Taxes, Taxes, Taxes

The McCain-Palin mantra -- besides "drill, baby, drill" -- is to call for no more taxes or lower taxes.

When you see either of them decry the Obama "tax plan," you see the crowd boo and hiss at what Obama might do. Even Joe the Plumber has spoken out against taxes. He also is against Social Security, which he apparently thinks is socialist plan as well.

My question is this: if you stacked up each tax plan against each other, how would those booing and hissing fare under each tax plan? From all estimates, if you make under $250,000 in net income you will get a bigger tax break under Obama than McCain. Do a majority of McCain-Palin supporters make over $250,000? In their rhetoric they rail against elites and urbanites and claim to represent the rural hardworking real Americans. Do these folk make more than $250,000 a year? If not, why buy the McCain-Palin rhetoric?

Do they hope that they'll benefit better under a continuation of "trickle down" economics that has guided the nation these past several decades? Interestingly, the one break in the Republican ownership of the White House led to budget surpluses.

So, call me confused!!!


Anonymous said…
On Tuesday, October 28, 2008, the Detroit Free Press had a chart showing the effect of the candidates' tax plans on typical people above and below the $250,000.

The article establishes that most people who make less than $200,000 will see a greater reduction in the taxes under Obama than under McCain, and those who make more than $250,000 will pay 2-3% more in taxes under Obama than under McCain.

I am willing to bet that most McCain supporters make less than $200,000 and yet in effect they argue that those who make more than $250,000 should pay less in taxes while they pay more?!?

It's a funny world.

There are some good reasons to vote for McCain and against Obama (i.e., the experience differential). However, the potential change in the tax burden is not one of them.

It's stunning, isn't it? Politicians can say the exact opposite of what is true and their hardcore followers will bleat right along. Every independent analysis that I have seen - every single one of them - makes it clear that Obama's tax plan gives a greater relief to Americans making less than 250,000 a year. McCain's gives the greatest relief to the very wealthy.

I'm baffled too.
Anonymous said…
The fear for me is really Congress.. not Obama. I fear Obama will be steam rolled by Congress and the end result could be quite scary. Rumblings of a New Deal II.. YIKES.

The only good news is the government is broke thanks to the $700M to the banks. They won't be able to do anything. The investor class like me.. have so many capital losses, I won't be paying capital gains for decades.

When has trickled up economics worked by the way?
Anonymous said…
I wish I could delete a post..oh well. Sorry for double posting.

As the "right winger" on here and a arm chair economist.. figure I would give insight into why I have my position if anyone cares.

The first question I have is how do you determine the magical $250K? I work with rich people every day and none that have a biz make that much in salary. Its earned in an LLC and then distributed to the owner in tax free dividends. (tax paid at the LLC) Doctors, lawyers, and execs would most likely earn $250K, but my guess is most will look for alternative pay plans and I guarantee CPAs across the country are making plans to divert income in other forms of benefit.

While I hear the complaints about trickle down, the flip argument I have to ask is when does trickle up work? I have been unemployed and even with a college degree, you can't help but be a little addicted to those checks in the mail every Wednesday. Sort of like having that rich grandma who strokes big checks at Christmas.

Think about it this way.. the top bracket has been over 50%! Imagine working until June 30th just to pay back the government! There is a huge disincentive to work, and I think thats whats being missed.

But I agree with John, this is definitely NOT why I am voting for McCain. My worry is over Obama being rolled over by congress. Pelosi and Reid are drooling at the projects they can push through and as a tax payer.. THAT scares the fool out of me. A New Deal II? The only good news is the country is broke after the $700B bailout, so hopefully they will see that there is no way to "pay as you go" on any new projects. Investors like me won't be paying capital gains for decades.. the main reason for Clinton surpluses was the cap gains thanks to the tech boom. That income dissolved with the bubble popping.

I've enjoyed your responses. The one thing you have to factor in here is the election of Blue Dog Democrats. In order to build their majority the Democrats have reached out to more conservative Democrats -- like Jim Webb and John Tester.

My sense is that while the Dems have pent up projects, there are self-limiting factors present as well.

People may fear a New Deal II, but remember that many of our roads and bridges and libraries, etc. are products of the New Deal, along with FDIC, Social Security, etc. Even if you're a conservative Republican -- which my Mother is and I was raised to be (well I was raised to be a Nixon/Ford Republican) -- you have to like some of these programs.

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