According to the non-partisan Annenberg Political Fact Check, Sen. Barack Obama’s tax plan would increase gross tax receipts by $103.3 billion in 2011 alone. That number by itself would make it the largest single-year tax increase in American history since World War II, and measured as a percentage of gross national product, it would be the fifth-largest tax increase since 1943. Even with these record-breaking levels of taxation, Obama still would not be able to cover all of his promised increases in domestic spending. Commenting on Obama’s tax and spending plans, Clinton-era Office of Management and Budget official Idabel Sawhill tells the Los Angeles Times: “I don’t think it all adds up.”
The Obama campaign claims its economic plan calls for “only” an additional $130 billion a year in increased domestic spending. But the price tag is closer to $300 billion per year and $1.4 trillion over five years, says Sen. Wayne Allard (R-Colo.), who sponsored an amendment to this year’s budget resolution that included all 111 Obama campaign promises for new domestic spending. (Obama ended up voting against his own platform.) Commenting on the chances Obama will follow through on his spending promises, President Clinton’s former chief of staff, Leon Panetta, told the newspaper: “I accept that all candidates throw out a lot of proposals when they’re campaigning. You have to assume that’s all part of a campaign strategy to appeal to a lot of different constituencies that are out there. But once he enters the Oval Office, he’s going to have to make some hard decisions.”
One of those hard decisions will be Iraq. Obama claims that by ending the Iraq war he will save $90 billion a year. But that was before his recent evolution on the issue. Despite promises he makes to supporters on his campaign website, he recently told America’s Servicemen and Women in Military Times that he would “draw down in a deliberate fashion in consultation with the Iraqi government, at a pace that is determined in consultation with General Petraeus.” Petraeus is the architect of the surge strategy that, despite Obama’s opposition, turned Iraq around. Heritage scholar Stuart Butler observes: “You cannot justify a longer-term commitment to a program based on a one-time saving on the war in Iraq.”
Obama also claims he would save $80 billion a year by closing tax loopholes. But the non-partisan Tax Policy Center says it could not confirm the projected savings. What we do know is that Obama has promised not to lower our corporate tax rate, which is the second-highest in the world. Instead of simplifying the tax code, Obama wants to further complicate it by creating a “Patriot Employer Act,” which would lead to new loopholes for companies with businesses overseas to exploit.
Even if Obama does manage to pay for his spending, there is little reason to believe it will help the economy. For example, he also promised to spend $60 billion on infrastructure that he says will create 2 million new jobs. But studies show infrastructure spending creates few jobs, and that those jobs it does create are offset by losses elsewhere in the economy due to decreased private consumption and investment. Instead, what our economy needs is increased energy production, reduced barriers to trade and a less-punitive, simpler tax code.
- Bolstered by recent Iraqi military successes, Prime Minister Nouri al-Maliki proposed yesterday that negotiators include a timetable for departure of U.S. troops from Iraq in any agreement to continue the American presence beyond the end of the year.
- Lobbyists trying to comply with the ethics law passed by Congress last year are easily finding loopholes.
- China agreed yesterday to buy a Norwegian oil company for about $2.5 billion to increase its drilling capacity.
- Faced with evidence that its biofuel mandates contribute to deforestation and help force up food prices, the European Union proposes to drastically scale back biofuel goals.
- Your new flat-screen television contains potent greenhouse gas, with 17,000 times the global-warming effect of carbon dioxide.