Monday, February 11, 2008

Obama, the Very-High-Tax Candidate

To the casual reader of the primary and caucus results of this past weekend, Obama is just creaming Hillary. This race won’t be over until the returns are in from Texas and Ohio next month and Pennsylvania in April. After that, the super-delegates will have to make up their minds. But right now, Hillary is just getting whooped. That’s the long and short of it. (Plus, she just fired her campaign manager.)

This is disturbing news on the taxation front. The Wall Street Journal’s Steve Moore says Obama’s tax plan would add up to a 39.6 percent personal income tax, a 52.2 percent combined income and payroll tax, a 28 percent capital-gains tax, a 39.6 percent dividends tax, and a 55 percent estate tax. In other words, Sen. Obama is a very-high-tax candidate. Whether Wall Street has fully discounted this, I have no idea. Probably not yet. But somebody in the investor class ought to be thinking about it, because it’s not good.

Interestingly, at least two of Obama’s top economic advisors — Austan Goolsbee and Jeffrey Liebman — are highly regarded free-market economists. Goolsbee from Chicago, Liebman from Harvard. But somehow their candidate has a very punitive high-tax campaign plan for the economy. I don’t know all the details on Hillary’s tax plan, but I don’t think she is yet in favor of lifting the payroll tax cap, as Obama is. And I think she’d keep cap gains at 20 percent. But none of this is any good.