In a continued effort to (hopefully) impartially inform, I thought I'd share some information regarding Obama's tax plan that came up in Sarah Palin's interview with Charlie Gibson.
Regarding taxes, Gibson asked, in part, "Why do you both keep saying that Obama is going to raise people's taxes? It's been pretty clear what he intends . . . cuts taxes on over 91 percent of the country."
To which Palin responded, in part, "He's had 94 opportunities to either vote for a tax cut or not support tax increases. And 94 times, he's been on the other side of what I believe the majority of Americans want."
I'd never heard this bit of information before and it struck me as something important to the issue of Obama's tax plan. So I did a little research to confirm the validity of Palin's statement. Here's what I found from FactCheck.org (who I think is reliable, but please correct me if I'm wrong):
"The McCain campaign and the Republican National Committee both claim that Obama has voted 94 times “for higher taxes.” We find that their count is padded. After looking at every one of the 94 votes that the RNC includes in its tally, we find:
Twenty-three were for measures that would have produced no tax increase at all; they were against proposed tax cuts.
Seven of the votes were in favor of measures that would have lowered taxes for many, while raising them on a relative few, either corporations or affluent individuals.
Eleven votes the GOP is counting would have increased taxes on those making more than $1 million a year – in order to fund programs such as Head Start and school nutrition programs, or veterans’ health care.
The GOP sometimes counted two, three and even four votes on the same measure. We found their tally included a total of 17 votes on seven measures, effectively padding their total by 10.
The majority of the 94 votes – 53 of them, including some mentioned above – were on budget measures, not tax bills, and would not have resulted in any tax change. Four other votes were non-binding motions related to conference report negotiations.
It's true that most of the votes the GOP counts would either have increased taxes for some, or set budget targets calling for such increases. But by repeating their inflated 94-vote figure, the McCain campaign and the GOP falsely imply that Obama has pushed indiscriminately to raise taxes for nearly everybody. A closer look reveals that he's voted consistently to restore higher tax rates on upper-income taxpayers but not on middle- or low-income workers. That's consistent with what he's said he'd do as president, which is to raise taxes only on those making more than $250,000 a year."
Hope this helps. And yes, I do plan on writing about other subjects besides taxes.
Monday, September 15, 2008
Issue 1.1: Taxes (Again)
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14 comments:
So the common argument in favor of extending tax cuts to the wealthy is that those wealthy corporation/people will use their increased assets to create jobs, be more stable and in turn foster a stronger economy. Anyone know of any economic data that actually supports this theory?
How refreshing that a politician's record actually supports what he says he'd do as president.
And I'm getting so tired of how the Republican's are distorting Obama's comments, his record, and his proposals (see this NY Times article and watch what Mitt Romney says about McCain's distortions). I challenge anyone to find distortions that Obama has made that are anywhere near the signficance of McCain's lies.
Regarding Hebe's question, Clinton raised taxes on upper income individuals in the 90's and ushered in the greatest economic expansion and job creation in half a century. Bush, in turn, lowered taxes on the wealthy and has presided over not one, but two recessions and dismal job growth.
In other words, there is no real evidence to suggest that lowering taxes on upper income individuals leads to job creation and economic expansion.
About US corporate tax rates, read this from Princeton economics professor Paul Krugman. It says that US corporate tax rates are already competitive and comparable to other large industrial nations. The idea that we need to cut corporate tax rates to be competitive isn't born out by the data.
You guys keep talking. It's good stuff. Thanks
politifact.com is actually a fairly good source I've found for checking the validity of statements made by both candidates. The site gives "truth ratings" of either true, mostly true, half true, barely true, false and (my favorite) pants on fire to statements made by the candidates. They also maintain files on each candidate and VP candidate. Here's Obama's file: he's made 12 barely true, 18 false and 0 pants on fire statements. Here's McCain's file: he's made 21 barely true, 22 false and 6 pants on fire statements. You can click on each category to see what the actual statements were. So, I guess McCain has the lead in the "lying" race, but neither candidate is by any means squeaky clean.
Is there explicit data to support your claim that these two events are corollary ...
"Clinton raised taxes on upper income individuals in the 90's and ushered in the greatest economic expansion and job creation"
I mean... couldn't we just as easily say that the 90's economic boom was a result of the expansion of the internet as much as it was a result of Clinton's tax policies?
It's good to hear you guys discussing. Keep up the good commentary, Jed on the tax issues (my weakest area), and thanks for the link to politifact.com
So political research and debate is not really my thing. To those who argue it should be …. let’s just say I agree, but I’ve got a few more personal improvements to make before a significantly higher level of political involvement makes the top 5.
Having said that, why shouldn’t I take a little time to join (likely to a much lesser extent) a discussion with people I trust? I can’t really think of a good reason, so I’m going to read, and may even make a post with an additional viewpoint or question, as long as this discussion doesn’t fall victim to the same fate that most in our country seem to … “I believe ‘X,’ and if you don’t you are clearly stupid."
Let me state my affiliation first (I always appreciate knowing where someone is coming from in evaluating input). I have voted democrat in the past, but I am a republican. I belong to a church that is mostly republican and live in a state that is mostly republican. So, my interaction with “liberals” is somewhat limited. Most of those that I do interact with, or read, or hear, seem believe that my views and religious beliefs make me an idiot. Though liberals are certainly not alone in this approach, I’ll admit to digging in a little and sticking with those that I think are more like me, even if I may question their stance on some issues.
Anyway, that’s the intro … I do have a comment on this taxes issue, and will post that in a few minutes.
Though certainly no tax expert (I forgot most of my tax classes long ago), my personal experience leads me to believe this issue is not as simple as some may have us believe. Before going further, I do believe it is reasonable to ask the very rich to pay higher taxes ... allowing the government to reduce the tax burden on the less fortunate. However, it is just not that easy. How do we decide where to draw the line? Are there cases in which the line should be adjusted? etc. Here is just one example, I'm guessing there are others.
Many small businesses are held as S-Corps. By definition, S-Corps pay federal taxes via the personal income tax returns of the corporation’s partners. What does that mean? The small business owner's taxable income is HIGHLY inflated above any real income that enters the household. So someone who really makes well under Obama’s 250K line could be reporting income above that line (the actual income upon which they are paying taxes has actually stayed with the business to invest in the resources that it takes to keep the business profitable, growing, and providing jobs for the emmployees).
Now, I believe that most of these small businesses distribute enough cash so that the the owners' households are not penalized with this tax burden... I know ours does. So the business is really paying the taxes.... great for the owner, bad for the business...
These small businesses are not the same corporations that get all the tax breaks, loopholes, etc. They do pay taxes, usually at a high rate. I've not been able to find any specifics about Obama's plan for calculating the $250K number, or possible other changes that might mitigate this circumstance, but all other things equal, raising taxes accross the board for those filing personal returns with over 250K income, will, actually raise taxes to small businesses structured this way.
Hebe, I don’t have real data to support it, but do have anecdotal evidence from experience in one such small business that higher taxes in these circumstances can very easily cause businesses to tighten budgets and reduce investment … that will almost always result in job losses for lower and middle class families.
In response to Hebe's question about whether the two events are corollary: I'm wasn't really claiming that Clinton deserves all the credit for the economic boom over which he presided.
My point is that in spite of conservative's claims that reducing taxes for the wealthy promotes job creation, Bush's tax cuts for the wealthy have not done that. Likewise, their claim that higher taxes necessarily lead to economic stagnation and poor job creation is disproved by the experience of the late 90's.
I thought you might be interested in data to substantiate what I said above about job growth during Clinton years vs. Bush years. If so, click here for a graph, or here for the underlying data.
Thanks, Alex ... good link. I especially like that Mr. Krugman (along with several of those that commented) acknowledge that the economy is complicated, and that giving Clinton credit for the boom from the expansion of the Internet, or blaming Bush for the bursting of the Internet bubble, 9/11, etc is too simplistic.
Just to be clear, I don't defend the Bush Administration on the economy (or much of anything anymore), it is just not as simple as some would have us believe.
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