Change might just make CENTS

In an effort to save millions of pension plans around the country the Federal Government is scheduled to loan over 80 Billion dollars to AIG in an exchange for 80% control in the company. This also comes on the heals of investment giant Lehman Brothers who have had their doors open since 1850 filing for bankruptcy protection and Merrill Lynch announcing they will be acquired by Bank of America. With trying times like these some are arguing for change in Washington. I agree there has to be change in order to fix some of these problems that we are facing. The question though is this: Do you want change that makes sense, or just leaves you with cents.

The punching bag over the past few years has been big oil companies making profits at the pump. While I hate paying extra to fill up as much as the next guy I hate even more the idea of choking these companies with even heavier tax burdens. Follow the logic with me if you will. Of the top 10 Global 500 list of companies 5 of them are oil companies. Those 5 companies employ a combined 406,335 people according to the 2008 report. US corporate tax burdens are nearly 50% and, we are second only to Japan for the highest tax burden placed on corporations. If we raise taxes on corporations one of two things I predict will happen:

1. We will see more outsourcing to other nations of our job. The companies have responsibilities to their share holders not to their country.




2. We will see increased cost at the pump and around the country on everything as oil companies try to make up their tax losses by increasing their profits.

Look at Ireland who used to rank amongst the top in terms of taxes on corporations and has since dropped their tax burden down around 15% causing an economic boom throughout their country.

On the table now is also the idea of the Rich being taxed in order to pay for those who are less fortunate financially. Recently Senator Barack Obama appeared on the Bill O’Reilly show to talk about his candidacy. O’Reilly began to question his tax plan and called it a free lunch for the poor. O’Reilly said, “ The free lunch is that you’re taking the wealthy in America and the big earners, OK, you’re taking money way from them and you’re giving it to people who don’t. That’s called income redistribution. It’s a socialist tenant. Come on you know that. You went to Harvard.” Obama responded, “Teddy Roosevelt supported a progressive income tax.” Notice he didn’t deny the fact that his policy was socialistic in nature, but simply said he wasn’t the first to come up with it. Not suprising from a guy who hasn't been able to come up with many orginal ideas since his campaign began.

In closing consider the following statistic:

According to the IRS 86% of ALL federal income tax are paid by the top 25% of income earners. Between income redistribution and government control of assets some might be concerned which type of change we will be getting in the future and if will make sense, or cents for Americans.