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WSJ "Obama's Tax Plan Is Really A Welfare Plan"

Discussion in 'Politics' started by ultimaonliner, Aug 19, 2008.

AAAintheBeltway
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Stripped of all the partisan rhetoric, the facts are pretty clear. Obama is promising an enormous tax hike. He will also turn the tax system into a welfare system by using it to send money to people who don't even pay taxes and call that a tax cut instead of what it is, welfare spending.

If you feel class warfare and envy is a good basis to bring the country together, obama is your man. His plan reminds me of the joke about four wolves and a sheep deciding to vote on what to have for dinner so that it would be fair.

McCain has always been focused on the real problem, out of control spending. As president, he would be in a position to insist upon real changes in the way our money is spent. We know from long experience that congress will spend in excess of 100% of whatever revenues the tax system produces. Until we get a handle on that, we will never solve our fiscal woes.

#11 Aug 20, 2008

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saxon
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Quote from AAAintheBeltway:

McCain has always been focused on the real problem, out of control spending.
More...

McCain, like Bush, will always consider money spent on military campaigns of glory and plunder to be "off budget". Obama at least recognizes that such foolish enterprises MUST be paid for.

#12 Aug 20, 2008

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pattersb2 Guest
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Quote from saxon:

Here's another WSJ article. YOU decide.

The OBAMA TAX PLAN
By Jason Furman and Austan Goolsbee
August 14, 2008; Page A13

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.
More...

good one, except you failed to mention that the authors work on the Obama campaign.

OBAMA HAS NO CHANCE ... anyone care to wager?

#13 Aug 20, 2008

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pattersb2 Guest
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Is there any wonder why the hispanic population is expected to triple in the next 34 years, to a 133 Million?

Ironically, I hope to move to the carribean to rid myself of the burdon of hispanics. Dare to dream.

#14 Aug 20, 2008

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omegapoint
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Quote from Thunderdog:

Well, at least that means there is a chance it will work, since supply-side, "trickle-down" economics is complete and utter bullshit.
More...

You probably know this but anyway --
Another name for trickle down economics is the horse and sparrow theory of economics where what goes into the horse at one end comes out the horses other end for the sparrow.

#15 Aug 20, 2008

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insider trading
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Quote from AAAintheBeltway:

Stripped of all the partisan rhetoric, the facts are pretty clear. Obama is promising an enormous tax hike. He will also turn the tax system into a welfare system by using it to send money to people who don't even pay taxes and call that a tax cut instead of what it is, welfare spending.

If you feel class warfare and envy is a good basis to bring the country together, obama is your man. His plan reminds me of the joke about four wolves and a sheep deciding to vote on what to have for dinner so that it would be fair.

McCain has always been focused on the real problem, out of control spending. As president, he would be in a position to insist upon real changes in the way our money is spent. We know from long experience that congress will spend in excess of 100% of whatever revenues the tax system produces. Until we get a handle on that, we will never solve our fiscal woes.
More...

Problem is mccain doesn't want to count the cost of the iraq war that he wants to continue,or the cost of the wars he wants to start in iran,korea or russia in the budget

mccain has said he will balance the budget,not including war costs.do these hundreds of billions of dollars a year magically go away ?its so funny that because mccain chooses not to include war cost in the budget people like you act like he is actually cutting spending.

Bottom line is the US will spend less under Obama then it will mccain

Obama says upfront he is going tax those that make over 250,000 a year to pay for his projects

McCain's projects will be continuing the iraq war and trying to start new ones,but he is going to put the cost on The USA credit card to build interest for our great ,great,great grandchildren to pay.thats if mccain doesn't start WWIII that destroys the country

BTW,Today Mccain let it slip that he wants to re start the draft

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#16 Aug 20, 2008

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Mercor
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Quote from insider trading:

Problem is mccain doesn't want to count the cost of the iraq war that he wants to continue,or the cost of the wars he wants to start in iran,korea or russia in the budget

mccain has said he will balance the budget,not including war costs.do these hundreds of billions of dollars a year magically go away ?its so funny that because mccain chooses not to include war cost in the budget people like you act like he is actually cutting spending.

Bottom line is the US will spend less under Obama then it will mccain

Obama says upfront he is going tax those that make over 250,000 a year to pay for his projects

More...

The 1st priority of the federal government is national defense. One can argue where we need to defend, but once that is decided defense spending should come first, then whets left goes to all the other redundant and wasteful pork.

Does Obama believe the upper 2% of earners are just willingly pay additional taxes.
Obama says people making 3 million a year will pay 750k more under his tax program.
People with earnings like that have control over their salaries.
They know with Obama's tax graft program they will have to defer income.

#17 Aug 21, 2008

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saxon
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Quote from pattersb2:

OBAMA HAS NO CHANCE ... anyone care to wager?
More...

You wanna wager? Be my guest...

http://www.intrade.com/

You can buy John McCain futures for 38.9.

Barack "NO CHANCE" Obama is a bit more expensive, at 59.2.

#18 Aug 21, 2008

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insider trading
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Quote from Mercor:

The 1st priority of the federal government is national defense. One can argue where we need to defend, but once that is decided defense spending should come first, then whets left goes to all the other redundant and wasteful pork.

Does Obama believe the upper 2% of earners are just willingly pay additional taxes.
Obama says people making 3 million a year will pay 750k more under his tax program.
People with earnings like that have control over their salaries.
They know with Obama's tax graft program they will have to defer income.
More...

I agree The 1st priority of the federal government is national defense,but the key word is defense,as in to defend a attack

Iraq did not attack The US,Iran will not attack The US.

Under Mccain Tax dollars will fund death,destruction,war and the Haliburtens of the world

Under Obama tax dollars will go to help the poor and uninsured of this country

I'd rather help the poor and not leave my grand kids billions of dollars of debt

#19 Aug 21, 2008

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Mercor
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Quote from insider trading:

I agree The 1st priority of the federal government is national defense,but the key word is defense,as in to defend a attack

Iraq did not attack The US,Iran will not attack The US.

Under Mccain Tax dollars will fund death,destruction,war and the Haliburtens of the world

Under Obama tax dollars will go to help the poor and uninsured of this country

I'd rather help the poor and not leave my grand kids billions of dollars of debt
More...

We have been at war with Iraq since 1991 when the congress voted.

The idea that Federal "tax" dollars help the poor and uninsured is not sound. If taxes are to be used for that purpose it should only be on the local level.

By the time a dollar of taxes goes through Washington and back to the community much of it has been spent.

#20 Aug 21, 2008

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