Over the last few weeks we have heard different rhetoric from President-Elect Obama on the issues of taxation than he spoke about on the campaign trail.? For starters, his basic principles portrayed throughout the election amounted to socialist-type theories.? Let’s directly raise taxes on the rich and take that money and give it to those in the “middle class”.? Although, these tax cuts weren’t really targeting the middle class.??A problem with the federal taxation system has always been that it doesn’t index the cost of living throughout our country.? A family making $75,000 in?Tenessee?may be doing very well, but in New York, it is very tough.? I think that we need to work to redefine our federal tax code in a way that allows indexing?based on location.? Regardless, under President-Elect Obama’s proposal, he was talking about 95% of Americans benefiting from his Robinhood tax principles.??One of my?problems?with this?approach?was the implication of?holding the rich in this country responsible for providing relief to everyone (at their expense and frankly when many?richer Americans are also suffering).? It puts a certain level of responsibility on the rich that is not fair and also attempts to punish them for success.? I have been for a fair tax system and I do believe that a progressive tax system works.? The rich have the ability to pay more than the lower and middle classes (both in absolute dollars and percentages).? However, there shouldn’t be some very significant divide between these rates and they shouldn’t be played off of each other as a take from one and give to another.? I have also been pushing for six months the theory that you do not raise taxes on anybody during a bad economy.? President-Elect Obama still pushed his tax proposal until only two weeks ago.?

Here we are, just about one month?after the election?and he has capitulated on this point.? He has come out and agreed on the fact that we should not be pushing tax increases on anybody during the economic recession that we are currently involved in.? While I commend him for his change in posture (at least for the time being), I do think that he should have reacted earlier.? It is possible that we could have saved?an enormous amount of wealth by averting the?recent more significant decline in the stock market.? Much of Wall Street has been frightened by some of his proposals and a recognition by him of his error?earlier (even though he hasn’t put it that way) could have possibly avoided the continued downturn in the markets over the last month.? I think that we are going to see this come back into focus in the summer or early fall.? As “middle class” tax relief (as defined by President-Elect Obama) becomes a focal point again (outside of stimulus packages), I think this proposal will be brought back on the table.? For now, it looks as though he is operating as a centrist on taxation.