Catapulting the Propaganda on Taxes

Even though the Republicans have no credibility on fiscal matters, I believe it was Bill Clinton who killed the Democrats crediblity on taxes. It is clear that Senator Obama, after inaugurated, will say that the situaiton is more severe and will propose more and higher tax increase. Also, with the Democrats in full control of the government, they will not be able to resisit very high tax increases.

Don't just stop at income taxes. I'll give Obama full credit for his plan. What about payroll, i.e., Social Security taxes? Obama's "doughnut" makes no sense except as directly designed pork for the affluent "progressives" that were his original fan base. What about any new consumption taxes, what about taxes on motor vehicle fuels, what about so-called "carbon taxes"? Note that his Social Security tax change will not save Social Security and logically, higher taxes for everyone (raising the percentage) is in order. (It's defective on moral grounds, but this payroll tax could be made progressive in nature rather than feature a single fixed rate.) Will Obama adjust the Social Security benefits upward for those who get hit with the new high taxes? If not, Obama is a thief. (The question of "replacement ratio" and a regressive benefit ratio scheme that decreases as benefits go upward, to most assist those at the bottom, is another tool that can be applied to place reasonable limits on benefits for those at the top.)

Noteworthy is that Obama is consistent and uses the same figure for "truly higher income" for both Social Security and income taxes. ($250,000 annually) This level in fact passes the real world sniff test (reality check). (Boundary between poor and middle class in the real world is the price of a typical automobile or somewhat above $20,000 annually; the $250,000 boundary Obama uses is good for the division among middle and high incomes. It's roughly ten times, something sought by left activists when considering a "maximum wage," but this is merely and interestingly coincidental.)

Business and corporate taxes (which Obama supports) are nothing but smoke screens used by politicians to disguise taxes. That is why democrats will always raise the taxes on businesses and corporations, people won't notice the long term effect that has on their 401k or inflation in the economy. People aren't willing or capable of thinking ' where will the businesses get the money to pay those taxes'? The answer is most always from the individual consumer.

Even Alan Greenspan has issues with McCain's proposed tax policies. Specifically, he says the nation can't afford the $3.3 trillion in tax cuts McCain proposes without tying them to cuts in spending. "I'm not in favor of financing tax cuts with borrowed money."

Unfortunately, that's exactly what McCain's chief economic adviser, Douglas Holtz-Eakin, is suggesting. He said, “I would like the next president not to talk about deficit reduction.”

Kinda sounds like more of the same to me.

While it's a rare day, I have to say that I agree with Superdestroyer, at least to a degree. What we are promised by *any* candidate prior to their swearing in date rarely bears any more resemblance to to post election reality than the original model does to a Picasso painting. They can say all they want, but the old "situation has changed and things are worse than we thought" is a convenient whipping boy. I actually think it's possible that McCain will be forced to pull a Bush Senior if he wins and wind up increasing some "fees" someplace along the line.

I think the comments answer your question, Elyas. A certain segment of the population is convinced Obama will raise taxes, no matter what the policy platform is in reality.

n8dogg: Corporations can't pass on taxes to consumers without consequences. Even a relative necessity like oil is subject to a drop in demand when the price spikes. I agree that corporations will try to do whatever they can to pass on tax increases, but it's not so simple as just raising prices for consumers.

Want to stop “tax breaks for the rich”?

Here is the answer:

http://www.fairtax.org/site/PageServer?pagename...

silly rabbit! People don't read tax charts! Taxin's for kids!

As several people have noted here, promises during campaigns are never what they're cracked up to be. What's interesting is that if you read the report from which the chart is excerpted, almost every paragraph bears that caveat- that the projections are only based on their best estimates of what the candidates are saying they will do.

And perhaps voters are smart enough to note that the multitude of programs that Obama promises will cost a boatload of money, and also smart enough to know that you can't squeeze an infinite amount of money out of the 'wealthy'.

Just saw this this morning (how did I miss this??) about how John McCain will *not* raise my taxes, and also about how he's going to fix health care:

"John McCain wants to tax your employer-provided health care benefits. He wants to replace those benefits with an insufficient tax credit--$2500 for individuals and $5000 for families (the average cost per family for health insurance is $12000)."

...um, so, my taxes themselves go down by $5K, and my health insurance costs go up by $12K...

The other part of the not doing what was promised is that the Democrats will be in charge in Congress and could have enough votes to end debate. Does anyone believe that Robert Byrd will not raise taxes if given the change or how about Charles Rangel in the House?

I do not believe that Obama would ever veto a Democratic tax increase and I believe that the Democrats in Congress will raise taxes much more than promise because there will be no threat of a veto.

elyas,

“Corporations can't pass on taxes to consumers without consequences.”

Where do you think the money comes from? Every nickel of every expense, from suppliers, labor, the government, everything is passed on to the consumer.

If liberals understood economics, there would be no liberals.

How do people really view the candidates in terms of electability? What differences do voters really see between McCain and Obama?

Take our 2-3 minute survey and help us find out...

http://sitemaker.umich.edu/jginges2

jwest: So based on your superior understanding of economics, a corporation can continue to pass on costs to consumers without any consequences? If they raise prices, there won't be a drop in consumer demand at some point?

Come on. The "corporations don't pay taxes" argument is a simplistic talking point. Of course they try to pass on all costs, but reality doesn't always make that possible. Sure, they'll cut costs and do what they can to maintain margins... but that doesn't always equate to a price increase. If it does, a competitor will come in and find a way to undercut them.

I've noticed that all of the unapologetic conservatives on here have nothing to say about John McCain's tax plan, and only bad things to say about what they think Obama might do, even though it runs contrary to Obama's own stated platform. So don't try to tell me McCain won't start a nuclear war with Russia, because that's what I want to believe he'll do if he's elected. It's a genius way to ignore reality.

Anyways. McCain WILL raise taxes. Check out his health care plan.

McCain's plan will increase the national debt, more than Obama's.

McCain's plan will give rich folk, like himself, far more money than it will give to average Joe. And those average Joe's wont get to enjoy that money anyways, since the savings will be wiped out by McCain's own health care plan.

*******

If liberals understood economics, there would be no liberals.

And if conservatives were in charge of the economy... oh wait.

chris,

the difference is that McCain will either veto Congresses plans or roll over and go along with them. McCain will not be able to implement any of his own policies. You need to remember that the Democrats control congress and that the control will increase. The better question for McCain is whether he will veto Democratic tax increases or whether he will go along with them.

One thing that has disappointed me with this campaign is the general meme that Obama will increase taxes, will McCain will not. It's a meme that has been repeated loudly and often by McCain himself as his overall campaign-of-lies tactic (repeat something often enough...). Then again, it's not surprising, either - well before this campaign most people have equated Democrat==raising taxes while Republican==lowering taxes, regardless of what the actual facts are. The truth is much more complicated - both the McCain and Obama economic plans are much more nuanced and complicated than a single-speech-line summary.

I was thinking the other day of a possible political ad that I might create if I had the chance. It would open with a middle-class couple standing in front of their house, saying "We make $53,000 a year - how much more money would I save under Obama's tax plan compared to McCain?" Then it give the numbers, and the camera pans over across the street to another family of four standing in front of a nicer house. "What about us? We make $112,000 a year - how much will Obama save us over McCain?". Then it give the stats, the camera wanders over to a gardener with a rake. "I only make $22,000 a year - how about me?". The ad then ends by saying that any American making under $250,000 will see their taxes go down with Obama, and to go to obamalowerstaxes.com for a quick, simple calculator to find out how much you will save.

The better question for McCain is whether he will veto Democratic tax increases or whether he will go along with them.

Again, you're ignoring reality. Conservatives won the tax argument years ago, and then proceeded to spend with reckless abandon.

No one is going to be able to increase taxes on across the board without killing their popularity. The only hope we have is for something like Obama's gambit to increase taxes on some and not others. My personal preference would be for taxes on everyone but the $250k+ to stay the same, while the top brackets go up.

Chris,

The Republicans spent with abandon and will soon be irrelevant to politics. If you want government spending to remain as low as possible, McCain is the better bet since he will probably veto at least some of the spendng coming out of Congress.

If the Demcrats have 60 seats in the Senate and Obama is in the White House, they can raise taxes withouth much fear. Putting 20 million illegal aliens on the path to citizenship is offset the backlash from the decreasing number of middle class whites.

Elyas,

“The "corporations don't pay taxes" argument is a simplistic talking point.”

It’s simplistic because it is so basic a truth it defies argument. All money, regardless of what it is spent on, comes from the consumers.

Yes, if taxes increase the costs will be passed on to the consumer.

Yes, if prices to the consumer increase too much, a competitor will take the business.

But the trouble is, the competitor is not across town – it’s across the ocean. The U.S. has the second highest corporate taxes. The business that we lose will go to a low tax country.

Is this too hard for the left wing to understand?

mlhradio,

It does not matter tht Obama says he will cut taxes on the middle class. His letting the Bush Tax cuts expire in addition to raising taxes on the rich will not offset his massive spending plans. In addition, operating open borders during a recession will create a demand for government spending while tax revenues are decreasing.

Obama will either have a much larger deficit than he claims or (more likely) push through a huge tax increase in his first year and hope the economy recovers before November 2012.

If you want government spending to remain as low as possible, McCain is the better bet since he will probably veto at least some of the spendng coming out of Congress.

I don't think any of these concerns are as important as ending the Iraq War (which will cut gov't spending) and creating a government run or managed health care system. The size of the federal gov't won't matter at all if our economy continues to be crushed under the every increasing cost of health care. And our energy problems will continue to get worse as long as we're hell bent on sowing discord in the oil capitals of the world.

SD,

The FairTax plan solves the open border problem.

Once enacted, we should provide free transportation to anyone who wants to come to the U.S.

I think candidates should just stop issuing platforms all together, since apparently everyone knows what the candidate will really do anyway. I hereby suggest that candidates stop debating any issues at all and instead just go after one another's patriotism or eating habits. Debating issues sounds good, but since the stated positions are apparently all campaign blather, we might as well stop pretending. I vote for all blather debates.

pacatrue,
On that count, Sarah Palin had a tanning bed installed in the Governors mansion.

These Republicans are so down to earth :-)

To be more productive in my comments, it's looking less and less like either campaign will a chance to implement much of either of their platforms in the first two years. With the financial collapse going on, it's looking like many, many billions of dollars for 2009 or 2010 will be allocated to keeping that system afloat. Obama will only be able to get through one or two of his programs. McCain will likely try to borrow his way out of it, but apparently, the market for our debt has been getting tighter, which could force him to delay tax cuts at best.

Let's be honest here, George Bush and friends came into power with a healthy economy. They have screwed up the economic health of this country so badly (in many ways, including a bogus war) that regardless of who comes into office, they will inherit a job of Sisyphean proportions. This is reason enough not to reward the GOP with a vote in November. It isn't rocket science folks.

JSpencer,

The S&P was well off of its high before January 20, 2001. The economy was slowing down due to the dot.com bust and the overspending due to Y2K. Al Gore would have face the same slowing economy and would have face the same problems after 9/11. The Clinton ADministration went six years with no signicant changes to the tax code, no new spending programs, and no new entitlements. The last six years of the Clinton ADministration is about as close as the U.S. has ever gotten to a libertarian government.

I doubt if an Obama Administration with the Democrats in charge of Congress will have anything in common with the Clinton Administration. Pork barrel spending in West Virginia and new entitlement programs will slide through without vetos when the Democrats are in charge of everything.

SD, if your suggestion is the economy would have spiraled down and the war ensued regardless of who was at the helm, then I reject the notion. Gore was not the intellectual lightweight Bush was for one thing, and his cabinet would have reflected that difference. The extent to which our economy is/will be stressed by the Iraq war would be non-existent as well. 8 years is plenty of time to reap penalties when an administration combines negligence with incompetence. We well may have encountered economic problems, but they might have also been moderated with some creative foresight. At any rate, I doubt most folks would buy into the idea that all the misery that took place under the Bush watch was inevitable... including the economy.

The Clinton ADministration went six years with no signicant changes to the tax code, no new spending programs, and no new entitlements. The last six years of the Clinton ADministration is about as close as the U.S. has ever gotten to a libertarian government.

I believe this analysis is correct.

Since I normally disagree with Superdestroyer, I felt honor-bound to highlight my agreement.

However--and I'm sure anyone still reading this thread knew there was a big but coming--it's astounding to me that the fact that this is something Democrats actually did becomes an argument against voting for Democrats.

Really, it's mind-bending.

Republicans used to be the party of fiscal responsibilty, but now they believe that, in the words of Dick Cheney, "Deficits don't matter".

Isn't that a huge part of how we got to this point economically?

Bush 41, "Read my lips, no new taxes."

George,

since neither McCain nor Obama are promising to be like the Clinton Administration, what a happened during the Clinton Administration is not a good reason to over for either candidate. However, a government divided between McCain and the Democrats in Congress is probably more likely to control spending that a government totally dominated by Democrats.

Disagree with your scenario SD. What you are describing would is a recipe for gridlock, hence a continuing status quo descent... that is, unless McCain were to suddenly morph back into what he claims he once was.

Superdestroyer--

I can only repeat my point: Republicans used to be the party of fiscal responsibility. Now Republican dogma is that deficits don't matter.

And current Republican strategy is, as JSpencer notes, gridlock.

Though I note you've given up the idea that McCain is unelectable.

And how could I forget--McCain's chief economic advisor was the author of the deregulation that brought about this mess.

(The linked article was written in March, not in response to the current shock going through the financial markets.)

Jspencer,

Girdlock is the only time that the deficit appear to go down. Since neither party wants to support the others programs, gridlock limits the size of the government.

And McCain is still unelectable. The MSM has the collective desire to keep the elction close so that people will watch news programs. However, I am sure that the Democrats will out some Republican as a homosexual or child abuser like they have the last two elections and that will throw the swing states to Obama. I also wonder if Obama would take back the Biden pick if he had the chance. The MSM has been listening to Biden for decades and is just not interested.