End-of-Year Tax Planning Takes Election Year Twist

Earlier in the week, I was quoted in an article released by the Associated Press about end of the year tax planning. Below is a quote form the article, including my tip!

Heading into the holidays it's likely that you're going to be thinking a lot about money. And this time of year tax advisers like to remind us that there are ways to minimize our tax bill next April. But with an economic downturn in full swing and a new president waiting in the wings, that typical advice is coming up against a range of uncertainties this year.

Since President-elect Barack Obama has pledged to raise taxes for families making more than $250,000 and increase capital gains taxes, for instance, she said some of the usual year-end planning advice might soon be reversed. As 2008 draws to a close, here are some step you can take to minimize your taxes.

GET ORGANIZED

The first step in the planning process is to make sure that your records are organized and up to date, said Roni Deutch, a California-based tax adviser. "Without records and without substantiating your deductions, you have no deductions," she warned.

Read the rest of the article at Forbes.com

Talking About Obama on FOX Business News

Last night I was able to participate in FOX Business News’ coverage of the presidential election. Throughout the night I answered questions about the tax policies of the presidential candidates, then I was again featured on the channel’s Money for Breakfast program this morning. In the segment this morning I spoke with hostess Alexis Glick on Obama’s tax plan and the future of this country. Embedded below are two videos from my appearance this morning, enjoy!

Tax Fantasy and Today’s Election Season Rhetoric

From Community Times:

Remember how Sen. John McCain made Joe “the plumber” Wurzelbacher of Holland, Ohio, into a working-class hero for questioning Sen. Barack Obama’s tax plans? A Nashville-based publicist, Jim Della Croce, said Joe’s hired him to help deal with the media attention.

There’s talk of a book, recordings and ... who knows? Maybe a radio talk show, which has become the last refuge of the famously outraged.

Quite a few readers have criticized me and other media folks for picking on Joe. When he turned out to have had a tax lien on his house, for example, it seemed to me as though he should be nicknamed Joe the Tax Dodger.

But, no problem. Joe appears to be having the time of his life. At this rate, he might even make enough money to qualify for Obama’s proposed tax increase.

Tax policy is worth a serious debate. It’s too bad that we didn’t hear it.

Instead, McCain, Alaska Gov. Sara Palin, and some of their most prominent supporters touted Joe, hoping voters were too dense to know the difference between a three-point rise in the top marginal tax rate and the threat of a Marxist takeover.

Politics often is called “show business for ugly people” because both blur the lines between facts and fantasy. Enter Joe the Plumber, who presents the image of a man who is burdened by government, even when he isn’t.

Wurzelbacher asked Obama why he should have to pay more taxes if he buys the business he hopes to buy. Obama’s plan called for families that earn more than $250,000 a year to pay higher taxes. That’s about 5 percent of the population and way above what most plumbers make.

“My attitude is that if the economy’s good for folks from the bottom up, it’s gonna be good for everybody,” Obama explained. “I think when you spread the wealth around, it’s good for everybody.”

Election Night on FOX Business News

I am excited to announce that I will once again be a guest on FOX Business News tonight night for a live segment during their election coverage, which will air from 9:00 PM – 12:00 AM EST live. Throughout the segment, I will be interviewed on the next President’s tax proposals and their implications on individual taxpayers, small business owners, and corporations. I am looking forward to this great opportunity, and cannot wait to answer questions from both Alexis Glick and viewers of the program. Be sure to tune in on tonight to watch the coverage!

Top 10 Tax Related Lies from the Candidates

Election Day is just a few hours away, and although most people have already decided which candidate they are voting for, there are still many people who are undecided. To help the readers of my blog who are trying to sort through all of the lies that the candidates have been spreading I have put together the following list of the top 10 tax related lies this election season.

1. McCain’s claim that Obama’s plan will increase taxes on 50% of small business revenue.
Facts: The candidates have both been trying hard to win the hearts of small business owners waiting too see which candidates plan better benefits their business. McCain’s statement however, was simply false. Studies have found Obama’s plan will not raise taxes for the large majority of small business owners and McCain’s numbers were very inflated.

2. Obama’s claim that for every dollar that he has proposed in new spending, he has also proposed an additional cut so it matches.
Facts: The Tax Policy Center (TPC) debunked Obama’s plan (as well as McCain’s) saying Obama’s plan would “substantially increase the national debt over the next ten years”. The only way Obama’s statement could possibly become a reality would be the introduction of some huge government spending cuts he has not yet mentioned.

3. McCain’s claim “Joe the Plumber” would face much higher taxes under Obama’s tax plan.
Facts: Obama’s tax plan does give higher taxes to some business owners, but only ones making over $200,000 a year. “Joe the Plumber” would actually be exempt from Obama’s tax increase, as well as the health coverage fine because of his business’ size.

4. Obama’s claim that “independent studies have looked at their respective plans and concluded that his tax plan provides three times the amount of tax relief to middle-class families than McCain’s.”
Facts: The study that Obama is referring to, done by the TPC, did indeed cite this information. However, the TPC failed to include the candidates individual health care tax plans. When you factor in the health care plans, McCain actually gives more tax breaks to middle-class families, and the “three times as much tax relief” no longer works.

5. McCain’s claim that earmarks have tripled in the last five years.
Facts: McCain has used earmarks repetitively throughout the campaign as one of his main points. He has spoken out profusely against them and stated he does not himself partake on requesting them. However, he made the mistake of publicly stating earmarks have tripled, when in fact they have dramatically declined in the past 5 years.

6. Obama’s claim that McCain’s health care tax plan is a loss for the average family.
Facts: Obama makes a point of saying the average plan costs $12,000 and McCain’s $5,000 tax credit will not cover that. However, Obama is basing these figures on two assumptions; the employer will drop the workers insurance, and the workers wages will not increase to offset the loss. A lot of times employers will drop insurance benefits but raise wages to make up most of the difference. In this case, a $5,000 tax credit would more than offset the difference.

7. McCain’s claim that Obama will tax home heating oil.
Facts: In reality, Obama has not proposed a single plan to raise taxes on electricity or home heating oil. In fact, he proposed a $1,000 per family rebate for increased heating oil costs.

8. Obama’s claim that McCain’s tax plan, gives CEOs of Fortune 500 companies an average of $700,000 in reduced taxes, while leaving 100 million Americans out.
Facts: When Obama says that McCain’s plan will give CEOs reduced taxes he is being somewhat misleading. He is referring to the Bush tax cuts, which do in fact benefit a majority of wealthy Americans. However, McCain wants to extend the breaks which are due to expire in 2011, therefore he is not creating new tax cuts but rather extending existing breaks.

9. McCain’s claim that he wants to “double the dividend from $3,500 to $7,000 for every dependent child in America.”
Facts: Although McCain used the term “dividend” incorrectly (he meant exemption), that is not the point. He says he wants to double the exemption, but studies find his plan will actually only increase the exemption by 50% or so.

10. Obama’s claim that under my tax plan, 95% of Americans will get a tax cut.
Facts: Although Obama’s plan does give a high percentage of Americans a tax cut, the actual amount is actually 81.3%. The number, while still high, is not 95%.

Group asks IRS to investigate Catholic bishop against Obama

From USA Today:

A church-state watchdog group has asked the Internal Revenue Service to investigate whether the Roman Catholic bishop of Paterson, N.J., violated tax laws by denouncing Democratic presidential nominee Sen. Barack Obama.

In a letter sent to the IRS on Wednesday (Oct. 22), Americans United for Separation of Church and State accused Paterson Bishop Arthur Serratelli of illegal partisanship for lambasting Obama's support of abortion rights.

In a column posted on the Diocese of Paterson's website and published in its weekly newspaper, Serratelli also compared Obama to King Herod, the biblical monarch who ordered the death of John the Baptist.

The bishop did not refer to Obama by name but only as "the present democratic (sic) candidate."

Under federal tax law, nonprofit groups — including religious organizations — are prohibited from intervening in campaigns for public office by endorsing or opposing candidates.

Candidates' tax-cut rhetoric swamps voters

From the Seattle Times:

In an outbreak of class warfare, John McCain and Barack Obama swapped sharply worded charges over tax cuts Saturday, each accusing the other of shortchanging middle-income Americans at a time of economic hardship for millions.

McCain, in a paid weekly radio address and at a North Carolina rally, fired the first volley, likening Obama to the socialist leaders of Europe and saying he wanted to "convert the IRS into a giant welfare agency, redistributing massive amounts of wealth at the direction of politicians in Washington."

Obama responded at a St. Louis rally that attracted 100,000 people, saying his rival "wants to cut taxes for the same people who have already been making out like bandits, in some cases literally."

"John McCain is so out of touch with the struggles you are facing that he must be the first politician in history to call a tax cut for working people 'welfare,' " Obama said.

Based on the candidates' tax proposals, Obama would provide more assistance to low-income and middle-income taxpayers than McCain.

Take a family earning the national median income of $50,233, as calculated by the Census Bureau for 2007. The family would pay $4,837 in federal income taxes for 2009 under McCain's plan, vs. $4,309 under Obama's proposal, according to a mathematical program that University of Southern Maine economics professor Jeffrey Gramlich helped develop.

Biden defends Obama tax-cut plan in Wash

From the Associated Press:

Democratic vice presidential candidate Joe Biden said Sunday that a Barack Obama administration would help the middle class by cutting its taxes, answering Republican claims that Obama's plan represented redistribution of wealth.

Republican presidential candidate John McCain on Saturday likened Obama to the socialist leaders of Europe, saying the Democrat wanted to "convert the IRS into a giant welfare agency, redistributing massive amounts of wealth at the direction of politicians in Washington."

In response, Biden on Sunday repeatedly linked McCain to President Bush's tax policies, saying that the wealthy and big corporations have received millions of dollars in tax cuts that could have gone to the middle class and small businesses.

"It's not just because it's fair, it's what makes the economy go. The rich do fine when the middle class is going," Biden told an audience at a rally with Washington Gov. Chris Gregoire and other state Democrats vying for office. Thousands of supporters filled Cheney Stadium in this heavily blue-collar region about 40 miles south of Seattle.

"John McCain has been a party to the most significant redistribution of wealth in American history and it has been all the wrong way," he said. "There's not one fundamental economic issue that John McCain disagrees with George Bush on."

Joe the Plumber Eligible for Obama Tax Cut?

From ABC News.com:

ABC News' Chris Bury is outside Toledo, near the home of Samuel Joseph Wurzelbacher, a/k/a "Joe the Plumber," and reports that Wurzelbacher -- such a key part of Sen. John McCain's critique of Sen. Barack Obama's economic proposals -- acknowledged that he wants to purchase the plumbing business for $250-280,000, not that he would net that much in profits.

He would make much less, he said.

Which would seem to indicate that he would be eligible for an Obama tax cut, not that he would be subject to the tax increase from 36% to 39% Obama would impose on those making more than $200,000 per person, or $250,000 per family.

Wurzelbacher this morning told ABC News' Diane Sawyer that he was talking about, in Diane's words, the prospect, the hope that someday he would make $250,000.

"Well, exactly," he said. "Exactly. I mean, not that I don't want to be taxed. You have to be taxed. But to -- just because you work a little harder to have a little bit more money taken from you, I mean, that's scary. You know, as opposed to other people. I worked hard for it. Why should I be taxed more than other people?"

Diane asked, "If those people should not be taxed additionally, even though they're in the top 5% of America, what about people who make $1 million? Or $5 million?"

"Well, I mean, quite honestly, why should they be penalized for being successful?" Wurzelbacher asked. "I mean, that's what you're telling me. That's what it sounds like you're saying. That's wrong. Because you're successful, you have to pay more than everybody else? We all live in this country. It's a basic right. And Obama wants to take that basic right and penalize me for it, is what it comes down to. That's a very socialist view and it's incredibly wrong. I mean, $250,000 now. What if he decides, well, you know, $150,000, you're pretty rich, too. Let's go ahead and lower it again. You know it's a slippery slope. When's it going to stop?"

McCain Unveils New Economic Plan

According to the International Herald Tribune, on Tuesday presidential hopeful John McCain announced a new economic proposal with a focus on helping American struggling in the uncertain economy. Earlier in the week Democratic nominee Barack Obama announced a new plan of his own, and with Obama polling better on economic issues it is no surprise that McCain was so quick to release a new plan.

"If I am elected president," McCain said near here, "I will help to create jobs for Americans in the most effective way a president can do this: with tax cuts that are directed specifically to create jobs and protect your life savings."

His plan, estimated to cost $52 billion, relies on an array of tax-relief measures: It would ease the burden on people withdrawing money from retirement accounts; reduce capital gains taxes on stock profits; accelerate tax write-offs for stock losses; and temporarily suspend the tax on unemployment insurance benefits.

"These are all targeted at people who have been hurt by the recent financial crisis: seniors, savers, workers, people who are trying to get to college," said McCain's chief economic adviser, Douglas Holtz-Eakin.

"We're putting a lot of cash into the hands of people because that's the near-term duress," he told Reuters separately. "What businesses are looking for right now are customers."

McCain Makes New 401k Proposal

From the CNN.com:

John McCain proposed suspending the requirement that investors begin drawing down their IRAs and 401Ks soon after age 70, his second major economic proposal of the week.

"We must also protect investors – especially those relying on their investments for retirement," McCain told the crowd at a campaign event in La Crosse, Wisconsin Friday.

"Current rules mandate that investors must begin to sell off their IRAs and 401Ks when they reach age 70 and one half. To spare investors from being forced to sell their stocks at just the time when the market is hurting the most, those rules should be suspended."

Earlier this week, McCain unveiled a $300 billion plan for the government to purchase mortgages at full value from banks and directly re-negotiate the terms with homeowners. The plan has drawn criticism from economists and from the Obama campaign, which has charged that it would mean major profits for lenders and saddle taxpayers with the cost.

Tax Profs Agree: Gov. Palin's Tax Returns Are Wrong

From Tax Prof Blog:

Jack Bogdanski (Lewis & Clark) & Bryan Camp (Texas Tech) have independently reviewed the tax issues raised by the release of Gov. Palin's 2006 and 2007 tax returns and financial disclosure form, as well as the remarkable opinion letter issued from Washington D.C. tax lawyer Roger M. Olsen. Jack and Bryan conclude that there are serious errors in Gov. Palin's returns as filed and that she and her husband owe tens of thousands of dollars in additional taxes.

Jack Bogdanski, There's No Debate: Palins Owe Thousands in Back Taxes:

There is no serious debate (at least, none that has been brought to our attention) about the fact that at least the amounts paid for the children's travel -- $24,728.83 in 2007, according to the Washington Post -- are taxable. The campaign's tax lawyer has got at least that much of the law, and perhaps more, wrong. ... The Palins, who had their tax returns done by HR Block, simply got it wrong. And the fact that the state payroll office got it wrong, too, doesn't erase the Palins' unpaid tax liability.

Bryan Camp, A Brief Analysis of Governor Palin's Tax Returns for 2006 and 2007:

The release of an opinion letter by attorney Roger M. Olsen dated September 30, 2008, has stirred up the pot once again about the accuracy of Sarah and Todd Palin’s 2006 and 2007 tax returns. Not only that, but Mr. Olsen’s letter raises a couple of new issues.

This paper focuses on five problems: three raised in the tax returns and two new ones raised by Mr. Olsen’s letter. Here’s a summary of the five problems and my conclusions, for those who want to cut to the chase. My analysis will follow.

1. The Palins did not report as income some $17,000 that Governor Palin’s employer (the State of Alaska) paid her as an “allowance” for her travel. Can they do that? Yes, most likely.

2. The Palins did not report as income some $43,000 that the State of Alaska paid the Governor as an “allowance” for her husband and children’s travel. Can they do that? No, most likely not.

3. The Palins deducted $9,000 on their 2007 return, claiming it was a loss from Mr. Palin’s snow machine racing activity. Can they do that? Most likely not, but more info could make the deduction o.k. If any of the above issues goes against the Palins they then risk getting hit with the section 6662 penalty for “negligence or disregard of rules or regulations.”

4. Can the Palins avoid the section 6662 negligence penalty by claiming that they reasonably relied either (a) on the W-2’s sent to them by their employer, which did not reflect either the $17,000 or the $43,000, or (b) on their tax return preparer H&R Block, or (c) on Mr. Olsen’s opinion letter dated September 30, 2008? The three reliance defenses are unlikely to succeed, but more info may make the (b) defense a good one.

5. Does Mr. Olsen have any exposure to sanctions by the IRS because of his letter? I believe Mr. Olsen’s letter probably violates 31 C.F.R. section 10.35. If so, he would be exposed to possible sanctions from the IRS Office of Professional Responsibility.

Palin tax returns for 2006 and 2007 released

From the Associated Press:

Sarah Palin is the breadwinner and husband Todd is, well — he takes a lot of deductions for his fishing and snowmachine racing careers, according to 2007 and 2006 federal tax returns released Friday.

Sarah Palin makes $125,000 a year as Alaska governor. Plus, since she took the job in December 2006, she hasn't paid taxes on the more than $17,000 she received in controversial per diem payments for working out of the family's lakeside home in Wasilla — some 575 miles from the capital of Juneau.

For the 2007 tax year, Todd Palin's self-employment brought him $66,893 in gross receipts — $49,893 from fishing and $17,000 from snowmachine racing. But, the returns show, he claimed so many deductions that he reported only $15,513 net profit from the fishing operation and claimed a $9,639 loss from his racing, leaving him with an overall net income of only $5,874. In addition, Todd earned $43,519 last year working part-time on the North Slope for BP Exploration.

The self-employment deductions left the Palins, who have four dependent children, with a 15 percent tax rate for 2007 and a rate of less than 10 percent for 2006. Todd Palin also deducted for the business use of their home in Wasilla. A fifth child was born to the couple this year.

An Associated Press analysis of the returns released by the McCain campaign also reveals that the Palins underpaid their estimated taxes with an April extension and likely owe interest.

Senator McCain's New Tax on Health Insurance

From TPM Café:

Strange winds are blowing in economic policy land. After failing to privatize social insurance, the Bush Treasury is now socializing private insurance. The Democratic presidential candidate is running on a tax reform platform that provides three times greater tax cuts for middle class families than the Republican candidate's platform. And the Republican candidate, after advocating deregulatory policies for 26 years in Congress, has now embraced the rhetoric of a populist regulatory reformer.

But the most unlikely wind of all is Senator McCain's health care proposal which by the end of his first term would increase taxes by $1362 for middle-income American families, while raising marginal tax rates on labor income by more than President Bush's tax cuts have reduced them.

Here's how the McCain plan works. Every family receives a refundable tax credit of $5000 that can be used only to purchase health insurance. Individuals receive $2500. McCain's advisers say the cost of this tax credit is $3.6 trillion dollars over ten years. They also say that their plan is revenue neutral because they introduce a new tax on employer-based health insurance that the Joint Committee on Taxation scores as raising $3.6 trillion over 10 years.

Currently, employee compensation in the form of employer-provided health insurance is exempt from both the personal income tax and FICA payroll taxes. Most employee payments for employer-based health insurance are also tax preferred. McCain's plan would eliminate these and other health-related tax expenditures.

The fact that the plan is revenue neutral means that the tax savings for families receiving tax cuts are exactly balanced by the tax increases for families whose taxes go up. But because the tax cuts are front loaded, after just a few years most American families will see their tax bills go up under the McCain plan.

The Latest from the Candidates on 10 Important Economic Issues

Election day is only a few weeks away, and although I’ve blogged recently on the Vice Presidential candidate’s tax views, it has been a while since I have spent much time researching the latest on Sen. McCain and Sen. Obama’s views on economic issues. In my efforts to decide which candidate to cast my vote for I gathered the following list of the candidate’s views on 10 important economic issues, and I hope the information will help all of you make an informed decision this November as well!

1. Small Business

McCain:

By helping small business owners afford new equipment and technology, McCain hopes to promote growth in new and small businesses. He has also proposed a small business health care plan that would take the form of a tax credit that would be purchased personally and could be transferred to a different job if the employee where to leave their current position.

Obama:

Obama has long been a supporter of raising minimum wage to keep up with the cost of living. To help those struggling with the uneven difference between the cost of living and wages Obama plans hopes to continually index the minimum wage with the cost of living. His small business health plan also includes a refundable credit of 50% for employers that pay their employee’s health insurance premiums.

2. Personal Taxes:

McCain:

Extending the Bush tax cuts that were put into place in 2001 and 2003 is something McCain has been clear on from the beginning. He’s also dedicated to eliminating the Alternative Minimum Tax, as he feels it is unnecessary and completely replaceable. In its place, McCain hopes to put into place a two-rate income tax code that would greatly simplify our tax system.

Obama:

Although at first he supported repealing the Bush tax cuts, Obama now claims that he would not fully repeal the cuts but adjust them. However, he does not support extending the cuts past their expiration date. Obama also once claimed that he wanted to double the capital gains rate, but has since lowered his stance leaving many to wonder if he actually intends to target capital gains taxes or not. Obama is a strong supporter of tax cuts for low wage and middle class families, and has proposed numerous tax cuts aimed at helping American families.

3. Energy Security

McCain:

McCain is well known for his adamant support of nuclear energy has strong views about energy and the conservation of it. While he recognizes the threat of global warming, he still feels that nuclear energy is a safe and efficient way to go. McCain also supports offshore drilling as relief for high prices at the gas pump, and feels exploring other expensive energy options is simply not smart or affordable for our economy at this time.

Obama:

Taking pains to look into any and all alternative energy sources, Obama is not the biggest fan of nuclear energy as a main source. He is honest about gas prices, and has admitted that he understands the strain Americans are under. However, he does not support offshore drilling as a solution. However, in an attempt to push through some of his own policies on energy independence, he voted for limited offshore drilling in addition, as a compromise.

4. Real Estate & Foreclosures

McCain:

Though both candidates agree the real estate market is in trouble, they have slightly different takes on how the governments should intervene. McCain wants to offer limited financial aid and advice to borrowers, but with strict rules, restrictions, and guidelines. He also feels home rescue efforts are dealt with best within local communities and would provide additional funding to make that possible.

Obama:

Taking a strong defense against predatory loans, if elected Obama would work to create a $10 billion fund to help victims of such loans. He is appalled by the government’s willingness to bail out large investment banks in trouble, but reluctance to help individual citizens. In order to counteract this, Obama would create a 10% tax credit, awarded to any homeowner who does not itemize their taxes, and allow subprime borrowers to fight abusive lending practices. He would also set aside an additional $10 billion to maintain local government structures and authorize bankruptcy judges to reduce mortgage principal.

5. Health Care

McCain:

His voting record is limited on healthcare, but McCain still seems to have pretty strong views on the subject in this election season. His plans for overall healthcare seem to pertain especially to children without insurance as well as senior citizens. He has claimed that he would like to get health insurance to the 11 million children in this country without it, and also hopes to match funds for senior citizen’s prescription drugs. He did however vote against including prescription drugs under Medicare, a decision that has upset a lot of voters hoping to see large change in the healthcare system.

Obama:

Obama feels so strongly that healthcare should be available to every American, that he would like it to be a universal right, like our neighbors in Canada. Obama hopes to use money from ending the Iraqi war to make healthcare more affordable for every American. He also feels strongly about obesity, stating that by reducing the obesity rate we can save billions in wasted health care. Obama knows taking on insurance companies is a messy but necessary job in making healthcare as well as prescriptions reasonable. He also feels the terminally ill should never have to worry about money, and the right to live should be clearly theirs regardless of their financial status.

6. Mortgage Giant Rescue

McCain:

Although he missed the senate vote to give aid to Fannie and Freddie through temporary authority from the Treasury, McCain still supports the decision. He would like to replace the agencies management as well as end their lobbying and stop company dividends. Like so many others, McCain feels it is necessary to make sure companies like this do not collapse.

Obama:

Although he also supports providing aid to Fannie and Freddie, Obama does not support protecting the investors or CEOs involved with them. In addition to missing the vote for the federal bailout, Obama also missed voting for the housing bill president Bush signed into law in July.

7. Balanced Budget

McCain:

Well known for his strong dislike of earmarks, McCain vows he is very dedicated to cutting wasteful spending and balancing the budget. He was one of two republicans who voted in 1995 and 1997 to take social security off budget, and supports the balanced budget amendment, which would require an annual balanced budget. With the money he plans on gaining from cutting taxes, McCain plans on putting the money into Medicare, social security, debt reduction, and tax cuts. However, he also wants to enforce existing spending caps later on.

Obama:

By ending the war on Iraq, and taking away tax cuts for the wealthiest Americans, Obama plans to save billions of dollars and use the funds towards debt and budget crisis within our own country. Although Obama voted against a bill to reduce overall federal spending by $40 billion he claims he did not support the bill because it reduced funding for Medicaid, conservation, Medicare, agriculture, employee pensions, and student loans.

8. Free Trade

McCain:

John McCain feels globalization is an opportunity, and in 1999, he stated “we are in a global marketplace, and that is exceptionally good news for American families. Withdrawing from it is not just inadvisable, it is impossible. Free trade is indispensable to our prosperity. In other words, the less America trades the poorer America will be.” McCain thinks we need to reduce, not restrain, barriers to trade with other countries so we can profit from such goods. He supports NAFTA, GATT, and WTO. However, some critics feel McCain’s feelings towards free trade are too open, and that he is not fully taking safety measures and foreign policy issues into account.

Obama:

Obama feels free trade is a great opportunity, but one that needs to be fairly regulated. He has said he feels it is important to keep safety, strong labor, and environmental standards in mind. In February of 2008 he explained, “it is absolutely critical that we engaged in trade, but it has to be viewed not just through the lens of Wall Street, but also Main Street, which means we've got strong labor standards and strong environmental standards and safety standards, so we don't have toys being shipped in the US with lead paint on them.” Obama also feels NAFTA needs to be amended, and is a strong fighter for not just free trade, but fair trade.

9. The War in Iraq

McCain:

Due to it’s high costs the war has become a top economic issue in this election season. It is also an issue the candidates strongly disagree on. McCain is a strong supporter of the war, still calling it a “war on terror.” He even went as far to say Obama would “rather lose a war in order to win a political campaign." Not as concerned about what the war is costing the country, McCain feels it is well worth it for the safety if our citizens.

Obama:

Strongly opposing the war, Obama feels it is not only disrespectful and embarrassing occupying Iraq, but a complete waste of money. At a primary debate Obama claimed, “we have spent billions of dollars, lost thousands of lives. Thousands more have been maimed and injured as a consequence and are going to have difficulty putting their lives back together again. This has undermined our security. In the meantime, Afghanistan has slid into more chaos than existed before we went into Iraq.”

10. Recession

McCain:

Up until very recently McCain was against the term “recession”, stating earlier that “part of the problem in any recession is psychological. I'm still optimistic that nothing is inevitable.” He felt by doing things like eliminating the AMT and permeating tax cuts we could prevent a recession. However, just this past week both candidates claimed within 24 hours of each other that the term “recession” is exactly the term you could use to describe our economies status at this point.

Obama:

Taking a strong opinion on the economy, Obama feels it’s very weak and a recession is a reality we all need to face. “The news with Freddie Mac and Fannie Mae, I think, along with the unemployment numbers, indicates that we’re fragile,” Obama stated earlier in the month. However, he arose both applause and criticism when he stated he still dislikes Bush’s tax cuts and feels his must take place regardless of recession “even if we’re still in a recession, I’m going to go through with my tax cuts,” Obama said. “That’s my priority.”

Biden and Palin – Comparing and Contrasting their Tax Views

Over the past week there has been a lot of media attention on the United States economy. With huge government buyouts, and record-breaking drops in the stock market, Americans are looking to the Presidential candidates for more information on their tax and economic plans.

In the past week weeks I have given an in depth look at both Vice Presidential candidate’s (see the entries on Sen. Joe Biden and Gov. Sarah Palin), and with the recent developments in our economy I thought it prudent to also compare the differences in their respective tax views on a few key issues.

Balanced Budget:

Joe Biden:

Senator Biden feels strongly that a balanced budget should be high up on the next president’s priority list. On top of consistently voting for what he believes were fair and balanced budget amendments since 1997, Biden has also voted against bills he felt would lead to an unbalanced budget. In 1990, Biden voted against George H. W. Bush’s budget bill, which aimed to raise taxes drastically over a five-year period. In 2000, Biden also voted against making tax cuts a priority over national debt reduction.

Biden’s own budget plan for the next few years includes cutting funding for the war (by which he hopes to generate over $100 billion in federal revenue), and eliminating tax cuts for the wealthiest Americans. He also plans on eliminating tax cuts for investment on dividends – which he claims could generate $195 billion in revenue over time.

Sarah Palin:

From the moment Palin took office as the Governor of Alaska, she began looking for ways to cut spending in all areas of the government. By cutting local project programs, selling a corporate jet, firing unnecessary government staff, and directing state agencies to reduce excess spending, she was able to reduce the states spending by $124 million. However, a $7 billion education and savings plan, new ice rink, and other local investments eventually led her state into debt. While the governor made many positive changes to Alaska and provided youth and cultural opportunity, debate rages at to whether her cuts were effective or not.

The difference:

Both candidates obviously agree that balancing the budget is an important task, though possibly on different levels. While Biden has experience working as a Senator to fix the national budget, Palin’s experience is limited to the state level. Without further statements from Palin herself, it’s hard to tell exactly what her plans for the budget are on the national level.

Gasoline Prices, Taxes, and Solutions:

Biden:

Knowing our dependence on oil and need for change, Biden has outlined multiple ways to help fix our countries current energy crisis. While other candidates have supported a gas tax holiday, Biden opposes the concept claiming that is merely a temporary solution. By pushing to reduce our dependence on oil entirely, Biden hopes to ease the demand for fossil fuels and also fight global warming. In 2005 he voted yes to bills that aim to significantly reduce oil by 2025, and for tax incentives to encourage energy production and conservation. He also voted against multiple bills promoting oil leasing programs in Alaska’s ANWR.

Palin:

A strong supporter of a gas tax holiday, Palin feels there is plenty of oil available for drilling in this country. Alaska has some of the highest gas prices in the country, and to help out citizens of her state Palin signed a gas tax holiday into law, and also pushed to get one time energy rebates sent out to Alaska taxpayers. Another one of Palin’s energy programs was known as Alaska’s “energy efficient month,” where the government provided incentives for reduced energy consumption. Although Palin has achieved some success in helping Alaska’s energy problems many wonder whether or not she will be able to do the same on the national level as the programs were made possible by windfall taxes from oil companies drilling in Alaska.

The Difference:

The only real similarity between the candidates is the fact that they both realize we are in an energy crisis. While Biden plans to make our nation less dependent on petroleum, Palin is very vocal about her support for increased offshore drilling. Palin does claim she supports green energy projects, but views them of secondary importance.

Earmarks:

Biden:

It is no secret that senator Biden has quite an earmark record. His FY09 requests total about $330 million, and it has caused a lot of bad publicity for Biden. Although it is not uncommon for members of Congress to take advantage of earmark spending, it is not helpful for a campaign running on the idea of change in a time of economic uncertainty.

Palin:

Although she’s taken stride to criticize both Obama and Biden on their earmark spending, Palin does have a record of wasteful spending. The infamous “bridge to nowhere” project, which she first embraced and then, later, dropped, was estimated at about $398 million. Obama criticized Palin for the first time ever on September 6^th, and on her earmark policies in particular:

"I know the governor of Alaska has been saying she's change, and that's great," Obama said. "She's a skillful politician. But, you know, when you've been taking all these earmarks when it's convenient, and then suddenly you're the champion anti-earmark person, that's not change. Come on! I mean, words mean something, you can't just make stuff up."

The Difference:

While no one tries to say straight out they “favor” earmarks, Biden is, if at all, more open and honest about it. It was a considered risky move on Palin’s part to be so critical on earmarks when she had does have some history of them herself.

McCain Embraces Regulation After Many Years of Opposition

From Washington Post.com:

A decade ago, Sen. John McCain embraced legislation to broadly deregulate the banking and insurance industries, helping to sweep aside a thicket of rules established over decades in favor of a less restricted financial marketplace that proponents said would result in greater economic growth.

Now, as the Bush administration scrambles to prevent the collapse of the American International Group (AIG), the nation's largest insurance company, and stabilize a tumultuous Wall Street, the Republican presidential nominee is scrambling to recast himself as a champion of regulation to end "reckless conduct, corruption and unbridled greed" on Wall Street.

"Government has a clear responsibility to act in defense of the public interest, and that's exactly what I intend to do," a fiery McCain said at a rally in Tampa yesterday. "In my administration, we're going to hold people on Wall Street responsible. And we're going to enact and enforce reforms to make sure that these outrages never happen in the first place."

McCain hopes to tap into anger among voters who are looking for someone to blame for the economic meltdown that threatens their home values, bank accounts and 401(k) plans. But his past support of congressional deregulation efforts and his arguments against "government interference" in the free market by federal, state and local officials have given Sen. Barack Obama an opening to press the advantage Democrats traditionally have in times of economic trouble.

Greenspan: No McCain tax cuts without reduction

From the Associated Press:

Alan Greenspan says the country cannot afford tax cuts of the magnitude proposed by Republican presidential contender John McCain — at least not without a corresponding reduction in government spending.

"Unless we cut spending, no," the former Federal Reserve chairman said Friday when asked about McCain's proposed tax cuts, pegged in some estimates at $3.3 trillion.

"I'm not in favor of financing tax cuts with borrowed money," Greenspan said during an interview with Bloomberg Television. "I always have tied tax cuts to spending."

McCain has said that he would offset his proposed cuts — including reducing the corporate tax rate and eliminating the Alternative Minimum Tax that has plagued middle-class families — by ending congressional pork-barrel spending, unnecessary government programs and overhauling entitlement programs such as Medicare and Social Security.

Democrats pounced on Greenspan's comments, in part because McCain professed last year that he was weaker on economics than foreign affairs and was reading Greenspan's memoir, "The Age of Turbulence," to educate himself.

"Obviously he needs to go back to that book and study it some more," Sen. Claire McCaskill, D-Mo., said during a conference call arranged by the campaign of Democratic nominee Barack Obama.

McCaskill said eliminating congressional earmark spending — estimated at $17 billion annually — cannot offset McCain's proposed tax cuts.

Obama Admits Tax Hikes Could Harm Economic Growth

As many of you may have already heard, earlier in the week Obama was interviewed by George Stephanopoulos and acknowledged that tax hikes hurt the economy.

"I think we've got to take a look and see where the economy is. I mean, the economy is weak right now. The news with Freddie Mac and Fannie Mae I think, along with the unemployment numbers, indicates that we're fragile."

Separating Palin Fact from Palin Fiction

It seems like every other day there is a new rumor about Vice Presidential Nominee Sarah Palin. Yesterday I posted an entry taking a deeper look at the truth about her tax views, but there are dozens of other non-tax related stories floating the Internet about Palin. Below are some of those rumors – either true or debunked – from a list compiled by Charlie Martin of Pajamas Media, who took the time to separate the fact from fiction in recent rumors about the Governor.

• No, Willow and Piper are not named for witches on TV. Among other things, Willow was born before Buffy came on TV, and Piper was born before Charmed.
• Yes, it appears that she has a Big Dipper tattooed on her ankle. She lost a bet.
• No she was not a member of the (wild-eyed libertarian) Alaska Independence Party, although her husband once was.
• No, she was never a Pat Buchanan supporter – even when Buchanan claims she was, she was on the board of Steve Forbes’ campaign in Alaska.
• No, Buchanan does not support her now – in fact, he is supporting Obama. Buchanan did think her speech was amazing, but then so do 80 percent of the people who saw it.
• Yes, she was apparently pregnant when she got married
• Yes, barring Immaculate Conception virgin birth, Bristol appears to have had sex with her fiancee. No, Bristol didn’t receive only “abstinence-only” sex ed.
• No, it wasn’t/won’t be [bad tense, has not happened yet] a shotgun wedding; Bristol and Levi been engaged for a good while according to Levi’s mother. It was either an accident or just an unconventional order.
• Yes, she did try, clearly unsuccessfully, to get Bristol married off to her fiancée before the story came out.
• Yes, she did fire the public safety guy — but he said in the Anchorage paper that, for the record, she never, and no one else in her administration ever, tried to make him fire her ex-brother-in-law.
• And yes, the state trooper (her sister’s ex-husband) she was worried about did: tase her 10 year old nephew; drive his state patrol car while drinking or drunk; did threaten to “bring her down”; and did threaten to murder her father and sister if they dared to get an attorney to help with the divorce.
• Yes, the state trooper was suspended when he was put under a court protective order.
• No, the trooper wasn’t fired.
• Yes, she did try to cut her own salary as mayor by $4000 a year; yes, she had voted against the $4,000 a year raise while on the city council.
• No, she didn’t cut funding for unwed mothers; yes, she did increase it by “only” 354 percent instead of 454 percent, as part of a multi-year capital expenditures program. No, the Washington Post doesn’t appear to have corrected their story. Even after this was pointed out in the comments on the story.
• No, she didn’t cut special needs student funding; yes, she did raise it by “only” 175 percent.
• Yes, she did ask the librarian if some books could be withdrawn because of being offensive; no, they couldn’t; yes, it was “rhetorical, at least as was reported contemporaneously in 1996
• No, the list of books she wanted to ban that’s being passed around is not real; among other things, it includes a number of books published after her time in office there.
• Yes, she apparently believes in some variant of intelligent design.
• No, she didn’t try to force the schools to teach it; she said if someone brought it up, it was an appropriate subject for debate.
• No, she doesn’t believe in “abstinence only” education. Yes, she thinks abstinence is an effective way of preventing pregnancy. Duh. Yes, she believes kids should learn about condom use in schools.
• Yes, she did smoke marijuana, when it was legal in Alaska. Yes, she apparently did inhale.
• Yes, she kills animals and eats them, and wears their skins.
• Yes, she was a beauty contest contestant.
• Yes, she was once a sportscaster.
• Yes, she has a college degree in journalism, but I won’t hold that against her, as she seems to have found honest work as well.
• Yes, she was vetted extensively, not just in three days — I’ve got links to press reports about people coming to Wasilla on May 29, and we had her on our Veepstakes at PJM from the first day we ran it.
• Yes, Sarah Palin’s acceptance speech was written by a speechwriter. Duh. No, none of Obama’s, McCain’s, nor Biden’s speeches were impromptu off the cuff things either.
• Yes, she did put the governor’s plane on eBay. No, that’s not how it was finally sold. Yes, McCain did say it wrong. Bad McCain.