Fun With Numbers: Barack Obama's Tax Proposals

All right, now that I have had a chance to read some of Obama's advisor's explanations of the plan as well as him defend it on the O'Reilly Factor, I am ready to analyze the plan in the best way possible, by the numbers. Let's look at some of the most important numbers in Barack Obama's tax policy.

1)95

That is for the 95% that Barack Obama claims that will receive tax cuts under his plan while the other five percent receive a tax increase. Now, first of all, this 95% figure comes directly from his own campaign. There is no way to fact check such a number because the number is entirely a projection. Here is what we know. Barack Obama plans on raising the top two tax brackets, the capital gains tax, the payroll tax on anyone making 250,000 and more, and re instituting the inheritance tax. We know this, and so that 5% figure depends entirely on very few people earning a lot of money, investing a lot, and dying. If of course, we have a lot of people that make a lot of money, invest a lot, and die, then that 95% figure is nothing more than a campaign slogan.

2) 40

That is for the percentage of the population doesn't pay any taxes at all. Under his plan, these folks will get what he considers a tax cut, though you can't get a tax cut if you pay no taxes. These folks will get a government welfare check. Barack Obama is fond of saying that 95% of the population will get a tax cut. Of course, that isn't entirely accurate. Let's extrapolate using Obama's projections. Five percent of the population will get a tax increase, 55% will get a tax cut, and the other 40% will get a government welfare check. What Barack Obama is really proposing is no different than an expansion of welfare, food stamps, and unemployment insurance. In other words, he is proposing that nearly half the population now become even more dependent on the government to survive. Talk about a disincentive to work. Here is someone making 25k per year. They pay no federal taxes at all, except payroll taxes, and they will get a thousand dollars from the government each and every year. What Barack Obama is proposing is no tax cut but rather a massive expansion of the welfare state.

3) 1 trillion, 120 billion, 100 billion, 780 billion
1 trillion

That's approximately how much all of his spending proposals will cost yearly. Whether it is these wefare checks, universal health care, infrastructure improvements, better funding for No Child Left Behind, and mortgage bailouts what we have are new government programs that will cost a lot of money. He wants to provide health insurance to 47 million people that currently can't or won't get it on their own. He wants to revolutionize our transportation system and beef up funding for NCLB. All of these things cost money, a lot of money. They cost a lot more than he pretends they will cost. Here is how the costs break down so far.

$65 billion-a-year health plan $15 billion in green energy spending
$85 billion in tax cuts and credits A $25 billion-a-year increase in foreign aid
$18 billion a year in education spending $3.5 billion for a national service plan

We still have no idea how much he is going to spend on renovating our highways, No Child Left Behind, or for the next round of mortgage bailouts. Furthermore, these are his estimates. Does anyone really believe that it will only cost 65 billion a year to provide 47 million people insurance they either can't afford or won't get on their own? Eighteen billion dollars in education spending is only about $300,000,000 million in increase per state. Does anyone really think that's all it will take? Furthermore, he will have a majority in each house and even possibly a veto proof majority in the Senate. How much will Obama, Pelosi, Reid et al spend in pork? The reality is that Barack Obama believes that every answer can be solved by government spending. That costs money and in reality his spending increases will be more like a trillion dollars yearly. Here is how Dick Morris put it.

Now the election will hinge on a referendum on Obama. Is the extra healthcare coverage he would pass worth the huge tax increases he will impose? Nobody buys his claim that he will only increase taxes on a few rich people and give the rest of us tax cuts. Voters can add, and they realize that his spending plans and tax-cut promises come to a trillion dollars and that his tax increases represent only one-tenth as much. They know that everyone who pays taxes will end up paying more if Obama is elected. The question will be: Is it worth it?

120 billion

Barack Obama is fond of saying that he will pay for all of this stuff by ending the Iraq War. The Iraq War costs about 10 billion dollars monthly or 120 billion per year. Furthermore, he plans on increasing our presence in Afghanistan. Thus, some of the money saved in Iraq will be tansferred to Afghanistan.

100 billion

He also says that the tax increases on the wealthy will pay for it. Of course, that would bring in an extra 100 billion in tax receipts tops. Furthermore, it is impossible to know how such a tax increase will affect the economy. Often, tax increases stunt the economy so much that they wind up bringing the government less in tax receipts. As such, these numbers are entirely projections. As O'Reilly pointed out, government tax receipts went up 20% after the Bush tax cuts. Counting on extra taxes from the rich to pay for a trillion dollars worth of spending increases is fool's gold.

780 billion

Thus, what we have is about a 780 billion dollar yearly shortfall. How does Barack Obama plan on paying for it? He doesn't say because he pretends it doesn't exist. He claims that nebulous government actions like closing tax loopholes (the IRS tax program is about 65,000 pages so good luck), cutting wasteful government programs, and other efficiency matters will do the job. These sorts of proposals have been promised by nearly every administration since I have begun following politics. So, as soon as his spending increases cause an explosion in our deficit, we'll see just how many of that 95% actually get a tax cut.