Law Students

A Word On Waffle Irons and The Economy

By Pete

In a post earlier today, I wrote that my waffle iron has as much “Presidential experience” as Obama does. KMike has called me out on my lazy language:

To be fair, Pete, which of the candidates had presidential experience? Was Jimmy Carter on a third party ticket somewhere? And how many terms did your waffle iron serve in the Senate? Don?t give up hope: we elected a black President; maybe someday we can elect a Black and Decker President.

While electing kitchen appliances to positions of power is certainly “change I can believe in”, I should clarify: when I said “Presidential experience” I did not mean “experience actually being president.” I meant experience commensurate with gravity of the office. Say what you will about Obama, but being carried through a few years in the Illinois legislature as the “chosen one” and then wheeling and dealing your way to enormous earmarks in the U.S. Senate doesn’t really give one much to run on.

Then there was this…

The saddest part of this election was watching Joe the Plumber, and seeing in him every fucking idiot conservative I?ve ever known: he asked Obama a question (predicated on a lie), got a coherent answer, and either did not understand it, or refused to. Barack Obama?s tax plan benefits Joe the Plumber, of course?the challenge, though, is to make him understand that.

This is a mentality that really grates on my nerves, that if they could just get their message out then surely everyone would see it the way they do, being as they’re so enlightened and all.

Problem is, it’s not a fact that Obama’s tax plan actually benefits, in the long run, anyone in the working class. You see, the economy is not some Intro To Micro Econ supply and demand curve, and it’s not measured by the effective income tax rate of Joe the Plumber.

My problem with Obama’s tax policies is this: yes, the middle class is going to see a reduced tax burden. But this comes at the cost of higher taxes on the people and corporations that are producing the country’s wealth. Fact is, if my employer has less money, they have less to pay me. They are not able to create as many jobs. “Trickle down” theory of economics, at least in its basic form, is not nearly as controversial as some would have you believe.

Take an isolated case: Bob the IT Worker is in-house at Big Company. Obama sends Big Co.’s corporate income tax through the roof. In an effort to buoy profit margins (which is their job), they look for ways to cut costs. Bob gets called in and told that they’re outsourcing his position to save a little money. Now Bob is unemployed.

How helpful will that lower tax rate be when your income is zero?

Obama’s presidency isn’t the end of the world. Hell, if we lived through Carter, how bad could this really be? But the economy is in a fragile state, and the last thing it needs is for the big movers to be saddled with higher taxes in the name of huge government spending and class warfare.

I’m not suggesting that Joe the Plumber has put this level of thought into his political opinions (if this election cycle proved anything, it’s that almost nobody really puts any thought into their political opinions), but suggesting that a tax policy is good for someone just because their tax rate is lower ignores a huge portion of the equation.

I hope that Obama and the legislature will consider the impact of vastly increased taxes on the people who make and spend the most money and show some restraint when they put their assault on success¹ into action, but I have a sneaking suspicion that they won’t.

I also have a sneaking suspicion that those tax policies are going to hamstring our economy for a good bit longer than a pro-business approach would.

Unfortunately, McCain waited until after the election was over to demonstrate that he was actually still the same guy he was 8 years ago… leaving fiscal conservatives and moderates standing around wondering what the hell they were supposed to do with their vote this cycle.

Anyway… long, rambling political post to suggest that maybe we should look a little deeper than the “Year to date tax withheld” line on our paychecks when we’re analyzing tax policy.

1. Query: how is it that Democrats manage to be both elitist and anti-wealth at same time?

Full post as published by PeteHoliday.com on November 05, 2008 (boomark / email).