax Plan does have a progressive aspect to it that is a bit like spreading the wealth, but it does so equally, to everyone. The current production tax system to which progressively destroys the want to grow employment by penalizing income causes corruption and makes for loopholes for making Kings, while taxing the middle class more and more. Obama will rasie the tax on a middle class income by at least 7 thousand dollars.

I agree totally with Steve here.

DavidFL10 said...

In her famous novel, Atlas Shrugged, Ayn Rand expertly detailed what would certainly happen in a country that went to the extreme of attempting to "spread the wealth around". You are correct to say that should any administration make such an extreme attempt, it would indeed leave no one wanting to work. That is not what Senator Obama's plan calls for. That is a straw man misrepresentation of what he has proposed.

The only portion of his tax plan that could be linked to such an attempt is when he talks of an annual $1000 rebate to all Americans with a legal job. This has some promising aspects similar to the FairTax proposal. It encourages low end workers with the option of working under the table to be honest. It excludes illegal aliens, and it compensates (in rare cases, overcompensates) struggling low income workers for the payroll taxes withheld from their paychecks.

Independent, even conservative, economists have looked at both plans and acknowledged that of the two tax propositions (sadly not including the FairTax in the mix), the people I consider to be middle class (40K - 200K income) will fair as well or better under Obama's plan. The only way any of them conclude McCain's plan is better is by using the controversial supply side economic model that says if you let the wealthiest Americans keep more of their income, they will create more jobs. I personally believe that coorelation is far less than 1:1, and breaks down entirely at some income level.

I suspect we three would all agree that the spending proposals of both candidates would be horrible -- and Obama's worse. But where do you get your numbers that a middle class person would see a 7k rise in taxes under Obama’s plan? There seems to be no consensus as to what middle class means, except it almost always includes the speaker. What income level do you consider middle class? To get to the 7K figure, are you counting the expected rise in the threshold for payroll taxes both major party candidates acknowledge will likely be needed? If you accept, in this calculation, that payroll taxes count, do you concur with my point above that they should always count when discussing federal taxes?