Many lower income Americans are loving the idea of receiving the tax credits that Obama has proposed during his campaign, but will they really benefit? Obama’s tax plan doesn’t revolve around actual tax cuts for middle and lower income families, it revolves around tax credits. What this means is that the whole gain of which will be received once a year at tax time as a larger rebate check even though corporations and companies will be paying into this all year.
What people haven’t asked themselves is what the companies response to these higher taxes will be. As far as companies are concerned taxes are simply a cost of doing business. If the cost of doing business increases then companies will react. This reaction can take on any of three forms or any combination of them, which will probably be the case. The first is lower dividends or payouts to its shareholders, which of course where Obama is hoping this comes from even though he doesn’t mention much that this is where our 401k growth comes from. The second is higher prices of goods and services, which will affect people throughout the year even though they only get the extra money from the government once a year. Better learn to budget well. The last place that companies will make up this money is through lower wages and/or less jobs, not a wonderful prospect for us working class.
Obama’s entire plan depends on keeping the status quo but history and basic Business 101 shows us that companies will react and we the middle and lower income will suffer. Realistically, the best we can hope for under Obama’s plan is to have the roughly the same amount of buying power but now with the added bonus of having another layer of bureaucracy and the cost that comes with that, both in terms of money and additional government influence in our lives. Based on the wonderful job ours or any government has done in the past (insert dripping with sarcasm here) that is a layer I would rather do without.
You cannot help the poor by destroying the rich.
You cannot strengthen the weak by weakening the strong.
You cannot bring about prosperity by discouraging thrift.
You cannot lift the wage earner up by pulling the wage payer down.
You cannot further the brotherhood of man by inciting class hatred.
You cannot build character and courage by taking away men’s initiative and independence.
You cannot help men permanently by doing for them, what they could and should do for themselves.