Obamarithmetic

Listening to the first of a series of debates between presidential candidates Barack Obama and John McCain, I was struck by the apparent level of ignorance displayed by Barack Obama, particularly when it comes to numbers. Not that John McCain’s conversance with American tax policies were that much better, but at least there appeared to be some level of understanding of the inverse relationship between national prosperity and a crippling tax regimen.

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Barack Obama claimed that the “middle class” would not see any increases, while the evil rich would pay through the nose in additional taxes. Now, please understand that I am not among the ranks of the evil rich, but I have made an effort to research who pays what in the United States, something that Mr. Obama obviously hasn’t had time to do. Using the Internal Revenue Service’s own numbers (which are pretty shocking) it appears that the top 1% of earners in the US, those individuals whose tax returns reflect an income in excess of $388,000 per year currently pay 40% of all personal income taxes collected by the US government. It gets better. The top 10% of earners, those with annual incomes in excess of $250,000 per year now pay 71% of all income taxes collected by the treasury. In fact, 50% of American taxpayers pay 97.1% of all personal income taxes, while the other 50% pay a measly 2.9%. So, what exactly is in Mr. Obama’s plan to make the lot of the vaunted “middle class” any better? Is he going to start taking cash directly from half the nation’s taxpayers and transfer it to the accounts of the other half? During Friday night’s debate Obama pledged to punish the rich for being smart, working hard and creating wealth by increasing their taxes to ever greater heights. Not only that, he also wants to increase corporate tax rates, which in the US are currently in the 35% range so he can increase program spending and buy more votes. Only problem is anyone advocating such a move doesn’t have a solid grasp of mathematics as in this age of globalized economics, more jobs will wind up being exported to countries such as Ireland where corporate tax rates are in the 12% range. Received wisdom and historical data confirm that low corporate taxes increase the number of available jobs, attract investment and increase wealth, thus increasing the amount of money government has available. But Obamathematics dictates the opposite. Never mind that the Organization for Economic Cooperation and Development has ascertained that a decrease in corporate taxes has a stronger and more positive effect than a similar decrease in personal taxes. Obama wants to run counter to the prevailing wisdom by punishing corporations and the rich. While the Democrats keep attempting to link McCain to George W. Bush, a strong case could be made for linking Obama to Jimmy Carter, who until now is arguably the worst president the US has ever had. It’s possible that if Obama wins this election he will save Jimmy Carter from his ignoble legacy by making him the second worst president the US has ever had. Maybe a four-year stint under the leadership of someone like Obama will give Americans an understanding of the implications of electing politicians that run on little more than a promise of hope and change.