14 JUL 08 / "Taxing Entrepreneurship"

Taxation is a stodgy issue, but it's one voters should be keenly aware of because of the profound effect it has on the economy. Senators John McCain and Barack Obama have been touting their tax and economic plans since they clinched their respective nominations, and the contrast is stark.

Some Republicans are dismayed that McCain is not a conservative, but on issues like taxation he is far more conservative than Obama. It is right for McCain to point out that raising taxes on small business and entrepreneurs would be extremely harmful to the American economy. Money is a form of freedom. And all Americans, especially small business owners and entrepreneurs, will have less freedom under Obama's plan. Small business owners pay at the corporate tax rate, and they also provide for most of the new job growth in our economy.

McCain wants to cut income taxes, estate taxes, and corporate taxes. Our corporate tax rate is the highest of the industrialized countries. McCain is also proposing doubling the child tax credit from $3,500 to $7,000 for every dependent.

Obama proposes a middle-class tax cut and a tax increase on the most wealthy Americans. The majority of Americans are likely to support such a proposal because only the affluent will have to pay more in taxes, but most Americans fail to realize the deleterious effect this tax plan would have on the economy.

Obama also wants to raise taxes on oil companies and use the revenue to give rebate checks directly to the people. This is populism run amok. Obama essentially wants to extort money from oil producers in order to buy votes for himself. Oil companies should neither be subsidized by the federal government nor should they be punished for profiting from the high price of oil.

The Democrats insist they are only taxing the rich. And that Republicans are beholden to the rich. This is classic socialist rhetoric. Republicans understand that you don't expand and strengthen the middle class by taxing the upper class because you would be taxing the capital that could be used to start companies and create jobs.

"The power to tax involves the power to destroy," said John Marshall. When the government taxes something, we get less of it. When the government taxes initiative, productivity, and capital; it does so to the detriment of the American economy. While the oil companies should not have tax shelters and subsidies, a windfall profits tax would only decrease the supply of oil at a time when we should be doing all we can to increase supply. The windfall profits tax did not work during the 1970's, it only exacerbated our problem.

Obama talks whimsically of change, his campaign's central theme. But his policies are reminiscent of those adopted by the Carter administration. Obama is using rhetoric to move to the center in order to attract a broader base of support while he is portraying John McCain as a running for President Bush's 3rd term. He refers to conservatism as "the failed policies of the past" when, in actuality, it's liberalism that has been proved a failure.