The Tax Foundation blog points out all the economic ignorance on display in last nights debate:
On the issue of energy, Sen. McCain said this about trade with Canada:
By the way, when Sen. Obama said he would unilaterally renegotiate the North American Free Trade Agreement, the Canadians said, “Yes, and we’ll sell our oil to China.”
What he doesn’t understand is that even if Canada shipped the oil to China, the effect on the U.S. would be relatively small given that other oil that is currently going to China would flow to the United States. The difference would be transportation costs and any impact of a tariff. Basically, this statement ignores the fact that there is a world market for oil.
You can circumvent the market. Now on to Obama:
Throughout the debate, Sen. Obama repeatedly showed an unfortunate ignorance of one of the fundamental principles of taxation: all taxes are paid by people. On multiple occasions, Obama claimed that businesses or corporations “can afford” to pay higher taxes. But such a statement is just ridiculous. Companies have no “ability to pay” taxes. Does the corporation’s building pay the tax? How about its fax machine or water cooler? No. People pay the taxes. Here is one such example of why Sen. Obama would get an F in public finance:
Then Exxon Mobil, which made $12 billion, record profits, over the last several quarters, they can afford to pay a little more so that ordinary families who are hurting out there — they’re trying to figure out how they’re going to afford food, how they’re going to save for their kids’ college education, they need a break.
What Sen. Obama doesn’t understand or doesn’t want to tell the American public is that when Exxon Mobil writes that check to Uncle Sam, some PERSON is paying the price for that. In the short-run, that person could be a shareholder, a worker, or a consumer. But the fact that Exxon Mobil has a lower after-tax profit means that some PERSON is worse off. For example, Exxon Mobil would likely reduce its dividend payment, or its share price could fall, and that hurts every PERSON who was invested in Exxon Mobil at the time the tax was enacted.
The economic debate in this election cycle has been particularly bad. Neither McCain or Obama has any clue about economics.