McCain, Obama battle on taxes
By Scott Helman, Globe Staff
A day after Senator Barack Obama launched a broad assault on presidential rival John McCain's economic plan, McCain hit back today by asserting that Obama's tax proposals would ensnare millions of ordinary Americans and further weaken the economy.
McCain, speaking to small-business leaders in Washington, said that Obama's plans to restore higher tax rates to upper-bracket taxpayers, increase the capital gains tax rate for the richest families, and possibly raise the cap on Social Security taxes would affect not just the wealthy, but also moderate-income voters and independent businesses.
"Under Senator Obama's tax plan, Americans of every background would see their taxes rise -- seniors, parents, small business owners, and just about everyone who has even a modest investment in the market," McCain said at a small-business summit sponsored by the National Federation of Independent Businesses and eBay.
In a general election that will turn largely on the economy, it's clear this will be one of the major fault lines: Obama and Democrats will advocate, in his words, "restoring fairness to our economy" by shifting more of the tax burden to the rich, while McCain and Republicans will argue that an Obama presidency would also saddle more middle-class families with higher taxes on stock dividends and other earnings.
"Will we go back to the policies of the '60s and '70s that failed, or will we go forward?" McCain asked, seeking again to link Obama with former Democratic president Jimmy Carter, who presided over a period of high inflation, rising gas prices, increasing unemployment, and growing budget and trade deficits.
Obama and the Democratic Party, seeking to capitalize on the public's economic insecurity, note that those are precisely the afflictions of the current economy after nearly eight years under President Bush, and that McCain will merely continue -- or in some cases make worse -- that legacy.
In a wide-ranging interview that aired today on CNBC, Obama also pointed to the growing disparity in incomes between the highest and lowest earners, saying, "We've had an economy that's been out of balance for too long."
"We know that over the last decade or so, that more than half of the economic growth has been captured by the top 1 percent of US citizens," Obama said. "That means the other 99 percent have seen their effective incomes go down. That is not a recipe for long-term economic growth."
While he said in the interview that his specific prescriptions would depend on the economy he inherits, Obama also says he will institute a tax cut for 150 million middle-class workers -- up to $500 per person, or $1,000 per family; eliminate income taxes on seniors making less than $50,000; and provide a new mortgage-interest tax credit for low- and moderate-income homeowners.
McCain said today that keeping taxes low -- even on wealthy individuals and Fortune 500 corporations -- is the key to generating economic growth. He said he would double the tax exemptions for children and give millions of middle-class families a tax cut by phasing out the alternative minimum tax, a decades-old mechanism designed to make sure that affluent families pay at least some income taxes, but now affecting more and more taxpayers. He also vowed to slash the corporate tax rate, and the Republican National Committee noted today that even though Obama has slammed that idea, the Illinois senator's new chief economic adviser, Jason Furman, has advocated it.
The Arizona senator also told the small-business summit that he viewed the estate tax -- paid on inheritances -- as "one of the most unfair tax laws on the books." "After a lifetime building up a business, and paying taxes on every dollar that business earns, that asset should not be subjected to a confiscatory tax," he said.
But McCain has defended the estate tax in the past, arguing against its repeal in 2002 by saying doing so "would provide massive benefits solely to the wealthiest and highest income taxpayers in the country."
McCain's campaign said his position on what critics call the "death tax" has not changed. "He didn't indicate he supported a full repeal in this speech," his campaign said in a statement. Still, McCain's characterization of the estate tax today is a marked departure.
Democrats assailed McCain for asserting in today's speech that Obama would "enact the largest single tax increase since the Second World War" in part by not extending the Bush tax cuts. Factcheck.org, a nonpartisan website run by the Annenberg Public Policy Center of the University of Pennsylvania, found last month that that claim is inaccurate, saying that by the most accurate measure, it would be the fifth largest enacted since 1943.
During the speech, McCain was repeatedly heckled by antiwar protestors, interruptions he tried to overcome with pointed humor.
"One thing people are tired of in America is people yelling at each other. Have you noticed that?"
When the heckler continued, McCain added, "I'm running out of funny lines."
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"Change" is not continuing the failed policies of the past. Sorry, McSame, but your lack of knowledge on the economy is evident. Repeal the Bush tax cuts on those making over $200k per year. Our economy is strong with a strong dollar and a balanced budget. More of the same will not accomplish that. Trickle-down economics DOES NOT work.
We do need to start balancing the budget to keep inflation from strangling the economy.
LM,
You need to understand that the average family household in America (which makes up approx. 1/2 of America) earns between 150K to 250K annually (two professional adults in their career @ 75K-125K each). I don't see how raising the taxes on these families helps America.
Additionally, if Congress would stop spending money that they do not have, then we would be much better off as a nation. Control the spending of the Congress and the entire world would be better off.
More taxes = even more spending = larger unbalanced budget = weak dollar policy = poorer citizens = more reliance on government = slavery
The "hecklers" have a lot more to say than "Keating Five" McCain does.
Why not increase the tax burden for those making over $200K a year? In Obamerica, everyone will have the same amount of money, rely on government for all their needs, and have no incentive to get ahead or work harder, because the government will just take all of that extra/needless cash and distribute it to those who make less and don't work as hard. Yeah, that sounds wonderful!
P.S. For all of you liberals out there, that's sarcasm.
Democrats in action......they want to place a "Profit Tax" on big oil companies and repeal billions in tax advantages. That'll show 'em!!! Those nasty oil companies. Oh, by the way, guess who will pay those profit taxes and loss of tax advantages? That's right, the consumer. What's next? Get those bicycles ready!
WHY would McCain get heckled? Well, because he represents a continuation of the disaster that is George W. BUSH and his Republican do-nothing policies. The policy of doing nothing (except for your rich donors and lobbyist pals) has brought us $4.00+ gasoline, spiraling food prices, two disastrous wars, thousands dead in New Orleans while Bush waited four days to send any help, troops in Iraq without proper armor, substandard care at VA hospitals, and 900,000 homes in foreclosure right now!
I could add to this list for another 500 words. But what would be the point? The majority of Americans know that Bush/McCain-style Republicans are a horrible FAILURE!
As the owner of a small business, I believe that both candidates are bad for business. They both use the smokescreen of taxes to avoid the real issue: spending. They both want to continue spending like drunken sailors and the only choice they are offering is increased taxes now or increased taxes later plus interest. Both choices are bad for business, bad for America, and infuriating to anyone who actually understands economics.
Just cancel the $30 billion in additonal aid Obama promised Israel and use that money to help Americans...The American people are so stupid and cannot see the billions of dollars from the US treasury being stolen from them by Israel..Americans vote for politicians that give away the bank to Israel while Americans citizens suffer...get a clue and vote for canidates that put Americans first.
Democrats in action......they want to place a "Profit Tax" on big oil companies and repeal billions in tax advantages. That'll show 'em!!! Those nasty oil companies. Oh, by the way, guess who will pay those profit taxes and loss of tax advantages? That's right, the consumer. What's next? Get those bicycles ready!
amazing how much Mr. McCain has changed his tune since he's won the primary
Ummm.. I dont think the average American household makes 150 - 200k. Maybe that is what you make but reality is that you are the minority. I am a professional with an advanced degree and I don't make anywhere near 100k and I am the majority. If you are in the Boston area the average is probably around 80 - 100k.
A reduced tax would not allow these necessities to decrease gas, mortgage, food, health care costs, or 60.9 billon trade deficits. But it would increase those necessities for the rich and war profiteers.
Republicans always pitch a complete overhaul of the tax system as a figleaf for their shaky grasp of the economy. A lot of people think they pay too much in taxes. I don't, but I don't like what that money is being spent on. We are spending untold billions in Iraq while our roads go untended, our schools continue to slip, one of every six of my countrymen has no health coverage. Republicans like to point to their own neglect of investment in ourselves as a reason why Americans should be wary of paying more taxes, without of course accepting any of the blame. We need to quit electing people who hate government, who throw money into the giant pit of needless wars and gigantic subsidies for huge corporations, and start electing people who want to use our money for reinvestment in programs which will directly benefit us.
Steven:
When we have major thoroughfares falling into rivers, there is really no defense for the practice of handing over huge subsidies to oil companies which are currently enjoying one of the greatest periods of profitability in the history of their industry.
We Democrats aren't perfect, but our priorities are most certainly more in line with the needs and wishes of the average American taxpayer. And our programs will deliver more concrete results to ordinary people. Republican policies have resulted in economic conditions where people are choosing between gas for their cars and food for their kids.
Andranik, how do you figure that "the average family household in America (which makes up approx. 1/2 of America) earns between 150K to 250K annually"?
According to the Bush administration (http://www.whitehouse.gov/fsbr/income.html) median household income was $46,326 in 2005.
To paraphrase the DNC, you're clearly not the sort who lets the facts get in the way of a good talking point.
Chuck from Cambridge, bravo for pointing out that "it's the spending, stupid."
There really is no such thing as a tax cut or tax increase. All there is is spending, then you decide who pays for it by how you distribute the tax burden. If you "cut" taxes, all you're doing is passing on the tax bill to the next generation, who have to pay it with interest.
So far, I have never voted for a Republican or Democrat. I've alweays voted Libertarian. While I support Ron Paul's idea of replacing income taxes with nothing, I understand that this is not really an option. So, the Fair tax is the ONLY compromise I'm willing to take. Any politician who advocates the Fair tax tells me they respect my rights, they favor small government, and they have no intention of gaining wealth or power from our absured income tax system. Those who don't simply can't be trusted.
Being an Econ teacher I wanted to give my students hard examples of how grateful we should all be to Pres. Bush for his benevolent tax cuts that benefitted EVERY American. Okay, now we all pay homage and get ready to vote for Mr. McCain, because for everyone who makes $20K or less you got back $98. $20,000–36,000 you got back $508; $36,000–59,000 you got back $709; $59,000–97,000 you got back $1,081; $97,000–205,000 you got back $1,225 ; $205,000–518,000 you got back $2,780 and finally $518K you got back a measely $85,002 on every $500K you made. Yes, Obama is dead wrong to repeal the tax cuts on people making over $200K, let's just go after those making $500K, that is where the real money can be found. Oh, by the way, only 10% of the population makes $141K or more. In the future, it would be nice if McCain would bring the real numbers. Finally, this is the Personal Income Tax code, NOT the business tax code ... another beast entirely!
That's the problem. Upper middle class Rethugs think a household average income is $175-250k. Give me a quacking break! The average in this country is something like $50k. Tax hikes for the $200k plus crowd IS NOT A MIDDLE CLASS TAX HIKE. It is a wealthy tax hike, and actually just undoes some of the damage W has done. It's a rollback.
Therefore, the next person who claims higher taxes on "average income families that make $200k + per year" I'm gonna punch in the face. It's a boldfaced LIE designed to scam low income people into voting for tax cuts that don't benefit them and screw our country over. What a f&*(&ing scam you idiots have.
I think that a consumption tax with vouchers or supplementary aid to the poorest among us is the answer to the tax system. It always sounds good to get tough on corporations by raising the tax rate but what happens in a business when the price of doing business goes up is that the price of the good or service goes up. When this happens the consumer pays the extra tax for the corporation and their tax break for being in the "working class" is sucked up at the cash register so to speak rather than being deducted from the paycheck. Either way with our current tax system the working class from 350K on down lose. It is idiotic for the middle class to continue to split and decide that upper middle class people are being greedy compared to the lower middle class. While we are at war with each other the two extremes; poor and wealthy continue to control domestic policy through lobbyist and special interest groups.
LM - how typical of the hate being spewed these days by Democrats. Agree with me or else. I used to think that type of attitude was only to be found on the extreme right, now it is as pervasive on the extreme left. Whereas I would never support a candidate from the far right, neither would I from the far left. I have never before voted for a Republican candidate for ANY office. This year I am supporting McCain because he is closer to the center - read to the majority - of Americans than a far left wing Democrat who actively sought out and patronized a church that preached anti-American and anti-white slogans for 20 years (then dropped it because the primaries were over and he didn't need the black vote to beat Hillary anymore), whose record (what little there is) in the Senate is as liberal as it can get, and who has the audacity of hype to proclaim himself as the best choice to bring people together. He mocks McCain for voting 95% of the time with Bush, when he voted 100% of the time with his party. Base on that math, McCain has crossed partly line infinitely more than Obama. I can understand people being desperate for change, but to bet it all on a person with such limited experience is reckless beyond belief. Obama once said that everyone sees different things in him - perhaps its because he is constantly changing his story.
Historically socialist nations have produced economies that sputter and do not work. Today, our nation is at the pinnacle of a difficult transition, where we must adjust and get used to the expansion of world economies, which has spurred on the crowding out of resources. However, Obama's solution of raising taxes, and governmental social engineering is not the answer. The greater the role of government, the greater the tax burden. Recent history explains this rather well. Look to why much of the rest of the world is expanding. China, India, and many Asian nations are embracing capitalism and moving away from socialism, hence providing incentive to work hard and become more affluent. Tax cuts along with a stronger dollar will spur incentive and competition which will give America a chance to compete. Wake up America there is no free lunch. Obama and those who think like him will drag us down the path of further disaster.
FIrst of all: To all you Economics-ignorants, DEFICITS SPUR ECONOMIC GROWTH!!! Take a simple economics course at your local community college for crying out loud.
And keep in mind: the TOP TWO PERCENT of income earners in this country drive 99% [READ: NINETY-NINE PERCENT] of the economy. Think of it this way....Mr.FatCat Richy-Pants goes out to shop on a whim and purchases his wife a $250,000 diamond necklace. That was just ONE shopping day. Think of the total he spends for the other 364 days left in the year....beginning to see the picture? Notice the half-million dollar car he drives and replaces every 6 months?
NOW: For all of us Middle class and upper-Middle class income earners consider how much WE spend (per household) each year....got a number figured up yet?
EXACTLY!!! IT'S A MINUTE FRACTION of the $250K that Mr.FatCat Richy-Pants spent on whim to bejewel his wife.
THINK AMERICANS! I thought we were smarter than this but apparently not! HAIL the Founding Fathers for their foresight to create the Electoral System, thus keeping true decision making AWAY from the uneducated!
TheNightFly's comment EVERYONE should read #19! It can't be better said than what he/she posted. I am baffled by the fact that the Libertarian party has struggled for over 30 years when their platform plainly advocates every idea that our country was created for. Hence, the name: Libertarian.
Republicans excommunicate their "fellow" party-member Ron Paul and label him an "extremist". Funny to hear such verbal diarrhea from far-right wing zealots.
Democrats demonize Congressman Paul as well, but then: who DON'T they demonize? It's sad that Americans actually listen to, believe in, and follow their verbal diarrhea.
Why is no one talking about how BADLY the McCain's speak? He was just slightly better than her, and she was a tragedy. Have you ever seen someone look or sound more phony?! It's baffling to me how transparent it's all become. Mind you, they didn't even have to write their speeches...just read them from teleprompters. I wasn't a fan of Joe Biden or Nancy Pelosi's speeches, but both Barack and Michelle Obama spoke the words THEY WROTE very well. Raisin McCain and Peggy Hill palin comparison to the Democratic ticket.