Does Obama Want a Trillion-Dollar Global Tax?
I know we still have nine months to go before Election Day, but I may already have a winner for my "Understatement of the Election Season" Award. Right at the end of his big economic speech last week in Wisconsin, Democratic front-runner Barack Obama, last night's big primary winner in that state, said the following:
In the end, this economic agenda won't just require new money. It will require a new spirit of cooperation and innovation on behalf of the American people. We will have to learn more, and study more, and work harder. We'll be called upon to take part in shared sacrifice and shared prosperity.
Let's stick with that "new money" part for a moment. For starters, that "new" money is, of course, "your" money, your tax dollars. And it's a lot of money. Obama has proposed a couple of hundred billion buckaroos in new government spending along with new tax increases. But Obama may have just been getting started. Back in December, Obama sponsored the "Global Poverty Act," a bill that proposed the following (Efharisto to the American Thinker for spotting this one):
To require the President to develop and implement a comprehensive strategy to further the United States foreign policy objective of promoting the reduction of global poverty, the elimination of extreme global poverty, and the achievement of the [U.N.] Millennium Development Goal of reducing by one-half the proportion of people worldwide, between 1990 and 2015, who live on less than $1 per day.
What this bill would do, in short, is commit the United States to the U.N. declared goal that industrialized countries should spend 0.7 percent a year of their gross domestic product on foreign aid. Over the next decade or so, that would work out to around $850 billion. When the bill passed the Senate Foreign Relations Committee last week, Obama said that "as we strive to rebuild America's standing in the world, this important bill will demonstrate our promise and commitment to those in the developing world. Our commitment to the global economy must extend beyond trade agreements that are more about increasing corporate profits than about helping workers and small farmers everywhere."
How to pay for our penance? Economist Jeffrey Sachs, an advocate of this idea, has a suggestion:
We will need, in the end, to put real resources in support of our hopes. A global tax on carbon-emitting fossil fuels might be the way to begin. Even a very small tax, less than that which is needed to correct humanity's climate-deforming overuse of fossil fuels, would finance a greatly enhanced supply of global public goods.
So not only does Obama want to raise taxes on Americans making over $250,000 a year and eliminate the $102,000 wage cap on Social Security taxes, he perhaps wants to tack on another trillion dollars in taxes to pay for dramatically increased foreign aid. Of course, we could just borrow the money. Obama, after all, has not stressed balancing the budget during this campaign, instead promising to eventually put the budget on a "pathway" to being balanced.
And would such a commitment of money work anyway? Here is what Sachs critic William Easterly, an economic professor at New York University, wrote in the Journal of Economic Perspectives in 2003 on the topic:
Aid agencies have misspent much effort looking for the Next Big Idea that would enable aid to buy growth. Poor nations include an incredible variety of institutions, cultures and histories: millennia-old civilizations in gigantic China and India; African nations convulsed by centuries of the slave trade, colonialism, arbitrary borders, tropical diseases and local despots; Latin American nations with two centuries of independence and five centuries of extreme inequality; Islamic civilizations with a long history of technical advance relative to the West and then a falling behind; and recently created nations like tiny East Timor. The idea of aggregating all this diversity into a "developing world" that will "take off" with foreign aid is a heroic simplification.... The macroeconomic evidence does not support these claims.... The goal of having the high-income people make some kind of transfer to very poor people remains a worthy one, despite the disappointments of the past. But the appropriate goal of foreign aid is neither to move as much money as politically possible, nor to foster societywide transformation from poverty to wealth. The goal is simply to benefit some poor people some of the time.
Another option proposed by geopolitical strategist Thomas Barnett, who advocates that the United States partner with China and India to create a heavily armed global peace corps (our expertise and firepower, their manpower) to bring security to failed states in Africa and elsewhere across the globe. With a relatively safe environment established, private direct investment could then pour into those countries.
Tags: economics | presidential election 2008 | Barack Obama | poverty
Tools: 
Share
|
| Comments (22)
Reader Comments
Oh noes!
Anti-Obama propaganda! Grab the torches and pitchforks!
The money spent on the Iraq war ...
Could have been used to build economies in the Thirdworld..and if done right, would not empower dictators. -->Like that one charity that makes microloans to women..Entrenpreneurs build economies.
It's Not a Tax
Try actually reading the bill. It doesn't allocate a penny. Nor does it require the U.S. to allocate a penny. It's also been back by the most powerful Democrats and Republicans in the House and Senate Foreign Relations Committee.
Dollars for Dictators
Aid to 3rd world nations will end up in the hands of the ruling dictatorship. Funds will be funneled to the party faithful and be used to suppress any opposition. Governments will be empowered and will siphon off much needed resources from the productive private sector.
Anti-tax advocates refuse to argue merits
I've seen a lot of pundits criticize Obama's proposal to lift the payroll cap on Social Security taxes without discussing its merits. Okay, so I realize most of you guys make more than $100,000 a year, probably a lot more, but how exactly is it fair for middle-class Americans to pay a higher effective tax rate than the already very rich? What about hedge-funders and the hugely wealthy that pay an effective 15% tax rate on dividends and capital gains instead of paying income tax? Is that fair?
Do we need tax hikes in some places? ABSOLUTELY. Reagan trickle-down economics is a fallacy. Crashing the dollar by financing tax cuts for the wealthy with deficit spending and phony accounting methods is a de facto tax on the poor. Ask any economist--the current mess of stagflation and foreign debt that we're facing is a huge and unsustainable problem.
Here's an idea: lift the payroll tax cap so we can fully finance entitlements; make the capital gains and dividend tax rate progressive, just like income tax--i.e. 0% for families with less than $100,000 in assets, 15% for families up to $500,000, 20% for families over $1 million...on up to 35% for families with more $25 million--remember that the pre-Bush rates were 25 and 30% across the board; raise the highest marginal tax rate for the top 1% of earners to above 40%; and finally, use the increased revenues to lower the corporate income tax rate below 20%, thereby encouraging corporations to source production domestically, transferring more money to shareholders and consumers, and promoting U.S. competitiveness.
Look at what Ireland has been able to accomplish by similarly lowering its corporate tax rate to 18%. They built a world-leading IT and services industry out of nothing in less than a decade.
Democrats can win this debate and shouldn't shy from it. You think Obama's full of empty platitudes? Try listening to an all-white guy love-in on Fox News or at a Republican debate when they talk free trade and lower taxes. Talk about short on substance. Most Americans know now that "the all trade is good trade" paradigm from the 70s is a myth and that lower taxes means more debt for your kids and a dollar that doesn't seem to buy as much in Canada anymore.
Global Tax
Obama is a member of the CFR and as such is a proponent of globalization and one world government. The more the globalists have their way, the more you can say so long to our national sovereignty and our Constitution.
I don't know what makes people think they have the right to reach into my wallet and take my money at gun point and give it away for causes that I may or may not support. I don't care what YOU think is "good"; it's my labor and my money. It's theft.
The United States is bankrupt, just where do you Obama supporters think the money is coming from to pay for all of this stuff? Do you think China and Japan want to pay for our healthcare, wars, and foreign aide? Do you really think they want to buy more of our debt and take on more worthless dollars?
Every penny of the Income Tax goes back to the Federal Reserve to pay the interest on the debt. The debt our government racks up every time it borrows money from the Fed. Yeah, that's right, they charge the Federal Government interest and guess who pays the bill? You and I. Wake Up! Read the Constitution - watch From Freedom to Fascism on youtube. Get a clue -stop being sheeple.
oh my gosh
i totally agree
very bad !
So, Obama wants to take 70 cents out of every $100 I earn to help the poor in third world countries ! This is just criminal. How can I survive with 99.3% of my income ? Very bad. What? Don't we spend money for the poor of other countries? America gave an aid of full 17 cents out of every $100 of GDP. Then ? Isn't 0.17% of our GDP enough for those guys?
And charging full 6.2% social security tax for people earning over $100000 is pure socialism. Come on ! There are full 20% households in USA that earn over $100000. I think that we, the bottom 80% should pay more tax so that those 20% can pay less tax.
Bush has already signed to the same thing!
In the Monterrey Conference in 2002 GWBush himself came to pledge - in person - that the United States will increase its foreign assistance in this way. He signed up to a document where the signatories "urge all developed countries that have not done so to make concrete efforts toward the goal of 0.7 percent of gross national product (GNP) as official development assistance."
As of 2002, aid equalled 0.2 percent of rich-world GNP.
As you might be aware, not much came out of that.
----------
James Pethokoukis, in the above article: "So not only does Obama want to raise taxes on Americans making over $250,000 a year and eliminate the $102,000 wage cap on Social Security taxes, he perhaps wants to tack on another trillion dollars in taxes to pay for dramatically increased foreign aid. "
No. For the United States, foreign aid would rise from around $15 billion per year (0.14% of GNP) to around $75 billion (0.7% of GNP).
------------------
James Pethokoukis, above: "Here is what Sachs critic William Easterly, an economic professor at New York University, wrote in the Journal of Economic Perspectives in 2003 on the topic: ... "
Mr Pethokoukis is misleading the public. Here is what William Easterly wrote in his book "White Man's Burden," page 368:
“Put the focus back where it belongs: get the poorest people in the world such obvious goods as the vaccines, the antibiotics, the food supplements, the improved seeds, the fertilizers, the roads, the boreholes, the water pipes, the textbooks, and the nurses. This is not making the poor dependent on handouts; it is giving the poorest people the health, nutrition, education, and other inputs that raise the payoff to their own efforts to better their lives.”
For God's Sake, Please Stop the Aid!
an interesting interview and perspective from Kenyan economics expert James Shikwati:
"Huge bureaucracies are financed (with the aid money), corruption and complacency are promoted, Africans are taught to be beggars and not to be independent. In addition, development aid weakens the local markets everywhere and dampens the spirit of entrepreneurship that we so desperately need. As absurd as it may sound: Development aid is one of the reasons for Africa's problems. If the West were to cancel these payments, normal Africans wouldn't even notice. Only the functionaries would be hard hit. Which is why they maintain that the world would stop turning without this development aid. . .
SPIEGEL: If the World Food Program didn't do anything, the people would starve.
Shikwati: I don't think so. In such a case, the Kenyans, for a change, would be forced to initiate trade relations with Uganda or Tanzania, and buy their food there. This type of trade is vital for Africa. It would force us to improve our own infrastructure, while making national borders -- drawn by the Europeans by the way -- more permeable. It would also force us to establish laws favoring market economy."
Former Central African Republic leader Jean-Bedel Bokassa: "We ask the French for money. We get it, and then we waste it."
http://www.spiegel.de/international/spiegel/0,1518,363663,00.html
Will Money Solve Africa's Development Problems?
according to William Easterly, professor of economics at New York University, joint with Africa House, and co-director of NYU's Development Research Institute; also a non-resident fellow of the Center for Global Development in Washington, DC:
"NO
In fact, after fifty years of trying and $600 billion worth of aid-giving, with close to zero rise in living standards in Africa, I can make the case for “No” pretty decisively. . .
Clearly, money alone does not solve problems. What is needed instead are business, social, and political entrepreneurs who take responsibility for, say, making sure medicines reach victims, rather than more grandiose slogans about comprehensive administrative solutions that only serve as publicity vehicles for raising yet more money for ineffectual aid bureaucracies. Entrepreneurs would be accountable for results, in contrast to the aid bureaucrats and rich country politicians who make promises that nobody holds them accountable for keeping.
As for facilitating African development, free enterprise has been the tried and true vehicle for escaping poverty everywhere else (see China and India most recently) and it is patronizing to suggest that it won’t work in Africa. . ."
http://www.templeton.org/questions/africa/
I believe the accusation above that "Mr Pethokoukis is misleading the public" in regards to Dr Easterly's position is misleading.
Dangerous
These are some of the single most dangerous ideas that I have heard in some time. The notion that the US should further bankrupt itself throwing money down third world despot rat holes, where the funds will be used to further repress the people and engage in armed conflicts, is absurd. Even more disturbing is the idea that the US should pass off its hard earned technology to tyrants in China to create a global police force. Such a force would risk become an agent of repression and a threat to our national sovereignty. The United States needs to come home; if the last administration has taught us anything it should be that meddling in the affairs of other nations is unwise.
Vacation from Foreign Aid
Lets take a vacation... From foreign aid for three years. Then we can reinstate it to countries who agree to allow free and democratic elections,
observe reasonable human rights policies and allow reasonable trade with us and other reasonable countries. Lets see how quickly those previously ungrateful governments/countries come around to reasonable proposals! Wouldn't hurt the deficit either.
Just a thought...
Mark from CA, you stated that Reagan trickle down economics is a fallacy. Then you go on to post something intriguing:
"Look at what Ireland has been able to accomplish by similarly lowering its corporate tax rate to 18%. They built a world-leading IT and services industry out of nothing in less than a decade. "
By your own admission, you are stating that by making and keeping taxes LOW you can have outstanding productivity and economic growth. This very admission not only discounts your position, but everyone else's position in this thread, as well as that of Barack Obama's. No sir, Reagan trickle-down economics is not a fallacy. The TRUE fallacy is the belief that you can tax individuals at a high rate and expect hand over fist of growth. No Democrat or liberal has ever successfully argued that you can have high growth and high taxes simultaneously. The two are anethema of each other.
On an aside, when I was watching Neil Cavuto interview a Barack campaign advisor on his economic agenda, he asked her how he was going to pay for it. Of course, she danced around the question, much like the Texas Senator did on Chris Matthews when asked to mention an accomplishment of Barack in the Senate until forced to admit that he couldn't, and eventually she admitted to Cavuto that she was not going "to be goaded into saying that Barack is going to raise taxes." Now I wonder why that is. Maybe in the dreamy world of the Democratic primaries, tax increases are the rage, but in the reality of the general election, Obama knows that raising taxes will be the death knell in bid to become the next president of the United States.
global tax
I urge everyone to go over to Thomas Barnett's web site/blog 9http://www.thomaspmbarnett.com/weblog/0and check out his take on the best way globalization can speed development. But in a nutshell:
" Military-Market Nexus The seam between war and peace, or the link between war and the "everything else" that is globalization. The nexus describes the underlying reality that the warrior culture of the military both supports and is supported by, the merchant culture of the business world. I express this interrelationship in the form of a "ten commandments for globalization": (1) Look for resources and ye shall find, but...(2) No stability, no markets; (3) No growth, no stability; (4) No resources, no growth; (5) No infrastructure, no resources; (6) No money, no infrastructure; (7) No rules, no money; (8) No security, no rules; (9) No Leviathan, no security; and (10) No (American) will, no Leviathan. Understanding the military-market link is not just good business, it is good national security strategy."
Where willl the money come from?
Just wondering how he plans to pay for all of this when we cannot even pay for health care for U.S. citizens? Shouldn't we take care of ourselves first so that we have a strong nation that can continue to help others well into the future?
Obama - U PAY YOUR BILLS
How come I have to pay my bills for my company and my family-when this guy goes BEGGING for money to run a campaign- Hey Obama, get a life and get a JOB !
kenya
I think we know who Obama is thinking about. KENYA and all his relatives who hate Christians.
Obama Trillions
I've got a solution: let the liberals, professors, and economists pay for this drivel. Let people with more sense than money alone. It makes my head spin to think how fast these programs would tank if the left-leaners had to pony up their own money for these follies than relying on OPM.
CHANGE!
Most Obama supporters I have spoken to have no idea of his policies. When confronted with the truth (such as the fact he will not only continue our warped middle east policies, but expand military intervention into africa as well) they blindly say 'well he's going to bring 'change.
How?
by brining hope!
how?
by bringing change!
I have never seen so many people in willful denial of reality.
Add your thoughts
Your comment will be posted immediately, unless it is spam or contains profanity. For more information, please see our comment guidelines.advertisement
I'm glad someone is talking about this
What matters is that this is an issue that the United States must lead on, regardless of the cost. Reducing worldwide poverty will do much more to improve our security than fighting a war in a place like Iraq for a 100 years for the same cost. There is a debate to be had on how to best go about this, but that's the debate I'd like to have rather than how much longer we should stay in Iraq.
Feb 20, 2008 11:25:33 AM [permalink] [report comment]