McCain and Obama: Tax policy proposals compared

August 27, 2008

Democrats are going to raise your taxes, blah, blah, blah. Let’s have a serious look at what the candidates are really proposing. Here’s a link to an informative graphic. Below is CNNs discussion of a non-partisan report on the candidate’s plans. Tell me honesty: Which policy do you prefer?

So. Who are you personally going to get the best tax deal from? Whose policy do you figure is more responsible with regard to the record-setting deficit spending of the Bush administration?

I expect i’ll hear from the Libertarian “I want to shrink the size of government to 1842 levels” crowd who will knee-jerk favor McCain’s plan simply because it lowers taxes for everyone, including millionaires. But for the rest of us–those of us who aren’t advocating radical changes in the scope of the federal government–who would honestly support the McCain plan over the Obama plan?


No comments yet

  1. I’m in that lower income bracket. Whoo hoo, a little more money for me, I’ll run right out and vote for Obama!

    Seriously though, this clip sounds like just another typical CNN Obama-Love-Fest. Hopefully there was more in-depth analysis not shown here? For example, the charts show the “savings” of each income bracket, but what were they paying before? A person earning $2.9 million will pay $701,885 over and above what they are already paying? What are the consequences of such a radical change in taxation?

    Let’s use Marquette as a microcosm. Many of the families who send their kids to Marquette fall into that upper income bracket. Will a few of them decide to tighten their belts and not send their kids to such an expensive school? Of course. But more concerning is the fact that many of the wealthy donors who provide money for scholarships, grants, and special needs programs are not going to have the discretionary income to do that any more. Hence fewer scholarships, fewer grants, fewer programs for needier students, more debt for the students who now need to take out more loans, in addition to the loss of tuition from the families who could have paid in full before, but now choose to go elsewhere.

    That means fewer jobs for Marquette employees. The employees who are able to hold onto their jobs will likely see a loss in their retirement savings as the bigger investors in whatever 401K or retirement investment program you use pull out. The smarter rich people, of course, are going to make their investments overseas, benefitting economies other than ours.

    Economics is not as simple as CNN’s chart makes it sound. There are consequences to redistribution of wealth. I would have expected a better analysis from a “Personal Finance Editor”.

  2. As the resident Libertarian, you will not have the satisfaction of the knee-jerk favor of McCain’s plan. I do not like McCain’s plan at all. I like having my taxes lowered, but the cost is too high. Personally, I think McCain’s plan for the U.S. is almost as evil as Bush’s.

    And no, I do not want the federal government to be shrunk down to 1842 levels. I want the federal government shrunk down to the limits set forth in the Constitution. Period. It is this strong, central government that causes the necessity of high levels of taxation and the inherent stupidity with which the money is spent.

    I am not a huge fan of this years Libertarian candidate (Robert — call me Bob — Barr). I wish Harry Browne was back, there was a real candidate.

  3. The investments of the wealthy are the engine that drive our economy. I know liberals like to fool themselves into thinking that it is the Federal Government that drives economic activity, but that is just not true. Taxes come from the creation of wealth…incomes, capital gains, corporate profit, etc. By putting in place a plan to penalize these behaviors, you will see those activities decrease. Often, a decrease in taxes on economic activity will increase the total tax revenue by increasing the creation of wealth. Everyone wins.

    The post about the university as an example should frighten an employee of said university. When you confiscate money from those with wealth, they hunker down and wait for the storm to pass. If you can’t fathom a decline in enrollment, then you are not thinking it through clearly. The university will be forced to counter the decline by reducing tuition, and reducing expenditures in the form of pay and benefit cuts and lay-offs. That same scenario will play out all over the economy….that is the way it has always happened in the past. What will the Obama do then, when he is faced with a recession and a reduction in revenue to feed his massive increase in programs? THAT is the explanation I’d ike to hear from him. Blowing rainbows up our butts does not really address the serious holes in his philosophy.

  4. The investments of the wealthy are the engine that drive our economy.

    Really? I thought it was the purchasing power of the working and middle class. I have never, ever, heard a rational argument to explain the Republican fetishistic belief that the investor class are the only route to economic growth. It’s all one big circle. I’m not buying it anymore. I’m not buying the myth that the only way to have economic growth is to cut the taxes of the wealthy. Taxation in America is damned near flat as it is. What’s next? Taxing the wealthy at a lower rate than the rest of us?

    How about a more balanced approach? How about we give some of those economy-stimulating tax cuts to the people who consume those goods and services instead of only giving them to the people who invest in them?

    Often, a decrease in taxes on economic activity will increase the total tax revenue by increasing the creation of wealth.

    That’s a complete fantasy. You rabid supply-siders are in love with the idea that tax cuts “pay for themselves” in increased revenue, but the stone cold fact is that you’re lucky to make back even 15% on such an endeavor. You cannot increase government revenue by cutting taxes. Ever.

  5. Well, you are forced to ignore facts in favor of fantasy if you choose that belief system. Federal revenue increased under Reagans tax cuts. By the end of his presidency, the Federal government took in 27% more tax revenue than they did in 1980 with massive tax cuts. You can hate it, but it is true. And while the Feds had more money, the people did too. Everybody won. Under Bush, taxes have decreased substancially, yet federal income tax revenue remains at about the same 1.2 trillion that it was when he took office. If your 15% rule applies, then where does the extra revenue come from?

    It is really simply economics and human nature, but to believe in the liberal cause, you need to deny these things. If a man has $100 and $50 is disposable income, he will spend it and it will be taxed many times over. It will fund sales tax, create income taxes for the seller of the goods and services he purchased, it will become spendable income for the employees of the company that sold the goods and services, and they will pay income tax on it again….and so on. If you tax away $40 of the man’s money, he will curtail his spending….ending the process right there, and putting all those other earners at a loss.

    Oh, and the majority of earners do not pay ANY federal income tax after earned income is applied. That is another fact. Maybe not among the ivory tower crowd, but it is a fact according to the Treasury Department. The richest 10% of Americans paid 60% of all the federal income taxes in 2005 and that is up from 56% in 2000. So, with the tax cuts under Bush, thier share of total taxes went up and revenue stayed the same. I thought you said that was impossible?

    The top 50% of earners….not the jobless, but people who actually earn income, paid 96% of all income taxes. Hardly flat, I’d say., especially since the top tax rate is 35% these days.

    But what do I know, apparently I’ve contracted rabies someplace….

  6. Well, you are forced to ignore facts in favor of fantasy

    O RLY. You’d better call up the folks over at those bastions of liberal propaganda, the
    Wall Street Journal and factcheck.org, and let them know that they are wrong when they say that tax cuts do not result in more tax revenue. You can dance around the issue all you want, but it’s a stone cold fact: cutting taxes does not–not–result in higher revenue. It doesn’t even begin to make up for the loss in revenue resulting directly from the cuts themselves.

    the majority of earners do not pay ANY federal income tax after earned income is applied.[…] The richest 10% of Americans paid 60% of all the federal income taxes in 2005

    I should clarify two things. First, when I say that taxation is flatter than I would like in America, I’m not referring only to the federal income tax–the most progressive tax there is. Instead I’m looking the bottom line of what Americans pay for government services at every level–state, local, federal, etc. When you look at it that way, the lowest 20% of earners are paying something like 19% while the wealthiest are paying something around 32%. That may not seem to shockingly flat until you realize my second point: the income disparity in America is so great–greatest it’s been since the 1920s–that when you realize just how much more income the wealthy have than the middle class and the poor, it starts to make sense why the richest earners pay so much of the federal income tax: they have almost all the income in the first place.

  7. Ah, I see how we argue. I posted actual tax revenue numbers that you ignored, and then countered by posting a blog that admittedly cites a group that is unfriendly to President Bush. So, opinions trump numbers. Again, I’ll ask you to explain how, in spite of the tax cuts, revenue stayed the same. Don’t cuts reduce revenue?

    And I’d love to see your mathmatical explanation of how the lowest earners pay 20%. They pay no state or federal taxes at all. They actually receive additional monies in the form of credits when they file income tax….so that would mean they pay a negative percentage.

    If you want to argue that all the nickel and dime taxes add up, I agree. Those are unfair and should be abolished. But in light of that fact that the gross preponderance of entitlements are directed to that income group, I’d say that they don’t bear much of a burden at at all. To make your case you have to ignore all of the credits and benefits directed at that 20%. That’s just not honest.

    So, how DID those tax revenues increase when taxes were lowered? I’m still waiting to see THAT math.

  8. So basically you think citing business week and factcheck.org are unreliable sources of information?

    I’d love to see your mathmatical explanation of how the lowest earners pay 20%

    Sure thing.

    how DID those tax revenues increase when taxes were lowered?

    Well, we can assume that it wasn’t primarily due to any tax cutting! Not unless you’re willing to say that sources as disparate as business week and factcheck.org have got it completely wrong. They–and others–say that cutting taxes results in a loss of revenue nearly equal to the amount of the cut (minus around 15% or so). Assuming that your assertion is correct in the first place, I’d have to say it was due mostly to other, unrelated, economic factors.

    Let’s cut the bullshit. Do you believe that cutting taxes increases government revenue? Yes or no.

  9. Do you actually READ the posts before you reply to them? That might help a bit. I did point out that your Wall Street Journal link was to a blog that cited an anti-Bush group. Not really proof. And linking to your own posts as proof is a little too Denny Crane for my tastes.

    McDonalds and Walmart understand the concept. Low prices increase total profit by increasing volume even as the per unit profit drops . Same holds for taxes.

    So again I’ll ask, how did Bush cut taxes, and yet revenues stayed the same?

    I don’t really expect a good answer though. You simply can’t reason a person out of something that they didn’t reason themselves into in the first place.

  10. Let’s not argue past each other. You want to know how revenues stayed the same while Bush cut taxes. I don’t even know if that’s true or not, but for the sake of argument I’ll assume it is. My answer is that it’s due to other unrelated economic factors having nothing to do with his tax cut–that if taxes had been cut less, revenues would, you know, have been higher than they were, rather than staying the same.

    But while you’re asking that question, I’m asking you a broader one: Do you or do you not believe that cutting taxes results in higher government tax receipts? Do you believe that tax cuts “pay for themselves” through increased economic activity? Me, I’ve seen reports that indicate what you get is a decrease in revenue roughly about 85% of the size of the tax cut. What say you? Are you a believer in this kind of voodoo economics or aren’t you?

  11. Hmm. Well, you can quite easily look up tax revenues and see what is true. To cavalierly say that it is due to unrelated factors is just “getting stuck on stupid”, as they say in the Army. You don’t know why, but you insist that it can’t be supply side economics at work….because you don’t want THAT to be the answer. Here’s a kicker for you….the very same thing has happened to corporate taxes. Lower rate, higher revenue.

    So, I’ll await a real explanation….not just a certified denial of the numbers that you don’t like. I’m guessing that process was the same one used by the IPCC to come up with their pre-ordained conclusion on global warming. Science and intellectual honesty only happen when you view facts to form a theory. Coming up with the conclusion and then avoiding the facts that don’t fit won’t cut it with me.

  12. Obama’s tax plan will destroy the Social Security system.

    Obama says his income tax plan will lower taxes for 95% of Americans. There is just one problem with this, 40% of Americans already pay no income tax. Obama’s response to this is that these people pay Social Security tax. Well, that’s not income tax, but a contribution to their retirement plan. So if he wins and implements his tax plan, for the first time in the history of Social Security, 40% of the people who will get retirement benefits will have paid nothing for them. Social Security will then loose all pretext of being a retirement plan, and will become a national welfare program.

    This will cause Social Security to lose public support in a massive way. Leave Social Security contributions out of income tax plans. If you take some peoples income taxes to pay others Social Security taxes, Social Security will be destroyed forever.


  13. for the first time in the history of Social Security, 40% of the people who will get retirement benefits will have paid nothing for them.

    Whoa, there. Even if you effectively pay no federal income tax, that doesn’t mean you aren’t paying FICA on your paycheck.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: