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So that's where the free money comes from?

October 16, 2008

Politicians like to promise to spend money as if they can pull it out of a stash of free cash that doesn't actually come out of someone's pockets. Senator Obama seems to think corporations can fill the role of cash pinata for politicians:

Because after eight years of failed policies, he and I both agree that what we're going to have to do is to re-prioritize, make sure that we're investing in the American people, give tax cuts not to the wealthiest corporations, but give them to small businesses and give them to individuals who are struggling right now...

The Tax Policy Blog has nonpartisan coverage of the candidate's tax whoppers. They rightfully note the folly of the assertion that "big corporations can afford to pay more taxes":

What Sen. Obama doesn't understand or doesn't want to tell the American public is that when Exxon Mobil writes that check to Uncle Sam, some PERSON is paying the price for that. In the short-run, that person could be a shareholder, a worker, or a consumer. But the fact that Exxon Mobil has a lower after-tax profit means that some PERSON is worse off. For example, Exxon Mobil would likely reduce its dividend payment, or its share price could fall, and that hurts every PERSON who was invested in Exxon Mobil at the time the tax was enacted.

Only two sets of people can pay corporation taxes: the owners and the employees. When you beat on corporations, you either beat on their employees or you beat on the 401(k) plans that invest in them. I don't think there are many people whose 401(k) accounts need more beating right now.

 • Brutal Assault on Reason Watch       Bookmark: del.icio.us • Digg • reddit