McCain has clung to the old Republican cut-taxes-and-government-regulation mantra far too long, even as the economic ground has shifted under his feet. His sudden burst of populism on the campaign trail—complaining about "greed" on Wall Street, doesn't change the fact that his tax plan is startlingly regressive [big honkin' PDF alert]—giving only $19 a year in tax cuts to the bottom fifth of taxpayers, and $140,000 to the top 1 in 1000. For the middle class, he offers considerably less than Barack Obama--$319 to Obama's $2,136 [emphasis mine; Ruth Conniff, "Grampa and Barbie on the Economy," The Progressive, 2008.09.18].
Instead of relying on the rick Wall Street folks McCain calls greedy to make trickle-down economics work, Obama's tax plan gives more money straight back to middle-class workers. Even Fox News is willing to report that (hat tip to Stan G!):
In an interview on ABC’s “Good Morning America,” Biden said wealthier taxpayers would indeed pay more under the proposals of Democratic presidential candidate Barack Obama. Under his plan, people earning more than $250,000 a year would pay more in taxes while those earning less — the vast majority of American taxpayers — would receive a tax cut.
"We want to take money and put it back in the pocket of middle-class people,” Biden said. Of those who would pay more, he said: “It’s time to be patriotic … time to jump in, time to be part of the deal, time to help get America out of the rut.”
...Although McCain claims that Obama would raise taxes, the independent Tax Policy Center and other groups conclude that four out of five U.S. households would receive tax cuts under Obama’s proposals ["Biden: Wealthy Americans Must Pay More Taxes to Show Patriotism," AP via Fox News, 2008.09.18].
So take your pick: vote for McCain, who advocates more of the same, or vote for Obama, who offers actual change in policy... and in your pocketbook.
p.s.: Note that when a financial crisis turns the electorate's attention away from personalities and back to issues that matter, Obama gains in the polls.
"McCain sees greed on Wall Street; so why does his tax plan give Wall Street types more rewards?"
ReplyDeleteThe only reason I can see is that encouraging investment in stocks will supposedly help everyone by providing jobs and creating a robust market. That theory, however beautiful, seems to have been proven false in practice, perhaps because of greed and market manipulation on the part of a nefarious few.
"For the middle class, he offers considerably less than Barack Obama--$319 to Obama's $2,136 [emphasis mine; Ruth Conniff, 'Grampa and Barbie on the Economy,' The Progressive, 2008.09.18]."
These are generalizations, but the gist of your argument (according to my psychic powers) is valid: Barack Obama's plan offers a better deal to the majority of taxpayers than does McCain's plan. It places the burden on those most able to pay. If spending can be held in check, the plan could eventually get us (the people of the United States of America) out of the hole we've sunk into without putting any more people on the street.
I heard on Fox News that McCain's plan would tax the medical benefits of employees, while Obama's plan would not. If true, that's a rhino in the rec room if ever I smelled one!
I would still like to see the exacat details of Obama's plan and how it will give me a tax break. I don't believe it. And does he include in that 95% the millions who pay no income taxes at all? And what kind of tax breaks is he talking about? I heard that it is in payroll taxes. Well, just a minute, payroll taxes are our Social Security contribution, and essentially not a tax in my mind. If he is going to rebate people's payroll taxes back, that is double talk on his part. Is he talking about actually lowering INCOME taxes on 95% of the people, or is he including payroll taxes etc? Cory, can you clear this up?
ReplyDeleteAnon 9:25:
ReplyDeleteThese are good questions. I've been wondering about those who pay no taxes at all. How do you cut their taxes?
I also wonder whether this tax cut would be measured in reference to tax rates before the Bush tax cuts automatically expire, or in reference to tax rates after that event. With Dems in control of Congress, I'd be willing to bet that most, if not all, of these cuts will be allowed to expire. All Congress has to do in order to make that happen is -- nothing. And as we have seen, Congress is mighty good at doing nothing.
Whoever is elected President, the Legislature will hold the real power. The Man there, Charlie Rangel, is currently under investigation for tax avoidance. That little twist makes me rather cynical, and it is one of the reasons I harbor an instinctive suspicion of anyone who would fiddle around with the tax code.
No plan can satisfy everybody. But all other things being equal, in my mind Obama's plan makes more moral sense on its face than McCain's plan. Barack Obama's official Web site has a lot of information about all of his proposals. I forget the URL, but of course one can simply google him ...
Anon, best I can offer this morning is Politifact.com's assessment of the claim you're talking about. They find it just plain True. Their assessment is based in part on info from the increasingly popular analysis from the Tax Policy Center:
ReplyDelete--Full analysis (updated 9/12)
--Executive summary (9/15)
--Lots of data (8/14)
Stan: the Tax Polict Center's analysis does assume we follow current policy and let the 2001 and 2003 tax cuts expire in 2010.
We are already far beyond what is healthy for a democracy in how progressive the tax code is. You don't think it foolish to have a majority of the population to have so little a stake in how the government spends their money? Making the tax code more regressive would be a good thing.
ReplyDeleteAs Far as McCain taxing health benefits, that is only a half-truth. McCain would also be giving up to $5000 to everyone who buys health insurance and also try to make regulation from state to state consistent. It would remove the incredible burden of providing health coverage from a lot of companies by allowing people to shop around a truly competitive market without having the government be involved at all in the heath system itself. Kudos.
There must be something to learn from our tax history. In 1970, $6,200 (worth $35,000 today) was taxed at only 19%. Same year $17,700 ($100,000 today) was taxed at 28%. Same year $50,000 ($282,000 today) taxed at 50%. Same year $200,000 ($1,120,000 today) was taxed at highest rate of 70%. There were 25 increments. Today's few increments push down an unfair burden making a bulk of people with relative low income be in higher rates, who in turn clamor for lower rates, which in turn benefits those with truly high incomes. Middle America has been successfully screwed and some credit should go to Lou Dobbs for constantly pointing that out. jh
ReplyDeleteSo let me get this straight, Obama's tax plan is better because it only taxes more for the people shouldering most of the burden in the first place and gives more money to everyone, even if they pay no tax in the first place. It's another earned income tax credit nightmare.
ReplyDelete