McCain and Palin have been calling Obama’s tax plan as wealth re-distribution and both have even gone so far as to link it to socialism. They commonly cite a small snippet from Obama’s talk with Joe the Plumber when he mentions the phrase “when you spread the wealth around it’s good for everyone.”
Here’s my perspective. Both are in a way, by means of their tax plans doing wealth distribution, and it’s nothing new. We have pretty much always had stratified income tax. The difference I can see is that Obama is more focused on giving more of the tax breaks to those who have average or low income, and McCain wants to redirect most of the tax breaks to those who make more.
They’re reasons have to do with their economy ideologies. Obama sees the economy as being rebuilt from the bottom up and McCain sees it as building from the top down. Obviously because we’ve recently seen the economy get stronger while wages decreased, thus contributing to today’s economic mess, more people are wary of trusting CEOs of big business to have the interests of the middle class in mind. Either way, it is wealth redistribution.
But my point is, it would have been a far more interesting discussion if Huckabee were nominated for president to push his Fair Tax plan. Under this plan, property and income taxes would be eliminated, and instead we have a single federal sales tax of 30%. Thus tax is based not on what you make, but what you spend. To offset the fact that those living paycheck to paycheck spend a higher portion of their income, there would be an initial tax credit/refund given at the beginning of the year. The IRS would instead just turn into a sales tax enforcement agency.
Whether or not you like this idea (I’m not yet sold), it would have been a far more interesting discussion!