Obama's Tax Evasion

[audtatious]

http://online.wsj.com/article/...looks

The parsons of the press corps are furious with Charlie Gibson and George Stephanopoulos of ABC News, which means the pair must have done a pretty good job moderating Wednesday's Democratic debate in Philadelphia. Barack Obama had an off-night, so his media choir wants to shoot the questioners.

We thought the debate was one of the best yet, precisely because it probed the evasive rhetoric we've heard from both Democratic candidates throughout the campaign. Nowhere was this more apparent than during the exchanges between Mr. Gibson and Mr. Obama over taxes. Time and again, the rookie Senator has said he would not raise taxes on middle-class earners, whom he describes as people with annual income lower than between $200,000 and $250,000. On Wednesday night, he repeated the vow. "I not only have pledged not to raise their taxes," said the Senator, "I've been the first candidate in this race to specifically say I would cut their taxes."

But Mr. Obama has also said he's open to raising – indeed, nearly doubling to 28% – the current top capital gains tax rate of 15%, which would in fact be a tax hike on some 100 million Americans who own stock, including millions of people who fit Mr. Obama's definition of middle class.

Mr. Gibson dared to point out this inconsistency, which regularly goes unmentioned in Mr. Obama's fawning press coverage. But Mr. Gibson also probed a little deeper, asking the candidate why he wants to increase the capital gains tax when history shows that a higher rate brings in less revenue.

"Bill Clinton in 1997 signed legislation that dropped the capital gains tax to 20%," said Mr. Gibson. "And George Bush has taken it down to 15%. And in each instance, when the rate dropped, revenues from the tax increased. The government took in more money. And in the 1980s, when the tax was increased to 28%, the revenues went down. So why raise it at all, especially given the fact that 100 million people in this country own stock and would be affected?"

Mr. Obama answered by citing rich hedge fund managers. Raising the capital gains tax is necessary, he said, "to make sure . . . that our tax system is fair and that we are able to finance health care for Americans who currently don't have it and that we're able to invest in our infrastructure and invest in our schools. And you can't do that for free."

But Mr. Gibson had noted that higher rates yield less revenue. So the news anchor tried again: "But history shows that when you drop the capital gains tax, the revenues go up?" Mr. Obama responded that this "might happen or it might not. It depends on what's happening on Wall Street and how business is going." And then he went on a riff about John McCain and the housing market. This is instructive. The facts about capital gains rates and revenues are well known to our readers, but we'll repeat them as a public service to the Obama campaign. As the nearby chart shows, when the tax rate has risen over the past half century, capital gains realizations have fallen and along with them tax revenue. The most recent such episode was in the early 1990s, when Mr. Obama was old enough to be paying attention. That's one reason Jack Kennedy proposed cutting the capital gains rate. And it's one reason Bill Clinton went along with a rate cut to 20% from 28% in 1997.



Either the young Illinois Senator is ignorant of this revenue data, or he doesn't really care because he's a true income redistributionist who prefers high tax rates as a matter of ideological dogma regardless of the revenue consequences. Neither one is a recommendation for President.

For her part, Hillary Clinton said that she, too, was open to hiking the capital gains tax rate, just not by as much as her rival. "I wouldn't raise it above the 20% if I raised it at all," she said. Of course, she too promised during Wednesday's debate not to raise "a single tax on middle-class Americans, people making less than $250,000 a year."

Both candidates would have voters believe that taxes on investment income only affect the rich. But that's not what Internal Revenue Service returns show. The reality is that the Clinton and Obama rate increases would hit millions of Americans who make well under $200,000. In 2005, 47% of all tax returns reporting capital gains were from households with incomes below $50,000, and 79% came from households with incomes below $100,000.

* * *

By the way, a higher capital gains tax rate isn't the only middle-class tax increase that Mr. Obama is proposing. He also wants to lift the cap on wages subject to the payroll tax. That cap was $97,500 in 2007 and is $102,000 this year. "Those are a heck of a lot of people between $97,000 and $200[,000] and $250,000," said Mr. Gibson. "If you raise the payroll taxes, that's going to raise taxes on them." Ignoring the no-tax pledge he had made five minutes earlier, Mr. Obama explained that such a tax increase was nevertheless necessary.

In other words he dodged the question, as he so often does with impunity. But thanks to Mr. Gibson's persistence, for 90 minutes Wednesday night Mr. Obama didn't get away with it. The voters learned a lot about Mr. Obama, who needs to learn a lot more about taxes and revenue.

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Why is it that Obama and others feel that all solutions require raising taxes and that anyone who makes money must be penalized for their hard work in order for it to be "fair to the poor"?

[AZhitman]

My knee-jerk response is, "It's supposed to suck to be poor."

Otherwise, where's the motivation to "get up and get out"?

However, the true "middle-class" in America isn't making $200-250K. They're sitting at $75-$150K, at least in my estimation.

Perhaps Mr. Obama could use some collegiate-level Econ courses, and I for one am glad to see someone taking him to task for the dodging, ducking and weaving.

The shine is off, folks. He's not the savior.

[datsun2401972]

However, the true "middle-class" in America isn't making $200-250K. They're sitting at $75-$150K, at least in my estimation.

Wow, I don't feel middle class anymore

I need to get up and do more than work 60 hours a week.

[audtatious]

Well, "rich" is any individual making over $75k/yr or families making over $125k/yr. The "stimulus" check sets that level from a Govt standpoint now.

The line has been drawn

[Encryptshun]

I apologize in advance for the length of this post -- please bear with me.

This tax issue is of deep concern to me. I got married (to my now ex-wife) on July 29, 2000. When I filed my first joint tax return (the last year of Clinton tax laws), I had to take a second note out on my car to scrape together the $3700 I owed the IRS. By getting hitched, our individual witholdings weren't enough, we got hit with the marriage penalty (we used the standard deduction because we didn't own property), and our combined income pushed me over the cap for being able to write off interest on my student loans. Married for 6 months, making a combined income of about $52,000 (having to pay Chicago cost of living, too) and dangerously close to being out on the streets (thankfully I'm a great negotiator and was $3700 right side up on my 1998 Altima) because of fvcking TAXES. That's when I decided, right then and there, that no matter WHAT, I was going to be a proponent of fiscal conservatism.

Anyway, the first thing that President Bush did was to reform the tax code, and when I filed my 2001 returns instead of being $3700 short I was $900 long with no change in base household income. That was a helluva lot of money to us.

My point is that I haven't served in the military, I haven't been a "victim" of our healthcare system, I've never been under the impression that I'd get any of my Social Security tax back, but I HAVE known deeply and intimately what it feels like to be absolutely terrified of my own government and the position that government has put me in. One thing that Obama needs to understand is that you can "give" all the "civil liberties" you want in the form of public programs to the populace, but the majority of Americans will feel their rights violated more scathingly if you attack their wallets than if you scorn their social system.

*EDIT* On April 26, I will be asking my girlfriend of 2 years and the most wonderful woman I've ever known to be my wife. Assuming she says yes, I would hate to think that we'd again live in a country where "getting married" is penalized by our government.
Modified by Encryptshun at 10:51 AM 4/18/2008

[audtatious]

I feel ya....Tho they now use tax refunds for "welfare" in a way as well. My daughter does not work but her husband does. He does not make much and is trying to finish school. They received over $4000 back from federal taxes this year which is far more than they paid into it. I, on the other hand, paid a crap-ton of taxes. I was planning on using the step-daughter as a deduction until I realized I made too much and she is nullified. Thus, I had to fork over another couple grand to Uncle Sam.

The wife and I both have paid off cars (both are 6yo) and we have no credit card debt. The only debt we have is the house. Since I have income left over for investments I guess the Gov't should consider me filthy-rich and find ways to take it and give it to others.

[rn79870]

*EDIT* On April 26, I will be asking my girlfriend of 2 years and the most wonderful woman I've ever known to be my wife. Assuming she says yes, I would hate to think that we'd again live in a country where "getting married" is penalized by our government.

I've got my fingers crossed for you. I hope it works out just the way you want it to. A week and a day left.

[Encryptshun]

I've got my fingers crossed for you. I hope it works out just the way you want it to. A week and a day left.

Thanks. I'm 99.99999% sure she will say yes, but I'm only about 48% sure that our first joint tax return will be at all pretty.

[audtatious]

Married filing seperate

[Encryptshun]

Married filing seperate

Problem is, there are deductions that you can take if married filing jointly but not if married filing separately. For example, deducting your student loan interest. The interesting catch 22 is that if you're filing jointly you can make over the income cap for the deduction. If you file separately you can't deduct it at all. The former was partially recinded by Dubya as part of his reforms -- it ceased to be a flat income cap and became a sliding scale.

I'll need an accountant for the first time in my life.

[audtatious]

Everything that Dubya put in will be going away in 2010 it seems and then there will be additional increases if either of the Dems get into office.

[WDRacing]

I'm certainly not for raising the working man's taxes, but we can't have our pie and eat it to. The US has many area's that need attention that require more funding then we're currently throwing at them.

An increase in any region of the tax scale is going to piss people off. So where do we aquire the money from? Assuming we need to use income tax alone, not simply transferring budget cuts from one area to another, how do we go about restructuring the tax scale and rates in order to get more funding available for things ranging from Education to Health Care?

WD

[audtatious]

<sigh>

It's you....

Throwing money at education has not solved anything yet. Some of the worse schools are getting far more per student than the average and they seem to keep getting worse.

What do you propose from a education or healthcare perspective?

[WDRacing]

Well, for education since you stated that giving the schools better funding hasn't helped, how about funding and investigation board that evaluates the infrastructure of each school and its curriculum. Find out where the finances are going if not for the benefit of the children being taught. That idea could go 100 different ways with options far to many to list, but it would be a start in what I think is the right direction. If they receive state or gov funding we should have full access to all of their records and pay charts etc. Bare in mind I put that thought together just now, with stream lining and actual smaht people doing the planning I think it would work.

Health care is a huge topic to cover with so many various levels it's hard to nail down what parts are actually the worst off. For one, my stand is that Illegals can never receive Health Care. Sorry, but I'm done paying for everyone else, especially those that not only don't contribute, but will NEVER contribute. By never I mean as long as they are illegal they will never pay into the Income Tax fund that we do.

Then, organize the same type of investigation team that you did with the education system and go through and see where all the leaks are in the current health system. I imagine we'd recover quite a bit if hospitals that receive state or gov funding had to report their spending to a team of people that aren't sitting in a position to make profit when the hospitals do.

Investigation to current systems by people who aren't in a position to make profit would yield a metric ton of misappropriations. To include making the cockmongers on the hill account for ear mark spending.

Thoughts?

WD

[Encryptshun]

You didn't ask, but I'm gonna chime in anyway:

Education --

http://www.ed.gov/about/overview/fed/role.html

"Education is primarily a State and local responsibility in the United States. It is States and communities, as well as public and private organizations of all kinds, that establish schools and colleges, develop curricula, and determine requirements for enrollment and graduation. The structure of education finance in America reflects this predominant State and local role. Of an estimated $1 trillion being spent nationwide on education at all levels for school year 2007-2008, a substantial majority will come from State, local, and private sources. This is especially true at the elementary and secondary level, where just over 91 percent of the funds will come from non-Federal sources.

That means the Federal contribution to elementary and secondary education is a little under 9 percent, which includes funds not only from the Department of Education (ED) but also from other Federal agencies, such as the Department of Health and Human Services' Head Start program and the Department of Agriculture's School Lunch program. Even when support for postsecondary education is added in, ED's contribution, including loans and other aid made available as a result of ED's student financial aid programs, is only about 12 percent of the total spending for all levels of education. ED's $68.6 billion appropriation, by the way, is less than 2.3 percent of the Federal Government's $3 trillion budget in fiscal year 2008.

Although 12 percent may not sound like much, ED works hard to get a big bang for its taxpayer-provided bucks by targeting its funds where they can do the most good. This targeting reflects the historical development of the Federal role in education as a kind of "emergency response system," a means of filling gaps in State and local support for education when critical national needs arise."

Education is the responsibility of the state, not the federal government. Federal dollars are only about $27 billion. Not even close to what it would take to put a dent in a national healthcare program. ($2.7 TRILLION in 2007)

Healthcare --

Healthcare doesn't work like any "standard" supply chain. If we want a national healthcare system, we need to weed the fat out of the value stream and increase its operating efficiency. That means putting laws in place to eliminate frivilous lawsuits and punish compulsive litigators. That means limiting insurance markups and putting caps on damages for malpractice and liability settlements. Do you really want the government to tell you that because your doctor was supposed to remove your tonsils but instead amutated your left leg at the thigh, that you are only able to receive $20,000 in compensation because the calculation is now based on poundage?

Healthcare in this country is so high for 3 reasons:

1) paying out damages for litigation2) paying for R&D for drugs so they will conform to FDA standards3) amoritizing the cost of uninsured and/or non-paying healthcare recipients

You need to eliminate all those issues before a national healthcare system would be affordable enough to be run by the government.

[WDRacing]

The FDA and all the Drug companies work hand in hand. One profiting from the other. No sense even arguing that. So I agree 100% that the drug companies are gouging us. The cost of post treatment medication is a gigantic reason people can't afford health care at all.

I think we can agree that there is a substantial problem with the way things are currently operated. With investigation and reform of the current systems they could work far more efficiently with the funding they already recieve. Therefore getting rid of any need to increase taxes at all. Let alone only increasing taxes to certain brackets.

The education problem we have doesn't fall on the system alone, I believe that improper parenting plays a huge role. But that's way off topic...

WD

[Encryptshun]

The education problem we have doesn't fall on the system alone, I believe that improper parenting plays a huge role. But that's way off topic...

WD

I disagree. I think that's exactly on topic if the topic is tax reform.

Stupidity is expensive to taxpayers.

[audtatious]

The FDA and all the Drug companies work hand in hand. One profiting from the other. No sense even arguing that. So I agree 100% that the drug companies are gouging us. The cost of post treatment medication is a gigantic reason people can't afford health care at all.

Per this thread: zerothread/329824

"The real price of prescription drugs is actually decreasing. In 2007, inflation rose more than 4 percent, while drug prices increased just 1 percent. So in real terms, drugs were 3 percent cheaper last year than in 2006, on average.

What's more, drug spending is but a small slice of total health-care spending — less than 11 cents out of every health-care dollar goes to prescription meds.

And drugs actually reduce health-care costs in the long-term. Medicare, for instance, saves $2.06 for every additional dollar it spends on pharmaceutical drugs, according to a paper recently published by the National Bureau for Economic Research. Prescription drugs often obviate the need for expensive surgeries and hospital stays."

[WDRacing]

Disproving my theory without offering your own idea means you have a far smaller pen15 then I do

[audtatious]

Only because you have a small butt hole

[rn79870]

whoops. Pics?

/end obamajack/

[audtatious]

You really want pix?

You libby

[WDRacing]

More to the point, which pictures?

[audtatious]

Probably your penor

[rn79870]

Why car pics of course. Whatever did you think?

[datsun2401972]

Improper parenting could be a part of virtually any topic these days.

[audtatious]

Back when I was a kid we had parents who would bust our azz and we had a school system that would let the coach, Principal or Vice Principal to use a paddle on us. We knew who the authorities were. Today, a large number of kids do not respect their parents nor adults in general. In the schools, means of discipline have been taken out other than suspension or staying after school.

Hillary said, "it takes a village", yet the village approach is failing and they are pointing back at the parents (who relatively have no clue after generations of this BS). My motto is: "It takes a village to teach children they have all the rights but it only takes one parent to stand up and bust Jr.'s lil azz to straighten him out". Of course, at that point the village FCS steps in for abuse

[WDRacing]

Exactly my friend. I'm having serious issues with my 13 year old boy that resides with his mother. She has zero control over him and when confronted about it simply says she's doing all she can...or the best she can. Even the Teachers have picked up on the fact that she doesn't do ****.

Really pisses me off cause she calls me and asks me what to do...but doesn't listen to anything I have to offer.

[Encryptshun]

^ & ^^

I submit to the court as People's Exhibit A:

Nanny 911

Apparently, it doesn't take a village to rear a child, it takes a Nielsen family.

[audtatious]

Dr Wii is a good babysitter I hear