Earlier in the week, I was featured as a guest on the Thom Hartmann Radio Show. During the segment we discussed the presidential candidates’ tax policies and how they affect Americans. It was an honor to be a guest on the show, and to discuss a topic that I love so much. I had a great time, and hope they invite me to be a guest again! Click the image below to download an MP3 of the interview.
Showing posts with label mccain. Show all posts
Showing posts with label mccain. Show all posts
Wednesday, July 09, 2008
How Many Economists Support McCain?
A few days ago the McCain camp announced that they had a document signed by 300 economists that “enthusiastically support” his “Jobs for America” economic plan. The immediate assumption was that McCain has built up a lot of support for his views, but upon further investigation, it appears that may not be the case. According to Politico.com, “it seems a good many of those economists don’t actually support the whole of McCain’s economic agenda. And at least one doesn’t even support McCain for president.
In interviews with more than a dozen of the signatories, Politico found that, far from embracing McCain’s economic plan, many were unfamiliar with — or downright opposed to — key details. While most of those contacted by Politico had warm feelings about McCain, many did not want to associate themselves too closely with his campaign and its policy prescriptions.”
Monday, June 16, 2008
Latest Good Reads
Gasoline, oil, and windfall profits taxes.
The Jason Furman Saga: has Obama fired his new economic adviser yet?
Economic conditions worsen, again.
CNN crunches Obama and McCain tax plans.
Second economic stimulus check: Obama’s economic plan.
4 ways to improve productivity when working from home.
Office attire - could Carrie make it in the boardroom?
The Jason Furman Saga: has Obama fired his new economic adviser yet?
Economic conditions worsen, again.
CNN crunches Obama and McCain tax plans.
Second economic stimulus check: Obama’s economic plan.
4 ways to improve productivity when working from home.
Office attire - could Carrie make it in the boardroom?
Thursday, May 22, 2008
8 Reasons to Support a Gas Tax Holiday
In order to keep the content on my blog somewhat balanced, I wanted to make an effort to counter my recent entry, Top 10 Reasons a Gas Tax Holiday is a Bad Idea. I was trying to come up with a top 10 list of reasons to support the holiday, but there were only really 8 things I could come up with. However, without much support, and Memorial Day just around the corner, the idea of supporting a gas tax holiday seems moot. Nonetheless, I have composed the following list of 8 reasons to support it.
1. It Sounds Good
A federal “gas tax holiday,” it just sounds so nice. With record high temperatures, a weakening economy, and an increased cost of living, don’t we deserve an extra holiday this summer?
2. You’ll Save $30 Bucks
Some estimates actually say that the average American will save as much as $60-$100. However, no matter what the actual savings amount turns out to be, it is still free money.
3. Immediate Stimulus
In addition to the benefit of getting free money, it would also be immediate. Every time you pumped gas into your car you will get the discount. You will not have to wait months and months for a rebate check to arrive – instead you will get instant savings.
4. Everyone Benefits
Although not everyone would benefit equally from the gas tax holiday (people who use public transportation would not really benefit), the holiday is designed to give everyone who uses a car some relief.
5. Other Reduced Prices
Because of the increased gas prices the cost of other products is also being raised. In addition, some companies such as airlines or shipping stores are adding a fuel surcharge to their products. Hopefully the benefits of a gas tax holiday would pass down to those purchasing these other products as well.
6. Will Not Increase Costs
Many economists are arguing that the gas tax break would do nothing as it would increase demand and raise prices. However, supporters of the holiday claim that since fuel is traded on the world market the actual effects on demand would be negligible.
7. Revenue from Oil Companies
To make up for the loss of federal revenue some are hoping to raise taxes on the large oil corporations who are seeing billions in profits. This would mean that the federal government would not have to cut construction jobs.
8. Pressure on OPEC
In addition to taxes on the oil companies, another idea surrounding the gas tax holiday is to pressure OPEC to release more fuel and help lower the demand. Although it would help lower prices, this is probably more of a downside as it continues to encourage reliance on foreign oils.
1. It Sounds Good
A federal “gas tax holiday,” it just sounds so nice. With record high temperatures, a weakening economy, and an increased cost of living, don’t we deserve an extra holiday this summer?
2. You’ll Save $30 Bucks
Some estimates actually say that the average American will save as much as $60-$100. However, no matter what the actual savings amount turns out to be, it is still free money.
3. Immediate Stimulus
In addition to the benefit of getting free money, it would also be immediate. Every time you pumped gas into your car you will get the discount. You will not have to wait months and months for a rebate check to arrive – instead you will get instant savings.
4. Everyone Benefits
Although not everyone would benefit equally from the gas tax holiday (people who use public transportation would not really benefit), the holiday is designed to give everyone who uses a car some relief.
5. Other Reduced Prices
Because of the increased gas prices the cost of other products is also being raised. In addition, some companies such as airlines or shipping stores are adding a fuel surcharge to their products. Hopefully the benefits of a gas tax holiday would pass down to those purchasing these other products as well.
6. Will Not Increase Costs
Many economists are arguing that the gas tax break would do nothing as it would increase demand and raise prices. However, supporters of the holiday claim that since fuel is traded on the world market the actual effects on demand would be negligible.
7. Revenue from Oil Companies
To make up for the loss of federal revenue some are hoping to raise taxes on the large oil corporations who are seeing billions in profits. This would mean that the federal government would not have to cut construction jobs.
8. Pressure on OPEC
In addition to taxes on the oil companies, another idea surrounding the gas tax holiday is to pressure OPEC to release more fuel and help lower the demand. Although it would help lower prices, this is probably more of a downside as it continues to encourage reliance on foreign oils.
Monday, May 19, 2008
Top 10 Reasons a Gas Tax Holiday is a Bad Idea
1. It’s Just a Gimmick
When it comes to campaigning, it is all about choosing the right words to use in your marketing. Anyone who remembers the phrases “weapons of mass destruction,” or “axis of evil” will know what I mean (how many times did we hear those phrases in the lead up to Operation: Iraqi Freedom?). In this election cycle, Senator Obama has made a strong effort to push the word “change,” which explains why the word is visible in almost every picture you see of Obama. Nonetheless the phrase “gas tax holiday” is merely another political slogan designed to encourage Americans to vote for a candidate.
2. Loss of Federal Revenue
If the federal government stopped collecting a tax on fuel, then it will be a direct loss of revenue for the government, plain and simple. With our economy continuing in a downward spiral, record breaking military expenses in the middle east, an ever increasing national debt, I doubt the government can afford to lose this source of revenue, let alone any.
3. Direct Impact on Working Families
If the government does not have revenue from gas taxes, then it is going to have a direct effect on people working in the construction industry. The tax levied on gasoline and diesel is what pays for highway and road construction. Without this money, the government would not be able to pay those working in this industry. Some estimates put the number of lost jobs at over 300,000, which does seem slightly inflated to me. However, any reduction of the tax collected from gasoline will definitely result in lost jobs.
4. Poor Quality Roads
The lack of federal transportation revenue will impact more then just those working in construction. The condition of our roads and highways is deteriorating, and without revenue to fix them the condition will only get worse. So a gas tax holiday may save you some money this summer, but you will probably regret the money this fall when you are stuck in hours of traffic on your way to work.
5. State Gas Taxes
The gas tax holiday only applies to the federal excise tax of 18.4 cents on gasoline and 24.4 on for diesel. However, these are not the only taxes that consumers pay on fuel. Nearly every state has their own tax, and some are upwards of 40 cents per gallon. The gas tax holiday would do nothing about these state fuel taxes.
6. Bad Message
Earlier in the week, polar bears were officially added to the added to the endangered species list. What does that have to do with a gas tax holiday? Well, exhaust fumes are bad for the environment and could lead to pollution and harm to the environment. Also, with the added threat of global warming looming, shouldn’t the government be discouraging motorists from using excess gasoline? In Europe, the taxes on fuel are higher then in the United States and consequently there is less gas consumption. If anything, our government should be encouraging people to reduce their gas consumption. How about increasing hybrid credits?
7. Increased Demand = Higher Prices
Many economists are claiming that lower prices will correlate directly to an increase in demand, which on the open market will likely increase the cost of fuel. Some argue that since gasoline is traded on the world market that we will not see a price increase. However, it is obvious that if gas was cheaper people would use more of it.
8. Continued Record Oil Profits
With the increased demand that would result from a gas tax holiday, some estimate that it would give even more revenue to the big oil corporations. These corporations already post record breaking profits every quarter for the last five years. Instead of lowering fuel taxes on consumers, why not increase taxes on the oil corporations?
9. Does Not Solve Anything
A gas tax holiday ignores the bigger problem; this country is dependent on foreign oil. It will do nothing to solve this problem. Gas prices are increasing at alarming rates and a small tax break is not going to stop prices from increasing in the long run.
10. Bottom Line: 30 Bucks
Let’s face it, all you really get under a gas tax holiday is about $30. Some estimates from Senator Clinton’s and Senator McCain’s camp say that this number is slightly higher, maybe $50. But what kind of effect is a $50 tax credit really going to have on the nation’s economy?
When it comes to campaigning, it is all about choosing the right words to use in your marketing. Anyone who remembers the phrases “weapons of mass destruction,” or “axis of evil” will know what I mean (how many times did we hear those phrases in the lead up to Operation: Iraqi Freedom?). In this election cycle, Senator Obama has made a strong effort to push the word “change,” which explains why the word is visible in almost every picture you see of Obama. Nonetheless the phrase “gas tax holiday” is merely another political slogan designed to encourage Americans to vote for a candidate.
2. Loss of Federal Revenue
If the federal government stopped collecting a tax on fuel, then it will be a direct loss of revenue for the government, plain and simple. With our economy continuing in a downward spiral, record breaking military expenses in the middle east, an ever increasing national debt, I doubt the government can afford to lose this source of revenue, let alone any.
3. Direct Impact on Working Families
If the government does not have revenue from gas taxes, then it is going to have a direct effect on people working in the construction industry. The tax levied on gasoline and diesel is what pays for highway and road construction. Without this money, the government would not be able to pay those working in this industry. Some estimates put the number of lost jobs at over 300,000, which does seem slightly inflated to me. However, any reduction of the tax collected from gasoline will definitely result in lost jobs.
4. Poor Quality Roads
The lack of federal transportation revenue will impact more then just those working in construction. The condition of our roads and highways is deteriorating, and without revenue to fix them the condition will only get worse. So a gas tax holiday may save you some money this summer, but you will probably regret the money this fall when you are stuck in hours of traffic on your way to work.
5. State Gas Taxes
The gas tax holiday only applies to the federal excise tax of 18.4 cents on gasoline and 24.4 on for diesel. However, these are not the only taxes that consumers pay on fuel. Nearly every state has their own tax, and some are upwards of 40 cents per gallon. The gas tax holiday would do nothing about these state fuel taxes.
6. Bad Message
Earlier in the week, polar bears were officially added to the added to the endangered species list. What does that have to do with a gas tax holiday? Well, exhaust fumes are bad for the environment and could lead to pollution and harm to the environment. Also, with the added threat of global warming looming, shouldn’t the government be discouraging motorists from using excess gasoline? In Europe, the taxes on fuel are higher then in the United States and consequently there is less gas consumption. If anything, our government should be encouraging people to reduce their gas consumption. How about increasing hybrid credits?
7. Increased Demand = Higher Prices
Many economists are claiming that lower prices will correlate directly to an increase in demand, which on the open market will likely increase the cost of fuel. Some argue that since gasoline is traded on the world market that we will not see a price increase. However, it is obvious that if gas was cheaper people would use more of it.
8. Continued Record Oil Profits
With the increased demand that would result from a gas tax holiday, some estimate that it would give even more revenue to the big oil corporations. These corporations already post record breaking profits every quarter for the last five years. Instead of lowering fuel taxes on consumers, why not increase taxes on the oil corporations?
9. Does Not Solve Anything
A gas tax holiday ignores the bigger problem; this country is dependent on foreign oil. It will do nothing to solve this problem. Gas prices are increasing at alarming rates and a small tax break is not going to stop prices from increasing in the long run.
10. Bottom Line: 30 Bucks
Let’s face it, all you really get under a gas tax holiday is about $30. Some estimates from Senator Clinton’s and Senator McCain’s camp say that this number is slightly higher, maybe $50. But what kind of effect is a $50 tax credit really going to have on the nation’s economy?
Wednesday, May 14, 2008
Sen. John McCain: a Deeper Look at his Tax Views
As the fight for the Democratic nomination continues, the voters decided that Senator John McCain would get the Republican nomination months ago. Although there were a few other conservative candidates, they all dropped out early on in the election cycle. However, other Republicans frequently criticize McCain for being too liberal and not representing the whole party. Who can forget when attention-starved, political author Anne Coulter announced she would vote for Hilary Clinton over John McCain?
This is the third and final entry in my deeper look at the presidential candidate’s tax views. Unlike Clinton and Obama, McCain’s economic views represent the views of conservatives with tax cuts for higher income individuals and no tax increases.
Make Tax Increases More Difficult
One of the most radical tax views of McCain is his desire to make additional tax increases more difficult. He hopes to follow California Republicans in requiring a 3/5 super majority for any tax increases. This will, in effect, give the minority in congress more power and leverage to negotiate trades for important votes. However, in given the current economic uncertainty, such a barrier could have devastating effects. This is especially the case under McCain’s plan to increase our military presence around the world. It will cost the government billions of dollars. But without proper funding, a war cannot continue. Yet, with McCain’s plan it would be difficult to pass tax increases to cover these military expenses.
Alternative Flat Tax System
Although McCain does not support an outright switch to a flat tax, he is making strides towards one. Like any Republican, McCain is not a big fan of our current progressive tax system. His plan is to expand the 15% tax bracket to lower taxes on millions of middle income Americans. Under his plan, the ceiling for the 15% bracket would increase from $43,050 to $70,000 for married couples filing jointly, and from $25,750 to $35,000 for single taxpayers.
The more revolutionary aspect of his plan is the offering of an optional flat tax system. This system would be held out as an alternative to the current progressive system and the myriad of credits, exemptions, deductions, carryover rules, and different tax rates for different forms of income. McCain’s plan would be to tax all taxpayers on all income sources at one single rate. The flat rate would be set at 19% for first two years, 17% thereafter.
McCain’s tax cut plan is estimated to cost the federal government about $240 billion in the next five years, and over $500 in 10 years. However, these are early estimates and with current inflation levels, his plan could cost even more.
When speaking about his plan to fix the tax code, McCain claimed that, "the tax code now requires $140 billion of American families' income to prepare their tax returns." Unfortunately, he greatly overestimated this number. The exact cost attributed to individual taxpayers was only $65 billion, and some estimate the total at a much lower $20 billion. Although McCain's camp said he was drawing his figures from a 2005 report by the President's Advisory Panel on Federal Tax Reform, the study was not just on families, it included both individual and business taxes
Gas Tax Holiday
The Gas Tax Holiday is one of the few tax proposals that are supported by both McCain and Clinton. As I have mentioned before, this plan is to stop the collection of federal taxes on gasoline and diesel from Memorial Day to Labor Day. Currently the federal government collects an excise tax in the amount of 18.4 cents for gasoline and a 24.4 cents for diesel. Some estimates have cited average savings of $70 per person, but the exact numbers are widely disputed.
Although the phrase “gas tax holiday” sounds good, this holiday is getting a lot of criticism for being nothing more then a campaign gimmick. Within a few days of the announcement 200 of the top economists came forward saying the plan was worthless. Many claim that lower prices would lead to more demand, and only the big oil companies would get anything out of the holiday.
Repeal Alternative Minimum Tax
In addition to lowering taxes on middle income families, McCain also wants to repeal the Alternative Minimum Tax (AMT), which would basically be a tax cut for the upper middle income taxpayers.
“I believe that we've got to simplify the tax code,” claims McCain. “But one of the first areas we've got to go after is the alternate minimum tax, which is going to eat in to 20 million American families if we don't eliminate it, and very quickly.”
Although the AMT is very unpopular it generates billions of dollars in federal revenue. In addition, remember that the president does not have the power to just remove a tax – only congress does. If McCain wants this tax fully repealed, then he is going to have to strike a deal with congress, and it seems highly unlikely that he would get enough support to make this drastic change.
Extend President Bush Tax Cuts
Although McCain had originally voted against the Bush tax cuts, he now claims to support an extension of the plan. “I voted to extend them because it would have the effect of having a tax increase,” claimed McCain when asked about his flip-flop. “The tax cuts have increased revenues enormously. They've been very beneficial. The problem is that spending has lurched completely out of control. My proposal was to restrain spending. I do not support tax increases. And the effect of not making them permanent would have the effect of a tax increase.”
Unfortunately, changing your view on important issues is suicide for a presidential hopeful. Think back to the 2004 election, and how strongly the Bush campaign pushed the flip-flop label on John Kerry. Voters do not tend to vote for someone they feel will flip on an issue, yet if McCain wants to win the election he is going to need to.
Cut Corporate Tax Rates
Another tax cut McCain supports is cutting the corporate tax rate from 35% to 25%. The United States has one of the highest corporate tax rates in the developed world. If we want businesses to stay in this country then we need to keep our tax rates competitive. McCain’s plan does just that.
Revisions to Charitable Contributions
Another controversial component of McCain’s tax plan is his hope to revise the current laws on charitable contributions. Under his plan, taxpayers that give charitable contributions in the form of stock, real estate, bonds, or artwork would not be able to take a tax deduction for the current, inflated value of the gift. Instead, they would only be allowed to take a deduction for the original cost of the asset.
McCain claims this would only affect the richest Americans who take advantage of this loophole to reduce their tax liabilities. However, the plan has been met with loud criticism. The current administration has publicly stated “anything that would take money away from a charity is a step in the wrong direction.”
“Wealthy Americans shouldn’t get a tax write-off for contributing a fancy painting or an overvalued stock,” responded a spokesperson for McCain. “Bush is protecting his wealthy donor base at the expense of the middle class.”
Health Insurance Tax Credit
When it comes to health care, McCain wants to give more responsibility and control to individual patients. His plan would remove current tax breaks given to employers to provide health insurance, and replace it with a $5,000 credit to families who purchase their own health care. He suggests that it would encourage choice and competition in the market, thus lowering current prices. “I’ll work tirelessly to address the problem,” Mr. McCain claimed in a speech at the University of South Florida. “But I won’t create another entitlement program that Washington will let get out of control. I won’t do it. Nor will I saddle states with another unfunded mandate.”
This is the third and final entry in my deeper look at the presidential candidate’s tax views. Unlike Clinton and Obama, McCain’s economic views represent the views of conservatives with tax cuts for higher income individuals and no tax increases.
Make Tax Increases More Difficult
One of the most radical tax views of McCain is his desire to make additional tax increases more difficult. He hopes to follow California Republicans in requiring a 3/5 super majority for any tax increases. This will, in effect, give the minority in congress more power and leverage to negotiate trades for important votes. However, in given the current economic uncertainty, such a barrier could have devastating effects. This is especially the case under McCain’s plan to increase our military presence around the world. It will cost the government billions of dollars. But without proper funding, a war cannot continue. Yet, with McCain’s plan it would be difficult to pass tax increases to cover these military expenses.
Alternative Flat Tax System
Although McCain does not support an outright switch to a flat tax, he is making strides towards one. Like any Republican, McCain is not a big fan of our current progressive tax system. His plan is to expand the 15% tax bracket to lower taxes on millions of middle income Americans. Under his plan, the ceiling for the 15% bracket would increase from $43,050 to $70,000 for married couples filing jointly, and from $25,750 to $35,000 for single taxpayers.
The more revolutionary aspect of his plan is the offering of an optional flat tax system. This system would be held out as an alternative to the current progressive system and the myriad of credits, exemptions, deductions, carryover rules, and different tax rates for different forms of income. McCain’s plan would be to tax all taxpayers on all income sources at one single rate. The flat rate would be set at 19% for first two years, 17% thereafter.
McCain’s tax cut plan is estimated to cost the federal government about $240 billion in the next five years, and over $500 in 10 years. However, these are early estimates and with current inflation levels, his plan could cost even more.
When speaking about his plan to fix the tax code, McCain claimed that, "the tax code now requires $140 billion of American families' income to prepare their tax returns." Unfortunately, he greatly overestimated this number. The exact cost attributed to individual taxpayers was only $65 billion, and some estimate the total at a much lower $20 billion. Although McCain's camp said he was drawing his figures from a 2005 report by the President's Advisory Panel on Federal Tax Reform, the study was not just on families, it included both individual and business taxes
Gas Tax Holiday
The Gas Tax Holiday is one of the few tax proposals that are supported by both McCain and Clinton. As I have mentioned before, this plan is to stop the collection of federal taxes on gasoline and diesel from Memorial Day to Labor Day. Currently the federal government collects an excise tax in the amount of 18.4 cents for gasoline and a 24.4 cents for diesel. Some estimates have cited average savings of $70 per person, but the exact numbers are widely disputed.
Although the phrase “gas tax holiday” sounds good, this holiday is getting a lot of criticism for being nothing more then a campaign gimmick. Within a few days of the announcement 200 of the top economists came forward saying the plan was worthless. Many claim that lower prices would lead to more demand, and only the big oil companies would get anything out of the holiday.
Repeal Alternative Minimum Tax
In addition to lowering taxes on middle income families, McCain also wants to repeal the Alternative Minimum Tax (AMT), which would basically be a tax cut for the upper middle income taxpayers.
“I believe that we've got to simplify the tax code,” claims McCain. “But one of the first areas we've got to go after is the alternate minimum tax, which is going to eat in to 20 million American families if we don't eliminate it, and very quickly.”
Although the AMT is very unpopular it generates billions of dollars in federal revenue. In addition, remember that the president does not have the power to just remove a tax – only congress does. If McCain wants this tax fully repealed, then he is going to have to strike a deal with congress, and it seems highly unlikely that he would get enough support to make this drastic change.
Extend President Bush Tax Cuts
Although McCain had originally voted against the Bush tax cuts, he now claims to support an extension of the plan. “I voted to extend them because it would have the effect of having a tax increase,” claimed McCain when asked about his flip-flop. “The tax cuts have increased revenues enormously. They've been very beneficial. The problem is that spending has lurched completely out of control. My proposal was to restrain spending. I do not support tax increases. And the effect of not making them permanent would have the effect of a tax increase.”
Unfortunately, changing your view on important issues is suicide for a presidential hopeful. Think back to the 2004 election, and how strongly the Bush campaign pushed the flip-flop label on John Kerry. Voters do not tend to vote for someone they feel will flip on an issue, yet if McCain wants to win the election he is going to need to.
Cut Corporate Tax Rates
Another tax cut McCain supports is cutting the corporate tax rate from 35% to 25%. The United States has one of the highest corporate tax rates in the developed world. If we want businesses to stay in this country then we need to keep our tax rates competitive. McCain’s plan does just that.
Revisions to Charitable Contributions
Another controversial component of McCain’s tax plan is his hope to revise the current laws on charitable contributions. Under his plan, taxpayers that give charitable contributions in the form of stock, real estate, bonds, or artwork would not be able to take a tax deduction for the current, inflated value of the gift. Instead, they would only be allowed to take a deduction for the original cost of the asset.
McCain claims this would only affect the richest Americans who take advantage of this loophole to reduce their tax liabilities. However, the plan has been met with loud criticism. The current administration has publicly stated “anything that would take money away from a charity is a step in the wrong direction.”
“Wealthy Americans shouldn’t get a tax write-off for contributing a fancy painting or an overvalued stock,” responded a spokesperson for McCain. “Bush is protecting his wealthy donor base at the expense of the middle class.”
Health Insurance Tax Credit
When it comes to health care, McCain wants to give more responsibility and control to individual patients. His plan would remove current tax breaks given to employers to provide health insurance, and replace it with a $5,000 credit to families who purchase their own health care. He suggests that it would encourage choice and competition in the market, thus lowering current prices. “I’ll work tirelessly to address the problem,” Mr. McCain claimed in a speech at the University of South Florida. “But I won’t create another entitlement program that Washington will let get out of control. I won’t do it. Nor will I saddle states with another unfunded mandate.”
Study Shows Capital Gains Increase Won’t Impact Investing
A study from Bloomberg has come out claiming that affluent investors are not likely to alter their investments if the capital gains tax rate were increased by a small margin. This study goes against claims from Sen. John McCain who has claimed that it would stop upper income Americans from investing.
According to the Bloomberg and Los Angeles Times investor poll, “69 percent of upper-income investors say a raise in the capital gains tax to 20 percent from 15 percent wouldn't cause them to sell assets they would otherwise hold.”
“The poll of 2,208 adults nationwide included 607 investors with household incomes of at least $100,000 and was conducted May 1 to May 8. The investor group has a margin of sampling error of plus or minus 4 percentage points.”
The nationwide poll has a large sample size, and was conducted by two credible news outlets. However, the poll does not mention how investors would react to Obama’s plan to nearly double the Capital Gains tax rate. I assume that it would be a lot lower then 69 percent.
According to the Bloomberg and Los Angeles Times investor poll, “69 percent of upper-income investors say a raise in the capital gains tax to 20 percent from 15 percent wouldn't cause them to sell assets they would otherwise hold.”
“The poll of 2,208 adults nationwide included 607 investors with household incomes of at least $100,000 and was conducted May 1 to May 8. The investor group has a margin of sampling error of plus or minus 4 percentage points.”
The nationwide poll has a large sample size, and was conducted by two credible news outlets. However, the poll does not mention how investors would react to Obama’s plan to nearly double the Capital Gains tax rate. I assume that it would be a lot lower then 69 percent.
Wednesday, April 23, 2008
McCain Tax Cuts Would Bloat Deficit Or Take Huge Spending Curbs
The Wall Street Journal had added this interesting article on the disadvantages of McCain’s tax plan. Below is picture that summarizes his plan, but you can check out the full article by clicking here.
Wednesday, February 20, 2008
Clinton, Obama, & McCain: The Good, Bad, & Ugly Candidate Tax Views
As the primary elections continue across the United States, I am keeping to my commitment to getting the candidate’s tax views more attention. So much attention is being placed on superficial topics that taxes are taking a back seat. Taxes and the economy will probably become a popular topic in the general election, but I strongly encourage every one to think taxes now! Read up on the candidate’s respective websites, and check out neutral information sources like SmartVoter.org.
At this point in the game there are only three major candidates left in the race. Each have quite different tax views. Below are the good, bad, and ugly tax views of each major remaining candidate.
Hilary Clinton
The Good
Let Bush’s Tax Cuts Expire
Ms. Clinton adamantly claims that the middle class has been ignored by the current administration and seeks to strengthen and grow the middle class and restore the basic bargain: "if you work hard and do your part, you can build a better life for yourself and your family." One method of doing so would be to let the Bush tax cuts expire. This may be a controversial view, but most liberals will agree that it’s essential for the improvement of the American economy. These tax cuts only go to the extremely wealthy individuals in the country and do nothing for the hard working American class. Although some argue that cutting taxes for the rich stimulates the economy, since these tax cuts were enacted the national debt has only increased. Most Americans are quick to judge any tax increase because no one likes paying more in taxes. However, I doubt any one reading this blog would be affected, as letting Bush’s tax cuts expire would only raise taxes on the super rich.
The Bad
Maintain Current Social Security Cap
Clinton supports retaining the current income cap on the Social Security tax, which is a good idea. Currently income over $102,000 is not subject to taxation from the social security tax. Therefore the top income earners do not pay the social security tax on their full income. Increasing the limit on the social security cap, or removing it all together, would create millions of dollars in additional federal revenue.
The Ugly
Mandatory Health Insurance
With heath care issues on the top of every one’s mind Clinton recently proposed the "American Health Choice Plan" which revolves around an individual mandate requiring everyone to have health insurance. Her plan would give more choices to taxpayers seeking health insurance without quite making it universally available through he federal government. Clinton claims her program would cost about $110 billion per year, but has not yet given any specific information on how the plan would be funded. The concept is not so bad on it’s own, but the lack of funding information makes this an ugly tax view.
Barack Obama
The Good
Tax Wealth More Than Regular Wages
One of the tax cuts enacted by President Bush was to drop the tax rate on capital gains from 20% to 15%. This was another tax break that specifically targets the wealthiest in this country who do not earn wages, but rather live off of investments and accumulated wealth. There’s no reason that capital gains should be taxed so much less then regular wages, and Obama agrees. By raising the tax back to 20% some studies estimate that an additional $100 billion in revenue could be generated for the federal government.
The Bad
New Tax Credits
Obama's tax plan features a prominent "Making Work Pay" credit that would offset federal taxes on the first $8,100 of a taxpayers earnings. It would essentially generate a credit of up to $500 for single persons or $1,000 per family. According to Obama this credit would eliminate income taxes for at least 10 million low-income Americans. The idea of lowering taxes for low paid working Americans is considered great by many liberals, but there isn’t really a need for a new credit to accomplish this. Instead, why not expand the Earned Income Tax Credit or the standard deduction amount rather than trying to get a new credit passed by codgers.
The Ugly
No Taxes For Senior Citizens
One of Obama’s tax proposals is to eliminate all federal taxes imposed on senior citizens making under $50,000 per years and not requiring them to file tax returns. This may be a good way to get the senior vote, but it’s much more complicated than it seems. First of all, senior citizens often have income from multiple sources including capital gains, dividends, Social Security, retirement plans, etc. Determining their exact income would still require the same effort as filing a tax return. Additionally, this plan gives special tax treatment to a group if individuals based solely on their age, which seems like borderline age discrimination. Why should a struggling single mother have to pay taxes on her $49,999.00 income when a retired grandmother would pay noting on the same income amount?
John McCain
The Good
Investment Tax Cuts
McCain is a strong supporter of lowering taxes to encourage economic growth, which is the dominant economic stance of the Republican party. Not only does he support renewing the Bush tax cuts, but he also favors numerous tax cuts. McCain hopes to reduce taxes on Capital Gains, Interest, Dividend, Investment income, and even corporate tax rates. And as if his tax cuts weren’t enough, McCain also supports a new rule that would require a 3/5-majority vote to raise taxes. In summary, McCain is a strong supporter of permanent tax cuts, and the Republicans love him for it.
The Bad
Continued War Funding
McCain is a strong supporter of the American military and the "War on Terror," with promises of a continued military presence in Iraq. According to his website, he believes that the answer to our current national security problems is to not "roll back our overseas commitments," but to increase the size of our Army and Marine Corps and continue the current War on Terror. McCain has recognize there is a problem with current military spending but has not provided any information on how to continue the military efforts while lowering the current $12 billion-per-month budget.
The Ugly
No Pledge Against Taxes
Although liberals typically support raising taxes to stimulate the economy, this view is very unpopular among republicans. McCain is one of the only republicans who ran for president this year who declined to sign the pledge put forth by Americans for Tax Freedom not to impose any new taxes or increase existing taxes. The conservative wing of the Republican Party are almost always against increasing taxes and this lack of a commitment could hurt his chances of winning the presidency.
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