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Saturday, September 5, 2009

Point Counter Point Weekly Addresses

Let's call this particular weekly address, "Obama the Disingenuous". President Obama once again talked about how our economy was built on spending rather than saving. This is true. He also threw out a couple of minor if not decent ideas to help savings. He wants to create a way to automatically allow someone to move their tax refund into a savings bond for instance. That's fine. He wants to allow people to automatically move their unused vacations and sick days into their 401k's. That's fine, though most good savers already max out their 401k's and the others will need that money for other things. He wants to make it easier for small businesss to create 401k's though he didn't specify that.

Of course, those are minor and insignificant. President Obama claims to want to encourage people to save but there's one very easy way to encourage people to save. Eliminate or cut the capital gains tax. Most savings winds up being taxed at the capital gains rate. The best way to encourage savings is to eliminate the capital gains tax which is a double tax anyway. Yet, President Obama, if anything, will raise the capital gains tax. So, the idea that he is encouraging savings is ludicrous and totally disingenuous. He has called on the need to raise the capital gains tax in the "interest of fairness". In other words, he wants to discourage savings in the interest of fairness. For him to come out now and stand for savings is frankly cynical politics at its worst.

John Kline, from Minnesota's 2nd Congressional District, delivered the Republican response. Congressman Kline used his address to address health care reform. I've called the Democrats' health care reform package a "target rich environment". By this I mean that there is plenty to attack. The problem of course is that Kline only has a few minutes. He maximized in this address. He spoke of the folks fears that they'll wait in line, lose their coverage, and what all this spending will do to the economy. He also bemoaned the fact that Democrats have "crafted the legislation behind closed doors". He talked about a bill that's "over 1000 pages and that's convoluted and confusing." Finally, he concluded that "it simply won't work". He then said the Republicans have a plan that will drop costs, allow all Americans to keep their coverage, and allow them to be able to move their coverage when the move jobs. This is all of course talking points and he made no specific policy proposals. So, it's debateable if all of this is true.

It's not debateable that the Republicans are winning this debate and frankly it's not even close. They really don't need to bring any ideas to the table, though they have plenty. Right now, simply criticizing everything that's wrong with the Democrat's plan is enough and they are winning a huge political victory as a result.


Anonymous said...

I suppose you think its double taxation because you pay tax on income and then on capital gains when you realize profits on the wages you invested. By that logic, sales taxes are double taxation, too because you pay tax when you buy things with the money you earned after already paying income tax on it. Its a week argument in practice, really.

Less than 10% of Americans max out their 401k's, so there's plenty of potential improve our nation's tax-free savings without resorting to reckless tax cuts like the one you proposed.

mike volpe said...

Of course, the sales tax is a double tax. in fact, that's an even worse double tax. You need to earn money to buy stuff. So, the government taxes you on your earnings and on your spending. Taxes are rarely reckless. Since when is giving the people more of their money back reckless. What kind of an attitude is that?

Those that don't max out their 401ks aren't likely to put that money into their 401k. If that were the case, they'd simply have more of their money put into the 401k on its monthly schedule. The logic of Obama is off. If someone isn't maxing out their 401k, they aren't likely to use that money to put back into a 401k.

It's not like these folks can't already add to their 401k. So, why would they use this money to add to the 401k.

Anonymous said...

Um, what?