Higher Business Taxes Hurt the Middle Class
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I still cannot find anybody to explain to me how raising taxes on businesses and imposing windfall profits taxes on oil companies will help the middle and lower classes.
I know the Barack Obama plan calls for a much larger beauracracy than we currently have, and that it must be funded somehow. But the notion that you can just tax companies and wealthy individuals and impose a windfall profits tax on oil companies is flawed.
How can it be so hard to understand? Businesses are going to make their money. The more they are taxed, the more they will raise their prices. If you levy higher taxes on a company such as Wal-Mart, a company where lower and middle class families do much of their shopping, the prices of their goods are going to increase. The higher tax gets passed directly through to the consumer.
Let’s see, Obama has proposed increased income taxes, social security taxes, capital gains taxes and dividends taxes. He’s proposed higher taxes on job-creating businesses. He’s proposed a tax on coal and natural gas. He’s called for a windfall profits tax on oil companies. So far, Barack Obama has voted 94 times for higher taxes during his time in the Senate (RNC Research). According to the Library of Congress, Obama has voted for a tax increase one out of every five days he’s been on Congress.
Obama voted in favor of the Democrats’ FY09 budget, which would raise taxes for Americans earning as little as $32,000 a year by three percent.
Is that too hard to understand? Seriously. These democrats need to get off the “Obama’s going to help the middle class” train. That’s bologne.
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A windfall tax would cut into oil company profits more than it would the consumer’s wallet. Gas is typically priced to a specific ceiling (i.e. what the consumer is willing to spend). Last July, oil hit $147/barrel while gas didn’t really get above $4/gallon. Energy analysts point out that gas was devalued by 20% during that time. Notice that pre-Ike pump prices didn’t follow oil below $3.60/gallon.
Retailers thrive on offering cheap goods to consumers. If they raise prices higher than what the market is willing to bear, consumers will turn to alternatives or re-prioritize how they spend money. Most of Obama’s tax policies aren’t necessarily aimed at business as much as they are trying to provide balance to the last 8 years of tax policy (which has been biased towards the investment class).
And when you cut into the oil companies’ profits, you cut into any exploration and new project spending. You simply can’t tax a company more just because they’re making more money. It’s not American and it’s just plain wrong. Why punish someone for being successful? Besides they already have a net margin of next to nothing.
So your definition of American is ‘protecting corporate profits for the sake of laissez-faire ideology, and at the expense of the middle class?’ Vote for John McCain then. He hasn’t done you wrong yet.
No, it’s not at the expense of the middle class. Tell me how windfall profits taxes will directly help the middle class.
Let me explain something to you. I’m a business owner that has a payroll. I am middle class. The taxes associated with my business will go up under an Obama administration. In turn, I will decrease the number of employees (also part of the middle class), and take home less for myself. Double whammy….I’ve now contributed to one person being unemployed, and I’ve given the government more of my personal money that will not help me in the least.
Because revenue from the windfall tax will go towards stimulus checks to families. That is the stated purpose of the tax.
Second, most small businesses will be exempt from higher corporate taxes proposed by Obama. He plans to eliminate capital gains taxes on businesses under $250k as well as provide tax credits if business-owners choose to contribute to employee healthcare.
Neither candidate has proposed cutting federal payroll taxes on the employer side, though Obama’s plan would lower it on the employee side - thereby eliminating double taxation.
To my knowledge, the Brookings Institution has provided the only independent analysis of the impact of the two plans, and the verdict favors Obama in terms of small business and the average American.
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