Richard Rahn compares the economic plans and advisers of the Presidential candidates and finds McCain to be in a stronger position--though he does state that McCain needs to specify where his spending cuts will come from. When it comes to Obama's position, Rahn is eviscerating:
Mr. Obama's fiscal plan is totally implausible. He has, according to the National Taxpayer Union (NTU), already promised to increase spending on a variety of government programs by more than $344 billion per year. He intends to pay for it by increasing taxes on the "wealthy" (the top 1 percent of taxpayers already pay 39percent of the income tax). But the revenue he seeks will not be there, because the rich are able to find many legal (and illegal) ways to avoid paying much higher tax rates. Former Federal Reserve Board member and head of the National Economic Council Lawrence Lindsey has shown how the Obama proposal "would make the private sector $5 poorer in order to make the government $1 richer."
Nobel Laureate and "father of the euro" Robert Mundell said if Mr. Obama does not renew the 2003 tax rate reductions, "the U.S. will go into a big recession, a nosedive."
Something to bear in mind if you plan on voting with your wallet in November.
In addition,
Charles_Beauchamp July 17th, 2008 at 10:34 p.m. (link)
Senator Obama's proposed capital gains and social security tax increases are the most dangerous economic policies imaginable.
If he were to succeed and increase capital gains taxes to his proposed 28%, we would experience one of the deepest recessions in modern times. His speeches and answers regarding this issue suggest that he doesn't understand the value destructive nature of capital gains taxes. If increased, those baby boomers who hold the majority of our country's assets, will retire with a minimum of 13% less than they expected as they sell for retirement. This assuming that their assets have not lost value since the passage of the tax increase, which is very likely.
Furthermore, capital gains increases will destroy innovation and entrepreneurship hear by eliminating marginal ideas and pushing great ones into overseas markets friendly to entrepreneurship.
Finally, eliminating the cap on social security taxes will cause numerous problems. First, self-employed americans would find themselves paying around 60% tax rates (including federal income & social security, state, and local taxes) on all their incomes. What the Senator refuses to admit is that a self-employed person pays the full social security tax where the average employee splits the tax with its employer. These people rely on that income above the current cap to make-up the losses of paying the full tax. In addition once this ban is lifted, all workers making above the $102,000 will pay this tax on their full salaries, but only receive benefits based on the $102,000. This an indirect way for the Senator to promote more income redistribution.
These actions will prolong this poor economy that either candidate will take the oath of office in.