Wait, Obama is the elitist?

Historically, American elections have usually hinged upon how the economy was doing unless there was a crisis year involving war, terrorism, or the much-vaunted Gay Attack on American Families of 2004 that helped Bush hang on for a second term. If Americans pay attention to the facts and take a good hard look at the Obama and McCain economic plans, then the Republican bid to for the votes of “average Joe” Americans seems all the more strange.
Despite plenty of Republican warnings about Obama being a tax-raising liberal, his economic plan involves an overall tax cut for most Americans. According to the non-partisan Tax Policy Center, the Obama tax plan will cut taxes by $2.9 trillion from 2009-18. True, McCain will reduce taxes by $4.2 trillion over the same period of time, but the cuts benefit most Americans differently. Obama’s plan will involve cuts for middle and low income tax payers. The average middle class family would see about $2,200 in annual savings under an Obama plan, versus $1,400 in the McCain plan. The bottom 40% of taxpayers would be even more dramatically affected, percentage-wise. The McCain plan would cut those taxes by hardly anything, while Obama’s plan would add an extra 6% to low income family finances. The biggest difference would be for the top 1% of taxpayers, who would pay an average of $19,000 more in taxes (1.5% increase) under Obama as opposed to an average of $125,000 less (9.5% decrease) under McCain.

I still haven’t figured out how Obama is the elitist candidate of this election.

By itself, neither candidate’s tax plan will do anything to reduce the federal deficit, which has hit a new peak at $10 trillion as of August. The interest payment alone will cost taxpayers $232 billion in 2008. As a rule, most governments have a bad track record with spending, so I don’t have particularly high hopes for either candidate. For what it’s worth, McCain has promised to balance the budget by 2013, while Obama has promised no more than $400 billion in excess spending by that year.

So far, this one looks good for McCain. The problem is that McCain’s plan is based upon hopes that his tax cuts for the rich will boost the economy at some future date Obama’s plan will raise money by closing tax loopholes, and, among other things, taxing companies that send jobs overseas. As things now stand, the Tax Policy Center estimates that the government will take in $600 billion less over ten years with McCain, as opposed to $800 billion more with Obama. Two problems stick out with the McCain plan for me. One is that the war in Iraq has a $10 billion per month price tag, and with the Arizona’s favorite maverick in the white house, that won’t be changing anytime soon. Obama’s scheduled troop withdrawal promises to lighten that part of federal spending sooner.

Second, the conservative financial approach at large seems horribly short sighted. After all, people who receive a decent education are far less likely to need welfare or go to jail, and the Republicans have a terrible record with funding for public schools. It gets hard to climb the economic ladder if President McCain voted twice against raising the minimum wage in 2007 during his time in the senate. (Obama voted for it.) Is that the pork barrel spending sort of legislation McCain has promised to veto when he’s in the white house? In fact, McCain hasn’t really offered much more than vague promises on the economy. Vowing to reduce pork spending in your nomination speech is about as controversial as promising to be tough on crime or to fight enemies of freedom. How about some specifics? Is anyone vocally pro-pork? One senator’s pork is another Alaska governor’s request for $2 million to study Bering sea crabs. (Yes, in Alaska, the governor has a lot of power over budget request, so this one didn’t just slip by Palin.) But the pork is just a sound byte. The substance is that McCain will give big tax cuts to major corporations, and thanks to his unbridled defence of free trade—environment, human rights, and American job loss be damned— the middle and lower classes will have to be running hard to catch the trickle down from this scheme.

So, which is the responsible plan? The one that severely cuts taxes all across the board, and then hopes for a Hail Mary of prosperity without directing energy towards making the middle class a more viable part of the economy, or the plan that taxes those who can afford it and tries to keep the middle and lower classes from being even more marginalized by the globalizing economy?

-Ian