Will Obama raise my taxes? I don’t know, and neither do you. Believe me, I’ve tried to figure it out. I’ve read his plan, as well as McCain’s. I’ve read the analysis of both campaigns. I’ve watched all 4 debates. I’ve even read the neutral analysis of the Brookings Institution Tax Policy Center. Any objective analysis points to the fact that taxes will be lower under McCain than Obama, but how much and for whom is an unknowable. Both campaigns have proposed so many convoluted strategies that it is next to impossible to determine the net effect for an individual taxpayer.

Here’s what I do know:

1) Obama plans to raise the top 2 marginal tax rates. This is his personal version of Robin Hoodness, or in his words, an attempt to “spread the wealth around.” High marginal tax rates are a staple of Liberal/Socialist policy, and Obama is no exception.
2) Obama plans to raise taxes on capital gains and dividends. He intends to make these rates graduated, like ordinary income taxes, so high income individuals would pay a higher marginal capital gains rate of 20%.
3) Obama plans to raise tax rates and reduce tax loopholes on “large” (think public) businesses.
4) Obama plans to raise death tax rates to 45% on estates larger than $3.5 million.
5) Obama plans to freeze income tax rates for other income levels, and cut taxes through targeted tax credits for various activities.
6) Obama supports changing the FICA tax limits (currently capped at $102,000), so higher income individuals would pay higher FICA as well as higher income, cap gains, and dividends.

The net effect of these policies is a higher total tax bill than under what McCain is proposing. Obama claims it is only the top 5% of workers that will pay higher taxes. This is a lie, but it is impossible to calculate how big the lie is. The reason is that Obama plans to raise taxes on businesses. There is a fundamental truth, that most Liberals ignore: BUSINESSES DON’T PAY TAXES; they merely collect them. If you raise taxes on business, the tax will be paid either by customers through higher prices, investors through lower net earnings, or employees through lower net wages.

Obama hasn’t clearly stated, at least that I could find, how much it intends to increase corporate tax rates. So rather than calculating actual impact, we can only speculate. Let’s say Obama raises corporate rates, and reduces corporate tax credits and other loopholes, and a company chooses to pass that along to its shareholders, the net effect would be a reduction in the share price of the company. Extrapolate this to all public companies and the net effect would be a reduction in the value of the entire market. Since more than half the country is invested in the stock market, an increase in corporate taxes would be a tax increase on the middle class as well as the rich. Also, this tax increase would affect stocks held in IRAs and 401Ks, so it is a tax increase on tax-deferred income.

Alternatively, lets assume investors won’t accept lower net incomes, so companies raise their prices to compensate. In this scenario, all consumers including the rich, the middle class, and the poor would end up paying higher taxes.

Would this increase in corporate taxes wipe out the other tax reductions? For some individuals, especially older middle class earners with large retirement accounts the net result would be a tax increase. It certainly will raise taxes on more than the top 5%. The bottom line of all of this is Obama is a tax and spend Liberal, and the country cannot afford his plans.