Monday, June 30, 2008

Taxing the rich

A few days back, CNN posted an interesting analysis of Obama's tax plan, and how it will impact wealthy Americans . I consider myself a fiscal conservative, but I should say that I'm not particularly opposed to raising the top marginal income rates back to their pre-2001 levels. (I do, however, think it's a bit deceptive for Obama to say he's "rolling back the Bush tax cuts," since Bush was basically rolling back Clinton-era tax hikes).

I am concerned about Obama's plan to lift the cap on income subject payroll taxes. Will employers have to pay an additional 6.2% on every dollar over 250,000? If so, isn't Obama concerned about wage deflation? Or unemployment? Or economic stagnation? Would he consider an exemption for small businesses?

Obama is surprisingly vague on the details. At a time when we're cycling out of a pretty severe contraction, should we really be focusing on this kind of income redistribution?

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