MATIBAG: Barack’s economic plan to address income gap
October 13, 2008
Let’s begin with some quick word association. For me, the word “economist” brings to mind free-market fundamentalists like Milton Friedman or anti-tax advocates like Grover Norquist. So it came as a surprise when I began to see professional economists speak as favorably as they have of Barack Obama’s economic platform. As early as August, the Nobel prize-winning economist Paul Krugman published an editorial in the Sacramento Bee, titled “Obama Has the Economy Edge — So Why Won’t He Just Say So?” Ten days ago, The Economist published a poll of 638 research associates from the National Bureau of Economic Research, asking which candidate had a better grasp of economics — 80 percent of respondents said Obama.
Reassuring as it may be, it’s not enough to rely on the opinion of experts. Let’s return to The Economist for some facts. According to its writers, Obama’s plan would maintain the Bush tax cuts for families and businesses earning less than $250,000, while raising taxes on those who earned more. The magazine quotes a non-partisan group called the Tax Policy Center, which has estimated that under Obama’s plan, “80 percent of American households would pay less tax than they do now, but 10 percent would pay more.” If the TPC prediction is accurate, than Obama is clearly the better choice for the majority of American voters, who want lower taxes.
Those concerned with the increasing income gap between the rich and poor would be better served by Obama’s plan as well. The TPC projects the net income of the bottom 20 percent of earners would be more than 5 percent higher, while “that of the top 1 percent would be 8 percent lower.” This would certainly be a step toward greater economic equality in the United States.
Obama’s higher taxation of the wealthy will help restore a federal revenue base that has been steadily eroded by the Bush administration. The Boston Globe reports that he “favors $25 billion to help states meet their own needs” and “another $25 billion for roads, bridges and other infrastructure.” Additionally, he has proposed massive public works programs that would create millions of new jobs. With an expanded democratic majority in Congress, Obama would likely have the legislative support to sign at least some of these projects into law. But before any of these ambitions can be realized, he needs your support on Nov. 4.
— Cristobal Matibag is a senior in pre-journalism and mass communication from Ames