[Home]  [Headlines]  [Latest Articles]  [Latest Comments]  [Post]  [Sign-in]  [Mail]  [Setup]  [Help] 

Status: Not Logged In; Sign In

You Know What Happens Next

Cash Jordan: Half-Built Tower Abandoned… as ICE Deports Entire ‘Migrant Workforce’

Heavy rainfall causes flash flooding Tuesday night, some cars stuck in high water on Chicago's West

Biden Doctor PLEADS THE FIFTH, Refuses To Testify To Congress, Biden Pardons ARE VOID

Joe Rogan says FBI director Kash Patel played him for a fool and maga for fools with the Jeff Epstein files

Elon's AI System "Grok" Went Rogue And Has Been SHUT DOWN in an Emergency!

Earthquake Swarms at One of the MOST DANGEROUS Volcanoes in the USA

Ben Shapiro Declares Epstein Case CLOSED: ‘Facts on the Ground Have Changed’

Iran receives 40 Chinese J10-C Fighter Jets

China’s Railgun Is Now Battle-Ready, Thanks to Nuclear Power

Chinese Hypersonic Advancements! Deadly new missile could decimate entire US fleet in 20 minutes

Iran Confirms Massive Chinese HQ 9 B Missile Deal

Why Is Europe Hitting 114°F And Still Rising?

The INCREDIBLE Impacts of Methylene Blue

The LARGEST Eruptions since the Merapi Disaster in 2010 at Lewotobi Laki Laki in Indonesia

Feds ARREST 11 Leftists For AMBUSH On ICE, 2 Cops Shot, Organized Terror Cell Targeted ICE In Texas

What is quantum computing?

12 Important Questions We Should Be Asking About The Cover Up The Truth About Jeffrey Epstein

TSA quietly scraps security check that every passenger dreads

Iran Receives Emergency Airlift of Chinese Air Defence Systems as Israel Considers New Attacks

Russia reportedly used its new, inexpensive Chernika kamikaze drone in the Ukraine

Iran's President Says the US Pledged Israel Wouldn't Attack During Previous Nuclear Negotiations

Will Japan's Rice Price Shock Lead To Government Collapse And Spark A Global Bond Crisis

Beware The 'Omniwar': Catherine Austin Fitts Fears 'Weaponization Of Everything'

Roger Stone: AG Pam Bondi Must Answer For 14 Terabytes Claim Of Child Torture Videos!

'Hit Us, Please' - America's Left Issues A 'Broken Arrow' Signal To Europe

Cash Jordan Trump Deports ‘Thousands of Migrants’ to Africa… on Purpose

Gunman Ambushes Border Patrol Agents In Texas Amid Anti-ICE Rhetoric From Democrats

Texas Flood

Why America Built A Forest From Canada To Texas


(s)Elections
See other (s)Elections Articles

Title: The Obama Tax Plan
Source: Wall Street Journal
URL Source: http://online.wsj.com/article/SB121 ... ?mod=opinion_main_commentaries
Published: Aug 14, 2008
Author: JASON FURMAN and AUSTAN GOOLSBEE
Post Date: 2008-08-21 09:56:54 by iconoclast
Keywords: Election 2008, Taxes, Clarification
Views: 355
Comments: 24

The Obama Tax Plan Even as Barack Obama proposes fiscally responsible tax reform to strengthen our economy and restore the balance that has been lost in recent years, we hear the familiar protests and distortions from the guardians of the broken status quo.

Many of these very same critics made many of these same overheated predictions in previous elections. They said President Clinton's 1993 deficit-reduction plan would wreck the economy. Eight years and 23 million new jobs later, the economy proved them wrong. Now they are making the same claims about Sen. Obama's tax plan, which has even lower taxes than prevailed in the 1990s -- including lower taxes on middle-class families, lower taxes for capital gains, and lower taxes for dividends.

Overall, Sen. Obama's middle-class tax cuts are larger than his partial rollbacks for families earning over $250,000, making the proposal as a whole a net tax cut and reducing revenues to less than 18.2% of GDP -- the level of taxes that prevailed under President Reagan.

Both candidates for president have proposed tax plans. But they are starkly different in their approaches and their economic impact. Sen. Obama is focused on cutting taxes for middle-class families and small businesses, and investing in key areas like health, innovation and education. He would do this while cutting unnecessary spending, paying for his proposals and bringing down the budget deficit.

In contrast, John McCain offers what would essentially be a third Bush term, with his economic speeches outlining $3.4 trillion of tax cuts over 10 years beyond what President Bush has already proposed and geared even more to high-income earners. The McCain plan would lead to deficits the likes of which we have never seen in this country. It would take money from the middle class and from future generations so that the wealthy can live better today.

Sen. Obama believes a focus on the middle class is appropriate in the wake of the first economic expansion on record where the typical family's income fell by almost $1,000. The Obama plan would cut taxes for 95% of workers and their families with a tax cut of $500 for workers or $1,000 for working couples. In addition, Sen. Obama is proposing tax cuts for low- and middle-income seniors, homeowners, the uninsured, and families sending a child to college or looking to save and accumulate wealth.

The Obama plan would dramatically simplify taxes by consolidating existing tax credits, eliminating the need for millions of senior citizens to file tax forms, and enabling as many as 40 million middle-class filers to do their own taxes in less than five minutes and not have to hire an accountant.

Sen. Obama also recognizes that small businesses are the engine of job growth in the economy. That is why he is proposing additional tax cuts, including a tax credit for small businesses that provide health care, and the elimination of capital gains taxes for small businesses and start-ups. The vast majority of small businesses would face lower taxes under the Obama plan than under the McCain plan. In addition, Sen. Obama supports reforming corporate taxes in a manner that would help create jobs in America and simplify the tax code by eliminating distortions and special preferences.

Sen. Obama believes that responsible candidates must put forward specific ideas of how they would pay for their proposals. That is why he would repeal a portion of the tax cuts passed in the last eight years for families making over $250,000. But to be clear: He would leave their tax rates at or below where they were in the 1990s.

- The top two income-tax brackets would return to their 1990s levels of 36% and 39.6% (including the exemption and deduction phase-outs). All other brackets would remain as they are today.

- The top capital-gains rate for families making more than $250,000 would return to 20% -- the lowest rate that existed in the 1990s and the rate President Bush proposed in his 2001 tax cut. A 20% rate is almost a third lower than the rate President Reagan set in 1986.

- The tax rate on dividends would also be 20% for families making more than $250,000, rather than returning to the ordinary income rate. This rate would be 39% lower than the rate President Bush proposed in his 2001 tax cut and would be lower than all but five of the last 92 years we have been taxing dividends.

- The estate tax would be effectively repealed for 99.7% of estates, and retained at a 45% rate for estates valued at over $7 million per couple. This would cut the number of estates covered by the tax by 84% relative to 2000.

Overall, in an Obama administration, the top 1% of households -- people with an average income of $1.6 million per year -- would see their average federal income and payroll tax rate increase from 21% today to 24%, less than the 25% these households would have paid under the tax laws of the late 1990s.

Sen. Obama believes that one of the principal problems facing the economy today is the lack of discretionary income for middle-class wage earners. That's why his plan would not raise any taxes on couples making less than $250,000 a year, nor on any single person with income under $200,000 -- not income taxes, capital gains taxes, dividend or payroll taxes.

In contrast, Sen. McCain's tax plan largely leaves the middle class behind. His one and only middle-class tax cut -- a slow phase-in of a bigger dependent exemption -- would provide no benefit whatsoever to 101 million families who do not have children or other dependents, or who have a low income.

But Sen. McCain's plan does include one new proposal that would result in higher taxes on the middle class. As even Sen. McCain's advisers have acknowledged, his health-care plan would impose a $3.6 trillion tax increase over 10 years on workers. Sen. McCain's plan will count the health care you get from your employer as if it were taxable cash income. Even after accounting for Sen. McCain's proposed health-care tax credits, this plan would eventually leave tens of millions of middle-class families paying higher taxes. In addition, as the Congressional Budget Office has shown, this kind of plan would push people into higher tax brackets and increase the taxes people pay as their compensation rises, raising marginal tax rates by even more than if we let the entire Bush tax-cut plan expire tomorrow.

The McCain plan represents Bush economics on steroids. It has $3.4 trillion more in tax cuts than President Bush is proposing, largely directed at corporations and the most affluent. Sen. McCain would implement these cuts without proposing any meaningful steps to simplify taxes or eliminate distortions and loopholes. In addition, Sen. McCain has floated over $1 trillion in new spending increases but barely any specific spending cuts.

As previously mentioned, the Obama plan is a net tax cut -- his middle-class tax cuts are larger than the rollbacks he has proposed for families making over $250,000. Sen. Obama would pay for this tax cut by cutting spending -- including responsibly ending the war in Iraq, reducing excessive payments to private plans in Medicare, limiting payments for high-income farmers, reducing subsidies for banks that make student loans, reforming earmarks, ending no-bid contracts, and eliminating other wasteful and unnecessary programs.

While Sen. Obama would shrink the deficit from its current record levels, he recognizes that it is even more important to confront our long-term fiscal challenges, including the growth of health costs in the public and private sector. He also believes it is critical to work with members of Congress from both parties to strengthen Social Security while protecting middle-class families from tax increases or benefit cuts. He has done what few presidential candidates have been willing to do by making a politically risky proposal to strengthen solvency by asking those making over $250,000 to contribute a bit more to Social Security to keep it sound.

Sen. Obama does not support uncapping the full payroll tax of 12.4% rate. Instead, he is considering plans that would ask those making over $250,000 to pay in the range of 2% to 4% more in total (combined employer and employee). This change to Social Security would start a decade or more from now and is similar to the rate increases floated by Sen. McCain's close adviser Lindsey Graham, and that Sen. McCain has previously said he "could" support.

In contrast, Sen. McCain has put forward the most fiscally reckless presidential platform in modern memory. The likely results of his Bush-plus policies are clear. As Berkeley economist Brad Delong has estimated, the McCain plan, as compared to the Obama plan, would lower annual incomes by $300 billion or more in real terms by 2017, costing the typical worker $1,800 or more due to the effect of large deficits on national savings and thus capital formation. Sen. McCain's neglect of critical public investments would further impede economic growth for decades to come.

Do not take the critics' word for it. Go look at the plans for yourself at www.barackobama.com/taxes. Get the facts and you will see the real priorities at stake in this election. America cannot afford another eight years like these.

Post Comment   Private Reply   Ignore Thread  


TopPage UpFull ThreadPage DownBottom/Latest

Begin Trace Mode for Comment # 23.

#1. To: All (#0)

No offense intended for my $quarter-million/year friends herein.

iconoclast  posted on  2008-08-21   9:59:27 ET  Reply   Untrace   Trace   Private Reply  


#15. To: iconoclast (#1)

As white America rapidly darkens, all the tax plans the elite of America can offer us will pale to the cost of the multicultural paradise our children and grand children will inherit. Please show me one nation our new brown neighbors hale from that has a culture, history or founding government superior to the land we grew up in? I hear you....silence. Shame on you for pimping this empty suit and his warmed over redistribution scheme. Socialism is unbecoming at any age.

Jethro Tull  posted on  2008-08-21   12:05:39 ET  Reply   Untrace   Trace   Private Reply  


#16. To: Jethro Tull (#15)

God is going to smite thee. How dare you call His Son Barry Obongo Boingo Ungawa an "empty suit."

Esso  posted on  2008-08-21   12:13:12 ET  Reply   Untrace   Trace   Private Reply  


#17. To: Esso (#16)

Barry Obongo Boingo Ungawa

Ah.....the correct Kenyan pronunciation is Wang.

Think Rodney Dangerfield in Caddyshack.

Jethro Tull  posted on  2008-08-21   12:47:36 ET  Reply   Untrace   Trace   Private Reply  


#18. To: All (#17)

One answer fits all.

A pack of die-hard Republican fools panting for eight more years of betrayal and the demise of their nation.

Shame on you.

iconoclast  posted on  2008-08-21   20:14:20 ET  Reply   Untrace   Trace   Private Reply  


#19. To: iconoclast (#18)

A pack of die-hard Republican fools

iconoclast, surely you're a better debater than that? please. show me one post on this thread where anyone has indicated that they are a "die-hard republican." do you see any defense of republicans?

christine  posted on  2008-08-21   20:24:25 ET  Reply   Untrace   Trace   Private Reply  


#20. To: christine, All (#19) (Edited)

A pack of die-hard Republican fools

show me one post on this thread where anyone has indicated that they are a "die-hard republican." do you see any defense of republicans?

I dunno ... how would you characterize total obliviousness and a free pass to the worst administration in American history?

Frankly, christine, this tired canard got worse than old quite a while ago. In the words of the Decider himself you're either with the disgrace that the Republican party has become or you're against 'em.

I need no more promise of change from the Democrats than a turnaround and rejection of the fascistic, bellicose, special-interest-favoring, limitless power hunger of the Plutocrat Party.

The ignoring of the halfwit-in-waiting's idea of amusing "catch phrases", i.e. 100 years of Iraq occupation and "bomb, bomb, bomb Iran" are quite enough to convince me that the another four years of insane foreign adventures in imperialism are the promise of a McCain administration. This is answered herein by shock and astonishment at Obama's much more limited objective of bringing bin Laden to judgment. Furthermore I am confident that Obama will be a listener to our military, state dept, and intelligence communities as opposed to the slavish following of two goofy cabinet members represented so disgracefully by the present occupant of the White House. I seriously doubt there will be any chicken hawks in Obama's cabinet.

One of the other mantras of the Obama antagonists is the lack of specificity in the Obama stump speeches. Well, I attempted to give an example (my posted editorial) of what the democrat platform has to say on taxes and I see no evidence of just what the middle class has has to fear from a tax policy that approaches, but does not eclipse, that of the Reagan era.

You speak of debate. Please help me out here. How does one debate this kind of drivel ........

(1) A promise of a never ending, open ended war in the middle east ... neither of the two idiots we've got to chose from ..

(2)The voters have approved of this theft by returning the thieves back into Congress election after election. all of the above implying that there are no differences in solutions, so we might as well just grab our ankles for four more years of unprecedented incompetence and middle class abuse?

3) Tax and spend vs borrow and spend? Bah, we'll have all three in spades. Eight years of mortgaging our future to China while dishing out tax reductions to global corporatists and Wall Street slickers hasn't been enough for you? Where's the outrage? The ankle grabbing image applies here also.

(3) simplify the system by just sending all the money to Tel Aviv and letting them dole it out as they please (to suggest that Obama's vision for the ME is the same as the neocons is utter nonsense).

(4) When Obummer calls for an increased Army .... yeah, why do that when we can just keep recycling reservists?

(5) Just don't be surprised when taxes for your 50K a year friends go through the roof too. Been there, experienced that .. under Dems and Pubs alike.

(6) I liked the way the Communists did in Russia. They gave the Duma until sundown to get out of Moscow or be shot. Well, we've got an old American axiom we might consider starting with ..."throw the rascals out".

(7) As white America rapidly darkens, all the tax plans the elite of America can offer us will pale to the cost of the multicultural paradise our children and grand children will inherit. Pissing into the wind sounds real sensible. I have 6 white children and 5 white stepchildren. I've decided that throwing out the administration that totally abandoned the concepts of sovereignty and borders makes more sense and is less economically burdensome. ;-) Incidentally if people of non-color have the gonads to oppose it, there need not be a further decline into the cesspool of the under-culture. Start with "mama don't 'low no rap music, F-bombs, backward ball caps, and prison garb roun' here"! Oops, sorry. That would take more effort than pissin' and moanin' wouldn't it?

(8) Socialism is unbecoming at any age. Ah, the "debate" would not be complete without throwing in a Lamebaugh sound bite.

(9) Barry Obongo Boingo Ungawa ... the correct Kenyan pronunciation is Wang. I'm pretty sure I'm a better "debater" than that, christine.

This election is not another "lesser of two evils" situation. More accurately it is a choice between more mad and incompetent evil vs saner policies seriously tainted with some foolishness.

iconoclast  posted on  2008-08-22   11:54:24 ET  Reply   Untrace   Trace   Private Reply  


#21. To: iconoclast (#20)

3) Tax and spend vs borrow and spend? Bah, we'll have all three in spades. Eight years of mortgaging our future to China while dishing out tax reductions to global corporatists and Wall Street slickers hasn't been enough for you? Where's the outrage? The ankle grabbing image applies here also.

Explain how you can have more wars, not to mention shiny new toys for the military and a ton of social programs, and at the same time reduce overall expenses.

Do you really miss stagflation that much?

(4) When Obummer calls for an increased Army .... yeah, why do that when we can just keep recycling reservists?

How about we wage less wars and end the practice of spreading troops across the globe? Less wars = less needed troops.

Oh, I forgot. There are only more wars and occupations in the future. There's terrorists and evil doers out there!

So, when do you ship out for the 1st Obama Internationist Brigade? I look forward to reading about your exploits in Pakistan, Iran, and beyond.

Pissed Off Janitor  posted on  2008-08-22   12:11:48 ET  Reply   Untrace   Trace   Private Reply  


#22. To: Pissed Off Janitor (#21)

"The more I see of life, the less I fear death." - Me.

"If violence solved nothing, then weapons technology would have never advanced past crude clubs and rocks." - Me.

Oddly, your tag lines seem to belie your opposition to "shiny new toys for the military" and your pacifistic view of the world.

iconoclast  posted on  2008-08-22   13:07:10 ET  Reply   Untrace   Trace   Private Reply  


#23. To: iconoclast (#22)

Oddly, your tag lines seem to belie your opposition to "shiny new toys for the military" and your pacifistic view of the world.

Oddly, you never answered my question. All you did was create another.

Tell me, how do the observations that life is a cruel affair and the violence has been the main and prefered force used to shape human history make one a champion of the MIC?

Pissed Off Janitor  posted on  2008-08-22   14:06:00 ET  Reply   Untrace   Trace   Private Reply  


Replies to Comment # 23.

#24. To: Pissed Off Janitor (#23)

Oddly, you never answered my question.

How about we wage less wars and end the practice of spreading troops across the globe? Less wars = less needed troops.

Touche.

Most all hope and pray for peace, but that is anything but a certainty. Regardless of who may start the next conflagration we as the preeminent power on the globe are a paper tiger in terms of men under arms (but certainly not in terms of armaments).

Admittedly, if we were to withdraw troops from many of the hundreds of foolish places we have our people stationed, that would not be true. I have heard some Democrats and the venerable Dr. Paul allude to such, but it's a thought that does not appear to be on the radar of the War Party in general.

iconoclast  posted on  2008-08-26 11:25:48 ET  Reply   Untrace   Trace   Private Reply  


End Trace Mode for Comment # 23.

TopPage UpFull ThreadPage DownBottom/Latest


[Home]  [Headlines]  [Latest Articles]  [Latest Comments]  [Post]  [Sign-in]  [Mail]  [Setup]  [Help]