Taxing the other side of the bucket

Fred Thompson had a great response to Obama's claims on tax policy.

Now our opponents tell you not to worry about their tax increases.

They tell you they are not going to tax your family.

No, they're just going to tax "businesses"! So unless you buy something from a "business", like groceries or clothes or gasoline ... or unless you get a paycheck from a big or a small "business", don't worry ... it's not going to affect you.

They say they are not going to take any water out of your side of the bucket, just the "other" side of the bucket! That's their idea of tax reform.

As my husband remarked on his blog yesterday, Obama's plan is to limit his increases on taxes to just the top earners, those millionaires that Democrats love to say aren't paying their full share.

My question: what makes anyone--anyone--think that the vast majority of those families would sit still and pay another $700K per year?

Through tax shelters and other legal methods that their accountants can find for them the richest earners are those who have the best ability to find ways to lessen their tax payments. I don't know if there is ever any example in history of the government getting the anticipated revenue that they expect from increased taxes on the ultra-wealthy. So what will Obama do when he doesn't get the revenue he expects from his tax increases? Will he cut the spending programs that he plans to put in place or will he spread those tax increases to those 95% he's swearing he'll protect from tax increases?

Yes, John McCain's tax plan also raises questions about how he's going to achieve his promise of balancing the budget. But, as his economic advisers wrote yesterday in the WSJ, his tax plan is geared towards economic growth.

John McCain's tax policies are designed to create jobs, increase wages and allow all Americans -- especially those in the hard-pressed middle class -- to keep more of what they earn. His plan achieves these goals in three important ways.

First, he proposes a package of tax incentives that will create jobs and raise earnings by inducing firms to invest more in the U.S. Second, he is strongly committed to blocking any increase in tax rates while doubling the personal exemptions for families with children, which will reduce the tax burden on working Americans. Third, he proposes a new, refundable tax credit that will increase health-care coverage, reduce the cost of health care, and provide more funds for families and individuals to purchase health care.

The question is on the spending side for McCain's plan. I don't buy that he'll be able to balance the budget by banning earmarks. While earmarks have become a blight on the budget, they're still a proportionally small part of our overall spending. However, I have more faith that a policy geared towards economic growth will do more to increase revenue than one that seeks to penalize those who fuel our economy.