Obama and McCain continue to battle it out about the issue that most Americans seems to care about right now: the economy.
To hear each talk, it just can’t get much worse (can it?). McCain spins Obama’s tax proposal as “the biggest tax increase since World War II.” Obama compares McCain’s plan to that of the Bush administration, which he labels “the most fiscally irresponsible in our history” and claims that McCain will make it worse.
With all of the rhetoric and hyperbole, it’s hard to know who has the best plan for most taxpayers. So,let’s ask the experts!
According to a new analysis by the nonpartisan Tax Policy Center, a joint venture between the Urban Institute and the Brookings Institution, Obama’s plan makes the most sense for Americans.
The TPC has estimated that Obama’s plan would lead to a boost in aftertax income for all but the highest earners. The TPC reports that Senator McCain’s tax cuts “would primarily benefit those with very high incomes, almost all of whom would receive large tax cuts that would, on average, raise their after-tax incomes by more than twice the average for all households.” In what the TPC describes as “marked contrast,” Senator Obama offers much larger tax breaks to low- and middle-income taxpayers and would increase taxes on high-income taxpayers. What would be the outcome? In particular, the TPC notes that “McCain’s reduced individual and corporate rates would improve economic efficiency and increase domestic investment, but the larger deficits he would incur to do so would reduce and could completely offset any positive effect.”
You can read an excerpt here.
What do you think? Does this change your mind at all?
Great! That’s just what we need! The bottom 50% of earners pay only 5% of the taxes in the country anyway, so lets make that amount even smaller. Nothing like people that don’t pay taxes voting on issues that affect people that do.
Want some new entitlement? Let’s just have a vote a make the people that earn more that we do pay for it! What a scam! We can get them to pay for everything we ever dreamed we wanted, and then some!
We’re gonna wind up as a socialist country sooner that I thought.
is this before or after Obama repeals the bush tax cuts?
You have to look not at the percentile of people, but the percentile of dollars. If the top 1% of the people make 20% of all income, shouldn’t they pay at least 20% of the taxes? And if the bottom 5% make 1% of the money, they should pay somewhere close to 1% of the taxes.
This analysis shows who the Republicans really support… the rich. And as for the rich helping the economy by creating new jobs, I don’t buy it. When given the chance, the general trend for them is to cut jobs and increase their own salaries. If companies keep cutting jobs, who’s going to buy the stuff sold by the companies laying them off? They shrink their own markets. Our tax system is not fair because the more money you have, the more loopholes you have to not pay tax. I’m guilty as an upper middle class person; I use them too, but it would be right to get rid of some of them to benefit the poorer ones.
Yes, those poorer people pay less tax percentage wise, but look at how few dollars they make and have to live off of. Those at the higher end of the scale have benefited more from the infrastructure provided by our government so they should be happy to pay out more in return. Also, those at the higher end of the scale may have worked hard to get what they have, but so have many people at the middle and bottom end of the scale. Warren Buffett and Bill Gates have even publicly stated that they don’t pay enough tax. A person making $600K per year will not suffer with $70K extra in taxes as much as thirty-five people making $20K would benefit from paying $2,000 less in taxes. Those tax amount changes would balance each other out. I always say that a rich person making an extra $100,000 may buy a nice luxury item and pocket the rest while ten middle class people each with $10K extra will help the economy more by buying a variety of things. And why should capital gains be taxed less than income? Poorer people can’t afford to invest in stocks in order to get earnings taxed at the lower rate whereas wealthier people do this all the time. This is unjust.
I think the ultimate solution is a flat tax at let’s say 20%, but one with a huge standard deduction, like $25,000 and few deductions except for things like education and medical expenses. Our country is an expensive war and we need infrastructure development and perhaps government programs to fund alternative energy technologies. Since the rich are most able to help, shouldn’t they bear more of the burden? And in the end, everyone wins because fewer people struggle, more are able to feed themselves, own homes, buy things, and support business with commerce. I would theorize that crime goes down too when the lower income brackets can afford to live better too.
My only issue with an anlysis of tax policy is it’s assumtions on the effect to the budget. With Bush’s tax cuts we are pulling in more money to the treasury than ever before, we just happen to be spending even more than that. Thus record deficeits. So of these two proposals, which one slows down activity that gets taxed. It is easy to use a baseline of current activity, but that assumes people don’t change activity based on the money they have to spend, or not spend in either case. Either way, spending is not considered, and behavior cannot be predicted, so one should vote based on their pown status within each realm, because you cannot predict the outcome of either plan or even come close.
I agree and disagree with Bill. I agree that you cannot predict the outcome of either plan.
However, I disagree that Bush’s tax cuts are the reason “we’re pulling more money into the treasury than ever before”. A lot of the increase in $ to the treasury is due to the increase in government spending. Increase in Govt spending will increase Consumpiton and Investment which will in turn increase incomes and tax revenue.
How much of the increase in tax revenue is due to ‘tax cuts’ (increased taxable activity) and how much is due to increased government spending (and deficits) is impossible to determine.
Gridlock, you have it completely backwards. putting money into the government removes it from the economy, where it can be used for investment. lowering taxes puts more money in the hands of the people and therefore the economy. No economy has ever been stimulated by giving the government more money.
UH2L wrote:
“You have to look not at the percentile of people, but the percentile of dollars. If the top 1% of the people make 20% of all income, shouldn’t they pay at least 20% of the taxes? And if the bottom 5% make 1% of the money, they should pay somewhere close to 1% of the taxes.”
WRONG!!!
Wasn’t it Karl Marx that said “From each according to his ability, to each according to his need”? The reasoning above is exactly the type of socialist/marxist thinking that will send this country down the same road as the Soviet Union.
To be fair, if the top one percent of the people made 20% of the income and paid 20% of the taxes, they should realize 20% of the benefits, and we know that’s not gonna happen. To do otherwise is pure, undefiled socialism, an income re-distribution scheme designed to buy votes and keep those with the socialist bent in office.
Nunya,
The fact that you called me “WRONG” shows that you aren’t logical and you are basing your arguments on emotion and personal feelings, (perhaps unfounded outrage?)
The percentage that any bracket gets taxed is arbitrary and the way you outlined it by percentile of the number of people in the top earnings brackets paying that percent of tax is just as arbritrary as me saying that tax should be paid according to percentile of income in a given bracket. What we have today is a skewed system favoring the rich relative to the tax rates we had before these tax cuts were instituted. And if I remember correctly, our economy was in a lot better shape back then. Rich people weren’t suffering either.
My reasoning is sound and it doesn’t make it Communist. It makes the taxation more progressive instead of regressive which would put more burden on the people who can afford it least.
Your philosophies involve income redistribution just as much as Karl Marx’s did, but in the opposite direction where the rich get continually richer and everybody else suffers. That doesn’t make for a healthy economy and it shows given the economic situation we have today.
And you said, “To be fair, if the top one percent of the people made 20% of the income and paid 20% of the taxes, they should realize 20% of the benefits…” I would argue that they see way more than 20% of the benefits because they don’t have to worry about things like how they’re going to feed their families or pay for healthcare. Instead they worry about what kind of yacht or exotic car they want to buy next. Ten lower income people keeping an extra $10,000 in their pocket after taxes helps the economy a whole lot more than one rich person keeping an extra $100,000 in their pocket. they buy more things that they need whereas the rich person might buy one big-ticket item or just deposit the cash. And besides, if poor people can’t pay for healthcare, you end up paying for it indirectly anyway.