25 To 6 To 4 (Or, $250K To $200K To $160K To $140K . . . To $42K)Nov 02, 2008
Remember the old hit from the band Chicago "25 To 6 To 4"? It was very catchy, but never made much sense to me. Now, Democrat presidential candidate Barack Obama, appropriately enough from Chicago, has a tax plan. He wants to increase taxes on those he calls "the rich" and use that money to redistribute in the form of direct government checks to those who don't pay taxes. At first he defined the "rich" as those who make $250,000 or more per year. What he doesn't realize, or doesn't care about, is that many of those who take in that amount are small business owners whose gross receipts are $250,000 — which is counted as income before their business expenses. These people create the bulk of new jobs in our country and his tax plan would devastate them, killing countless jobs. (See our commentary on how taxes affect businesses, job creation and inflation.)
But just like some of those crazy rock or pop songs whose lyrics seem to change each time you hear it, so does Senator Obama's. Recently, he said he would tax people at $200,000. Then, Senator Gaffe-A-Lot, Joe Biden (click here and also here) the other day said it was the income level was $140,000. A top surrogate, New Mexico Governor Bill Richardson, said in an interview this weekend, that it's $140,000.
Well, what is it? Perhaps $42,000? That's the salary at which Senator Obama voted to raise taxes last year.