Monday, July 28, 2008

At the risk of being called a racist, my criticism of Barack Obama continues. I don't seek ways to criticize, I simply read stories and respond:

Today, he announced an economic plan that would increase taxes on those families making over $250,000 a year, and cut taxes for those making less than 150K. This has me a little confused because back in June he announced this exact plan but stated it was his way of fixing Social Security, basically increasing the payroll tax for those who make over 250K. So, if you make over 250K a year it appears that Obama will raise BOTH your income tax and your FICA taxes. Ouch!

He calls it the "trickle up" effect, and seems to believe that cutting taxes for the middle class will somehow stimulate the economy. Wow.

This in light of the fact that the top 1% of US income earners pay 40% of the nation's income tax revenue, and the top 25% of income earners pay 86% of the revenue, while the bottom 50% of income earners pay only 3% of America's income taxes. For some reason Obama sees this as unfair (and, in a way, he's right) and wants to change things so the "rich" pay MORE!!!

As a side note, since I am in the medical field, I think it's worth saying that if a hypothetical physician sees too many patients he/she runs the risk of falling into Obama's "wealthy" classification. Basically, he will give that doctor incentive to decrease the work load since it will be way too costly otherwise. Sure, that doctor wants to serve his patient population, but this can't happen if it's financially detrimental. This is just one example of why these kinds of taxes don't work. For some, it could lead to cutting patient enrollment. For others, maybe it's cutting jobs, or downsizing operations, or postponing any plans for expansion. There IS a point where the financial gain is overshadowed by the "penalty" of taxation.

In addition to these taxes, he has also previously stated that he will DOUBLE the capitol gains tax and place a windfall profits tax on large corporat profits, namely the oil companies. Anybody who knows even a little economics should now be terrified of a Barack Obama administration.

Here is what will likely happen if Obama does the things that he is proposing:

First, small businesses will fail. These are the folks who fall in the 250K category. They fit Obama's description of wealthy, but are hardly super-rich. Small business is a major driving factor in our economy, and a major employer as well. So you can imagine what will happen when they are squeezed from both ends of Obama's tax plan. Couple that with the recent minimum wage hike and you have the perfect storm for America's small business. At best, they cut jobs and unemployment goes up. At worst, the business folds, the jobs are lost and the local economy takes a hit.

Then, the windfall profits tax kicks in. What do you think will happen to the price of oil? There will be no limit. Once that skyrockets, again the national and global economy feels the crunch, as it is today. Yet that crunch will be magnified by Obama's stubborn unwillingness to explore US drilling options. Basically, there is nothing Obama plans to do in the short term to bring oil prices down, yet he promises a tax on corporate profits that will without a doubt send oil prices even higher than they are now. One wonders how much more $120+ a barrel oil this economy can take.

Finally, Obama's capitol gains tax. Even Hillary - who rarely meets a tax hike she doesn't like - stated that increasing the capitol gains, even by a small amount, would be a bad idea for our economy. But Obama doesn't want to increase it by a small amount, he wants to DOUBLE it. This means that investment will slow down, and the stock market will plunge. Naturally, the overall economy will take a hit. NEVER has an increase in this tax led to economic expansion...never.

Obama has announced a few plans for the economy, and none of them will amount to actual growth. NEVER has a tax increase led to economic expansion. This is because of a simple premise, and that is that the gov't isn't effective at efficient spending. The private sector is. Under Obama, I fear we will see higher unemployment, more small business failures, decreasing investments, higher inflation, astronomical oil prices, higher food prices, and one of the worst economic downturns since the Great Depression.

The economy is sputtering from oil strangulation and the housing market, there isn't much more it can take before bad things start happening. But small business and investment remain strong. What happens when Obama hits them with his economic policy?


Anonymous said...


Dr John,

Enduring being called a Racist, it is just 'Par For The Course'.


Taxing the "Middle Class" and the 'Corporate Rich' ("excess profits") that Create the Jobs, increase the GNP, and Stimutate Investment, as you have repeatedly pointed out, falls on deaf ears.

Socialism Demands a
"Redistribution of Wealth"!

Ignore 'em. reb

Anonymous said...

I read today that Bennigans filed for Chapter 7. No attempt to restructure, just shutter the restaurants. The mid price establishments are suffering as people alloctae their money for necessities.

Vicorp, the parent comapany of Village Inn has filed for Chapter 11 in an effort to reorganize.

I have a soft spot for Vicorp. Vicorp was on the other side of the first case I argued b/f the CO Supremes. I won and made some new law.

I cannot say I know what the answer is here gentlemen.


Auntyem said...


For heaven's sake, no one called you a racist. I responded to that in the previous post--simply that I considered the use of that "uppity" word" you used as UNFORTUNATE on your part. Only you have used it for Obama for all the world to see.

You said in this current post "I don't seek ways to criticize, I simply read stories and respond". Well, that's what most of us do.

So, how about the headline my husband just showed me--ÄS BUSH EXITS, DEFICIT WILL SOAR TO $482 BILLION, the biggest deficit ever. And that doesn't even include the budget for the war in Iraq.

If Reagan supposedly left office in such a way that the Clinton administation took the credit for the healthier economy during his terms, what has this administration done for the next? Even McCain was outraged by this deficit and laid the blame squarely on this administration for overspending. For Heaven's sake, Clinton left a record surplus!

You said, "NEVER has a tax increase led to economic expansion", yet when Clinton took office in 1993, Wall Street pressured him to abandon his promises of tax cuts and he pushed a tax-heavy deficit reduction plan through a Democratic Congress, and he ended with a surplus. Sounds like the next President will be stuck in the same way. If the economy goes any lower, will the only place to go be up?

Now the economy is really sagging and Bush gave away millions in stimulus packages hoping to stimulate the economy, but it didn't seem to help.

Around here we are not doing too bad. As a doctor, you'd be interested to know that the business I see growing here is MEDICAL services. Several groups are in competition and they all seem to have the money to invest in new buildings, remodeling older ones, new high end diagnostic equipment, and other services and high earning specialists. They are doing heart surgery and other specialized surgeries that previously could only be done off this island in Seattle or Tacoma. I didn't have to go to the hospital for my knee surgery--the ortho doc has his own brand new operating room, and there were half a dozen people attending me.

My private doctor's group even gave huge raises to their nurses because they threatened to go on strike. I couldn't believe the raise they got.

We don't have any big employers on this island other than the military--the Puget Sound Naval Yard, the submarine base, another air base on neighboring Whidbey Island, Ft. Lewis (Stryker Brigade) south of Tacoma. We mostly have just retail outfits--Macy's, Home Depot, Office Depot, Applebee's, Olive Garden, Ross, Wal-mart, etc. Lots of people commute over the bridges and on ferries to Seattle and Tacoma to jobs there.

Starbucks has closed several stores across the Sound, but not here; our restaurants aren't doing too well, and some have closed, the little privately-owned ones. Too bad, I like them better than the large chains, more diversity. I miss the rib place. Lots of second-hand and cut-rate stores have opened up.

TLGK, I like the Village Inns when I visit El Paso and New Mexico. We don't have those up here. I hope they don't close. They are so much better than other coffee shop chains, the food more regional.

Some businesses are finding ways to cut costs: the landscaping company that takes care of our development and the golf course here fired most of their workers and replaced them with many little brown guys (I know them as Mayan Indians from Gautemala but the neighbors think they are Mexican illegals-maybe they are illegal--everyone turns a blind eye to that).

I guess those little guys do the same work for a lot less. The Board didn't want to raise our homeowner's fees, but they might still have to. They are making me pay to keep up the greenbelt that abuts my property that they used to maintain, so in effect they raised my fees. The Board has ignored my protests.

John, I wouldn't worry so much about what Obama will do to this country. He won't get the chance to do anything because the people who show up for his speeches and blogs probably don't even realize they have to register to vote, much less vote, and the precincts and voting rules, etc. are always manipulated so that they are left out anyway, their votes thrown out for this or that, and if the vote is close, there are judges that will appoint the Republican, again. How many days to the election? I am in suspenders--NOT.

Port Orchard, WA

John Washburn said...

Emilie, I apologize if I misinterpreted your criticism. This misunderstanding is no doubt a reflection of our different backgrounds, yours in the northwest, mine in the deep south. Where I come from, the word "uppity" is much more common and typically is used by the "have nots" when referring to the "haves" who walk the sidewalks with their nose in the air.

I will admit that Hollywood has often attached the word to their portrayal of the backwoods, toothless, Mississippi redneck, but reality doesn't match. Again, I apologize.

As for the budget deficit, you will not get me to defend what the GOP Congress did. They behaved like a teenage girl who stole daddy's credit card. It was appalling, and they paid dearly for it in 2006. There is no excuse for Congress acting this way, regardless of party, and many conservatives like myself are fed up with it. But not to the point of voting in someone who will only give Congress MORE freedom for such spending.

But, you and I will agree that the problem with the deficit is not lack of revenue, but rather too much spending. Government revenues are at record highs, it's just Congress can't seem to grasp the concept of self-control. In fairness, the Dems haven't done much better...did you see the latest $25 billion housing bailout?

So since lack of revenue isn't the problem, I would submit that raising taxes isn't the answer. The answer to the deficit is to simply cut spending. If we continue to inflate the size of government, nothing good will happen. This is why I support McCain's policy of vetoing any bill with earmarks or frivolous spending and "making it's authors famous". Responding to Congress' gluttonous spending by raising taxes only gives them positive reinforcement. Remember, these people behave like teenagers, so we must treat them as such. If your teenage daughter maxed out the credit card would you give her another with a higher credit limit, or would you take the credit card away?

As far as Clinton, any economist will tell you the 90s economy was driven by the tech boom and not Clinton's tax policy. Fortunately, Congress was a little less drunk on money and didn't spend nearly as much. However, Clinton's taxes eventually wore down the economy and we endured 9 months of recession in 2001 as a result. The economy didn't rebound until the Bush tax cuts took effect, and government revenues increased. It's simple, lower corporate taxes lead to more government revenue because the economy expands. It doesn't seem right on the surface, but that's the reality.

Today, the economy sags because of oil prices and the housing slump, two things that have tremendous ripple effect. Blaming Bush is reflexive since the President often takes the blame for such things, but I hardly think it's fair. He DOES share some blame for the high spending given his veto power and unwillingness to use it while Congress was having their frat party, but I don't think it's fair to blame him for oil and housing prices. Also, the value of the dollar has dropped because of all the borrowing we've done in funding the Iraq War. This criticism is fair, but weighing the risks I think it had to be done. The dollar will eventually recover.

And since your local economy seems to be driven by the medical field, a vote for Obama may not be a good idea. If healthcare becomes more nationalized, the type of expansion you're talking about will come to a grinding halt. Just something to think about.

Anonymous said...




Loop Garoo,

Due to a Technical Problem, all "Incoming Comments" since July 17th were lost. Sorry, reb

Dan Trabue said...

For some reason Obama sees this as unfair (and, in a way, he's right) and wants to change things so the "rich" pay MORE!!!

Yes, in a way he IS right. To quote an ancient philosopher: To those to whom much has been given, much is expected.

Or to quote a less ancient philosopher: With great power comes great responsibility.

Fair is not the same as "equal."

It would not be fair to tax everyone $1000, regardless of their income. That is obvious.

Neither is it fair to tax everyone 10% (or 20% or whatever number you want to suggest), as 10% for the poor person is not the same as 10% for the rich person.

Now, I will allow that there are economic consequences to taxing folk at different rates and those ought to be considered (the whole notion of people working less to avoid taxes, for instance, or working "black market" - off the record, for another example).

I'm just pointing out that "fair" is not the same as "equal."

As someone who is firmly middle class, I certainly expect to pay a much larger percentage than someone who is at the poverty level. Expecting that I would pay the same percentage as them would be unfair.

John Washburn said...

Dan, one question, and I don't mean this sarcastically. When the top 1% of America's income earners pay 40% of the income taxes; and the top 25% of earners account for 86% of the taxes; while the bottom 50% only pay 3% of taxes....tell me, how would YOU change this?

What, in your mind, would be considered "fair"?

I also believe that everyone should pay their fair share, and what I see above certainly looks MORE THAN FAIR. The rich pay 86% of taxes and the super rich pay 40%. I don't see much wiggle room there. So, what would you change to make the system more fair?

Dan Trabue said...

Suppose we have a poverty level person making $12,000 a year. They aren't having to pay on federal taxes because their income is so low, but they are certainly paying food taxes, gas taxes and whatnot.

How much? I don't know, let's say $600 or 5%. That's probably low, but let's use that as a guess.

Suppose we have a working stiff - say someone who makes $25,000 a year - pays (let's say) $2,500 in taxes (leaving $22,500 to live on). She's paid 10% of her income on taxes.

Suppose we have a millionaire. He makes $1,000,000 a year. The system is working out real well for him and he's profiting greatly from life in our Republic. He pays, let's say, $400,000 a year in taxes (I question whether any millionaire actually pays that much a year, but let's assume, I don't really know).

He's paying a WHOPPING 40% of his income into taxes to support this system that has given him the chance and freedoms to make $600,000 a year take home pay.

Are you asking me to feel sorry for this poor millionaire because he's paying 40% of his annual income in taxes?

I don't. I think he is doing pretty well with the system we have in place and he's not hurting for food or homes (plural) or cars (plural).

I'm not angry at him. I'm not jealous of him (I wouldn't take his burdens for anything).

As someone closer to that middle bracket, I'm glad to pay twice what someone in the lower bracket is paying in taxes. I'd suggest they should pay even less.

I guess "fairness" may be a fairly arbitrary number and I'll be honest: I don't know what is the perfectly fair number to tax each group. But I'm not thinking that we're anywhere near approaching being unfair to anyone except for possibly the poorest.

How would you advocate breaking up the taxation for the three people in my example? I'm with Jesus: To whom much has been given, much will be expected. I think that makes sense philosophically and religiously, and I also think it makes sense fiscally.