Monday, November 24, 2008

Taxing the rich - forgotten promises?

I hope that Obama has not conveniently forgotten his campaign rhetoric of increasing taxes on the rich. I waited for some mention of this hyped up promise in the economic team rollout event this afternoon, but did not see even a passing reference. Even if the current economic climate is not the most conducive for a statement on taxing the rich, one hopes sincerely that he has not forgotten this plank that he ran on...

As mentioned previously on this blog, only 2% of all households in the US make more than $250,000 a year. That leaves 98% of all households below the $250,000 limit. The median income of US households is about $50,000. A sensible tax on the elite 2% will help pay for the stimulus/infrastructure plan that the President elect unveiled over the weekend. We cannot go on deficit financing all of our expenditures and lay the repayment responsibilities on future generations.
From here: But there were no plans to balance the tax cuts with an immediate tax increase on the wealthy. During the campaign, Obama said he would pay for increased tax relief by raising taxes on people making more than $250,000. "There won't be any tax increases in the January package," said one Obama aide, who spoke on condition of anonymity because the details of the Obama package have not been fleshed out.
The last eight years of 'trickle down from the rich to the not so rich' just has not worked. It is clear from the staggering disparities between the upper crust and the rest.

Meanwhile on the bailout front, the current administration is not even trying to act coy about raising the possibility that the bailout mania will end with Citigroup. The pledges made by the US government to ease the credit crisis now totals $7.7 trillion. It is indeed strange how the bailout czars trip over themselves to rescue the world of the virtual (a service economy that deals in cooked up financial instruments) even as it lets the nuts and bolts economy (an automotive industry employing real people and producing tangible goods) by the wayside. I do agree that the automotive industry led itself into the current mess by lobbying for policies that was more in its short term self interest than strategic, but the last great manufacturing lynchpin in this country will crumble in the blink of an eye if we ignore the $25 billion bailout requested by the automotive industry. Why is Detroit not included in the elite 'too big to fail' category when it is responsible for directly or indirectly employing nearly 3 million US residents?

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