Tax Talk 2007: Joe Biden

Our next presidential candidate to be featured in our series of interviews is Joe Biden, a Democrat and Delaware Senator.

Here are his unedited answers to my six questions:

1. What’s the single most important tax issue facing Americans today?

As I travel across this country, I see the middle class in trouble. For the past six years, the middle class has been burdened by an unfair tax code that doesn’t do anything to help working families at the same time it rewards the super-wealthy. It is bad tax policy and bad economic policy. A strong middle class is what drives our economy. Our tax policy should reflect that instead of betting that enormous tax breaks for the most wealthy will trickle down to the rest of us and not disappear into an offshore account. We should give tax breaks to those who need them and pay for it by taking back the tax cuts from those who don’t – those in the top one percent who make an average of $1.4 million dollars a year.

2. If you could only make one “quick fix” in terms of an extra credit, a disallowed deduction, whatever – what would it be?

I would repeal the billions in tax breaks that the oil industry gets for exploration and drilling. These companies will even admit they don’t need the money. In the Senate Judiciary Committee, I asked six executives from the largest energy companies in America if they needed the tax incentives. Not only did they all say they didn’t need the tax incentives, but they also said they would support my bill repealing President Bush’s handouts. It is an example of wasteful tax incentives. Instead we should be spending the money on research into renewable energy, new battery technology to build highly efficient vehicles here in the United States and other programs that would reduce our dependence on fossil fuels and oil.

3. Which is a more egregious tax on the American public: the AMT or the federal estate tax?

The AMT must be fixed. Tax Policy Center estimates that in coming years nearly 90 percent of married couples with two or more children and incomes between $75,000 and $100,000 will be subject to AMT. It is a stealth tax on middle class families.

4. It has been suggested that the IRS should be eliminated. Do you believe that this makes sense, and if you do, what would you establish in its place?

I would not eliminate the Internal Revenue Service. The real problem is not the organization, but the policies the organization must implement. Reversing President Bush’s unfair tax policy is the first step in improving the way we view our tax structure.

5. Do you think that significant tax cuts are possible considering the current state of the economy, specifically the escalating cost of the war in Iraq?

First, we can save revenue by ending the war in Iraq and bringing it to a responsible conclusion. We are spending $100 billion a year on Iraq, and we will have to address this boulder in the road before we can deal with other critical issues like healthcare and education. In addition, I would protect tax relief that benefits the middle class, but I would roll back President Bush’s tax cuts for those in the top 1% income bracket in America – those making over $435,000 a year.

As President, I won’t spend $1 trillion dollars to repeal the estate tax for millionaire heirs like Paris Hilton. Instead, I would exempt estates up to $7 million dollars and leave the tax in place for the remaining 7,000 or so estates that would have to pay it.

I would also roll back tax cuts on dividends and capital gains. In the 1990s, there was no lack of incentive to invest under the tax rates that were then in place. The current rates on capital gains and dividends were enacted as a short-term stimulus and then were extended. Allowing them to expire would not harm our economy.

Finally, we should eliminate tax loopholes. If someone owes taxes on investments, they should pay them. I would promote legislation that clarifies the definition of offshore tax shelters and imposes tougher requirements on U.S. taxpayers using secrecy definitions.

6. And just for fun, if Uncle Sam handed you a huge refund check right now, what would you do with it?

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Thanks, Senator!

For more information on Senator Biden’s policies, visit his website.

Kelly Phillips Erb

Kelly Phillips Erb is a tax attorney, tax writer, and podcaster.

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