On Republican criticism of Obama's tax plan

Authors:
Luis Alberto López Rafaschieri and José Alberto López Rafaschieri
www.morochos.net

Obama has proposed a tax reform that reduces tax rates for less affluent classes and increases the contribution of the U.S. economic elite. The government estimates that with this initiative small business will be encouraged, student loans will be more available and a better health plan will be developed.

But most Republicans consider this idea "a Robin Hood plan," "socialist" and promoter of the "class struggle". Besides, they accuses the government of punishing investment and success with this measure.

However, the Obama tax plan is not new in the U.S., as it was part of the policies implemented during the Bill Clinton administration, who raised taxes from 31 to 36% for families with annual incomes over $140,000, and almost 40% for families with incomes over $250,000 a year -exactly the same numbers that Obama proposes- all with the goals of keeping taxes low for middle-class families and fund programs for the poor.

We must remember that the "Clinton Era" was one of the most prosperous periods in U.S. history, and that Clinton almost succeeded in establishing a universal health system but the project was rejected by Congress. So no one can argue that such a mechanism will destroy economic growth and private investment. On the contrary, if the less affluent population has better opportunities, the whole country will have a better chance to grow and generate prosperity for all.

And neither can we say this is a socialist proposal, because it doesn't violates private property, it just sets a small increase in the taxes of those who have large incomes. Moreover, even if Obama's tax plan is approved, the U.S. will continue being among the developed countries with lower taxes.

Ironically, part of the money collected under this tax hike will help fund bailouts of companies owned by rich people, because even if the funds do not go directly to firms at risk of bankruptcy, they will allow to stabilize the budget and devote more resources to companies in need.

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