Thanks for the very interesting and thoughtful comments MataHarley – you must be from…. Oregon?! I also caught that Charlie Rose and it was a very interesting group. If McCain had picked Meg Whitman I might have supported him as that ticket would have given me a level of economic confidence I don’t have with Obama or McCain and would have shown he was in this for the economy. I’m not convinced that is true at all – he’s not the same John McCain as he was in 2000, when he should have been … GW.

I wish I had more time to respond but in a nutshell:

Yes, very worried about economy and you make an excellent point that the “smartest biz guys in the room” have been in charge for years yet we have a potential catastrophe looming. I won’t even pretend to say I understand all the factors involved even though I used to think I was pretty savvy in economics and business. I do give Warren Buffett a lot of credit for being..right … and super rich…. and his endorsement of Obama meant a lot to me.

No, not worried about Obama or Biden. As a very strong believer in entrepreneurial capitalism who has had a LOT of arguments over the years with socialist folks, I can assure you Obama is no socialist by any reasonable definition of that term. As I pointed out above you can make a mild case that anybody who wants any taxes for any reason is a socialist, and more so for progressive taxation, but that is misleading in the same way we’ve come to associate the term “conservative” with things like big military and pro life. Labels are no longer of much use except as marketing devices. There are a fair number of people like me who are fiscally more conservative than McCain and would slash Govt budgets because Govt usually wastes our taxes, but support an Obama-style global vision. In this election and for me personally a Global perspective trumps the specifics of the economic plans. I would prefer to see Obama with more of McCain’s tax cutting sensibilities if McCain had not “rich loaded” his plan so much but as written I don’t understand how either plan will help the country much. Both seem to ignore the deficit in favor of giving away money.

I don’t like labels at all, and I’d encourage you to actually read Obama rather than read those who hate and despise him. You can’t go to Daily KOS or watch Olbermann and understand what McCain thinks and you can’t read critiques of Ayers or Corsi and hope to get any understanding about Obama. I really want to be emphatic on the point that the character attacks are very questionable. I’ve spent many hours tracking down a lot of stuff friends who hate Obama sent to me and I only became more convinced that Obama is very much what he says he is. I did find a lot of almost numbingly misleading stuff from people like Corsi, Martin, and Berg, who now has a press release stating Obama “admits he was born in Kenya”. This is garbage designed to mislead the very gullible.

If I’m not back for awhile don’t take it personally … nice to meet you!

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Joe, I am concerned about both Obama and McCain’s economic plans. Truth be told, neither one hits me as correct. But Obama’s resonates as far more dangerous a tact, with significantly more dependence upon the government for implementation… and for doing little to create wealth. His plans seem to rely upon existing wealth (which will be decreasing), and leveling out the population’s income for a liveable wage quest.

I’m quite disappointed you don’t see the “spread the wealth” talking point. Obama has, to me, been the overt socialist since day one. Hang, the guy makes Hillary look downright conservative. If you don’t see it in his educational plan (founded on the social and economic justice theology of Rosa Luxemberg and Bill Ayers), or in his tax plans, then I’m surprised you don’t see it in his life compadres of affirmative action socialists.

Even if you refuse to recognize his alliances with those of socialist designs, just how do you ignore his New Party/DSA alliances? His work with ACORN in not only instigating lawsuits against banks for “redlining”, but also for defending ACORN in the voter registration fraudulent practices? What you don’t know about Obama because he refuses to supply historic records, you can see quite plainly in his associates and associations. And you can most certainly apply those beliefs of his associates to his policy talking points.

You strike me as a thinking man, savvy to business. Yet you also seem willing to give the benefit of the doubt, and wear blinders to what is… if not a smoking gun… a still warm one when it comes to what we *do* know of his visions for a improved US.

I’m with you on the “strong, independent party run by fiscally sharp folks with business backgrounds and global sensibilities”. Then again, where did Bernanke, Paulson, Raines, and others come from that helped create this perfect storm of a mess that led to this economic debacle?

I watched a truly fascinating panel on Charlie Rose last night. It had Meg Whitman (eBay) as well as other global economic specialists. Many were conservative, many were pushing the “green” bit as the solution. (ie John Doerr) And altho I agree incorporating “green” energy solutions plays a large part of our economic future, I also have to say that such a future is expensive for the consumer. And again, this “feel good cure” will benefit the top tier, and not the end user. Al Gore is just beside himself that his personal ventures may suffer for the overall economy… and is in overtime mode.

Truth be told, the man I was most impressed with was India’s Anand G. Mahindra… Vice Chairman and Managing Director of Mahindra Group, graduated from Harvard College, Cambridge, Massachusetts, Magna cum Laude (High Honours). He said something that stayed with me… that for India, and much apart from the rest of the region, their heads were with John McCain, but their hearts were with Obama. His reasoning was functional/economic vs philosophical/perception. India greatly benefited from Dubya, the younger. They are quite happy with the Bush economic policies in India.

Obama, he said, offered the US an opportunity to show the world that even in the wake of 911, we could take such a bold move to show the world we had put prejudice and preconceived notions behind us and elect such a controversial figure. It had absolutely nothing to do with Obama and his policies, mind you. Just the “presentation” of Obama.

Point is, the visual of Obama is historic. The soaring rhetoric warms the cockles. Problem is the words and deeds do not match. And the proposals and policies are a severe abandon from the US capitalist structure. Even Mahindra said that if an Obama presidency led to a reversal of the Bush economic approach, it would be a presentation that would be a massive failure economically… and politically.

I am not willing to trade a feel good presentation to the global community for the “head” policies of an ol’ white guy who will actually be less damaging. And notice… I do say less damaging. At this point int his election, I am on “damage control” status.

INRE your deficit comment. I’d like to say that the deficit is a big thing with me as well. And you may think McCain is worse in the short term, but I don’t. Because I genuinely believe McCain will “freeze” spending.. which needs to be done while the spending is closely scrutinized and purged of waste. Congress also needs to learn to live on a budget, and be confined to what the feds are there for.

By contrast, Obama has yet to find a program he doesn’t find integral. He’s proposed halting, capping or slowing *nothing* in his spending. The man is very good at spending other people’s money, as we’ve seen in CAC and his own campaign. And all with mediocre results. Considering his 4:1 donations, the man should not be in a tight race for this election. McCain’s not far behind on a 1/3 of the cash.

With Obama, I believe his deficits for his side programs of energy and education (among others) will drive the dollar value down… thereby the price of oil up. He has no plans to truly replace oil. And his problem is he doesn’t recognize that the US commodities exports are founded in petroleum based products. It ain’t just fuel and heating oil. It’s production.

This country will never be independent of oil unless we want to produce nothing but a smile and tourists as an export.

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Missy for most taxpayers both McCain and Obama’s plans will result in tax decreases and both plans will push our national deficit much higher. In typical fashion neither party is addressing the elephant in the room – our 10 trillion national debt and approx 500 billion national deficits.

Where McCain’s plan give a decrease to everybody it focuses mostly on very high income for the bigger tax cuts. Obama will cream folks who make millions and increase taxes on most who make over 250k (that is taxable income, NOT total revenues).

Most families will see a higher tax break under Obama’s plan,though in my opinion it is not enough of a difference to base your vote on. As MataHarley notes in her excellent post above you also would look at how these plans / leadership / ideology will affect the overall US economy during the coming recession.

MataHarley I need to review your post again, but I think I agree with much of what you have written, esp. the idea that neither plan is solving our key fiscal challenges which are national debt and national deficit. To do that we’ll need cuts more massive than either party would ever support (simply put a balanced budget after massive entitlement and military cuts because those items are the huge items in the national budget. Cutting pork is great but trivial compared to the big items).

Am I right that McCain’s plan will add more to the deficit in the short term? His total tax cut is greater but weighted almost entirely to the high bracket folks, which is the reason I started to research the Joe the Plumber stuff – it didn’t smell right to me to say regular folks would be better off under McCain’s plan in the short term – even successful small businesses. I think you believe that McCain’s plans will bring the economy back faster. I see that as a different issue and too complex to know because the Govt bailout issues are so massive.

I don’t get the “sharing the wealth” talking point. McCain and Obama plans both redistribute wealth using progressive taxation (ie wealthier pay higher percent and MUCH higher taxes), so both are basically “socialist” by that definition. You could say McCain is ‘less of a socialist” than Obama, but you can’t call one a socialist and the other not – that’s nonsensical since both say they want to keep progressive taxation

This is why I want a strong, independent party run by fiscally sharp folks with business backgrounds and global sensibilities.

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Last one (I think) in the “other, not mentioned” tax repercussions under a President Obama. Social Security taxes… from the USNews biz division back in June

Barack Obama just found an extra $600 billion or so (over 10 years). He said today in Columbus, Ohio, that he wants to lift the income cap on Social Security taxes for folks making $250,000 a year or more.

~~~

Social Security guru Andrew Biggs over at the American Enterprise Institute has a run on a computer model a plan similar to Obama’s. (Biggs extended the “donut hole” only to earners making up to $200,000.) Here is what he found (bold is mine):

Given the scale of the tax rate increases—a 12.4 percentage point increase in tax rates for the highest earners—it is striking how little Obama’s plan would accomplish. The GEMINI model estimates that Obama’s plan eliminates only around 43 percent of Social Security’s 75-year shortfall. Even after the plan’s implementation, Social Security would face a 75-year shortfall of around 1.12 percent of payroll. . . .

[The] Obama plan’s modest improvements to Social Security’s financing come at a steep cost: top marginal federal tax rates inclusive of federal income, Social Security, and Medicare taxes would increase from 37.9 percent to 50.3 percent… . Put another way, the Obama proposal is equivalent to repealing the Bush administration’s reductions in top income tax rates from 39.6 percent to 35 percent almost three times over.

Also in the article, the top 10 states affected by Obama’s income cap proposal…

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Forgot to mention, Joe… INRE your comment:

Mataharley you are certainly correct that there are several ways to skin the small biz cat, but I don’t think subs are going to change the story much for Joe the Plumber because I understand there are only two plumbers working at that biz.

The whole idea of any “Joe” is to take a business and grow it. And without going into specifics on that “Joe”, the size of his town and the potential for his plumbing business to expand with additional contracts and employees, we come into the major flaw of Obama’s “spread the wealth” tax plan.

And that is few will have ambition to get large enough to pass that tax threshhold. In other words, you have now quashed the drive for excellence. Why get so big you end up paying thru the nose? Much easier to stay moderate, stay mediocre.

Hang… under a President Obama, I’m looking forward to semi-retiring for my annual income, reducing my income tax threshhold, not paying anything, and just collecting a tax credit refund check annually on everyone else’s nickel. Why work my butt off if I can live with less and get paid for doing nothing but exising in Obama’nation?

See the problem? The drive for becoming one of America’s wealthy will go down the tubes. The wealthy will become less wealthy to support low and middle income classes. The low and middle income classes will be content with homogenous mediocrity. And class warfare in American will have succeeded… until, of course, the money to support the nation runs out… just as it’s done in other socialized countries.

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Hey Joe

The problem with the WaPo simple graphs is it doesn’t take into account Obama’s refund credits. I suggest you check out this article from CNS, encapsulating the Obama tax plan – in conjunction with these refunds. This is why McCain is out there saying Obama’s plan will end up cutting checks to those who pay no taxes. This info was derived from an analysis by the Tax Policy Center. (I’m still trying to find the original study by the TPC… I’m a “source” kinda girl…)

The heart of Obama’s tax cut proposal is in his use of refundable tax credits, which the Center describes as “credits available to eligible households even if they have no income tax liability” — in short, refunds available even to those who don’t pay taxes. These refunds are claimed on tax returns and are paid to all taxpayers who qualify for them, regardless of whether they owe taxes or not. These refunds have the ability of reducing a taxpayer’s liability below zero, meaning they can get a refund without actually paying taxes.

In real numbers, 60.7 million people who have no tax burden at all will receive refunds from Obama, while only 33.8 million people, who pay approximately 40 percent of income taxes, will get any kind of refund. Twenty percent of taxpayers, who pay 87.5 percent of total income taxes, will actually see after-tax income decline under Obama by nearly two percent, according to the Center.

By using these refunds, Obama is able to claim that he is giving a tax cut to 95 percent of households, although only 62 percent of households pay any income taxes at all. This means that Obama’s tax plan calls for giving money to some households that do not pay taxes, including a plan to make community college “essentially free” and pay 10 percent of the interest on all mortgages.

Now, that said, this is only talking Obama’s income tax plans. Shall we discuss his suggested increase in corporate taxes and it’s effect?

An important note about seniors: Some seniors will be affected indirectly by Obama’s plan to raise corporate taxes. Corporate taxes are expected to depress profits from stocks and dividends, which seniors tend to rely on for retirement income. An analysis from the Tax Policy Center concluded that about a third of seniors would see higher taxes, either because they have high incomes or because of slight increases due to the indirect effect of the corporate tax rate. Overall, seniors would see their federal tax rate go up about 2.5 percent, and that includes steep increases to the top brackets.

How about the individual’s payroll taxes?

The payroll tax claim is a little different. Obama proposes a $1,000 tax credit on income for working families ($500 for singles), to offset payroll taxes. So for most people, Obama is actually lowering payroll taxes.

But he has said he would raise payroll taxes on people making higher incomes of about $250,000 in order to keep Social Security solvent. Currently, only the first $97,500 of a person’s income is taxable. So for higher incomes, Obama would raise payroll taxes.

Also see Newsbusters take on the payroll taxes here.

It turns out that even the claim that “only” 3% are “affected” may also be a bogus.

I estimate, based on reviewing 2005 IRS data (Table 1.4, downloadable at this link) and 2006 Census Bureau information (Table AVG1, downloadable at this link), that the percentage of those “affected” (i.e., socked with a ginormous tax increase) is more correctly seen as about 2%.

There appear to be just about 3.0 million taxpayers who would be have to pay additional payroll taxes under Obama’s proposal (some interpolation and inflation estimating was necessary to come up with this number). That 3 million would be:
- 3.3% of all taxable tax returns (90.6 million).
- 2.2% of all tax returns filed (134.4 million).
- 2.0% of all tax returns filed, plus an estimated 15 million (midpoint of the 10-20 million estimate here) legal nonfilers (149.4 million).
- 2.6% of all households, per the Census Bureau (114.4 million).

Then there’s the CNN article that pretty much states neither candidate’s plans look wonderful… but is slightly worse under Obama.

Which gets to the heart of the debate between Obama and McCain. Both say they want to help small-business owners succeed because they generate most of the new jobs in this country. Yet neither tax platform addresses the immediate needs of most small employers.

Cutting corporate tax rates not only doesn’t help most entrepreneurs, few of whom pay such taxes, but also puts them at a disadvantage – especially under Obama’s plan, which would cut rates on big corporations while raising the top marginal income tax rates that many elite entrepreneurs do pay. McCain vows to cut more taxes than Obama would. But what would be the cost in new federal borrowing and higher interest rates – a major concern of business owners?

All that said. what happens when you add Obama’s grandiose plans for $150bil in energy, his education plans that are also big bucks, and sundry other plans? These are not factored in, and they will result in tax increases for funding.

Then, of course, all of these are based on numbers *after* Obama increases taxes by sunsetting the Bush tax cuts.

Gonna be a heckuva ride the next four years under either POTUS. But I suspect the lows will be even “lower” under Obama. He’s one expensive guy. And as both the CAC and his own campaign proves, he surely can spend other people’s money with mediocre results.

For the CAC, his educational experiment showed no difference for the $50K he put into the schools… but his political friends benefited from the $100K they received to get into office.

For his campaign? He’s outspent McCain 3 or 4 to one… yet the spread is still within margin. For that much bucks, the guy should be double digits ahead. McCain’s kept this a close race on a pittance of Obama’s budget.

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My husband does all the taxes and finances in our house, I usually avoid anything related to this like the plague. My question is, does the expiration of the Bush tax cuts, plus the Obama tax increase change the picture as it’s being discussed here? has the tax cut expiraton already been figured into the increase?

I’m just curious, and now maybe you might understand why it is agreed in our home that I don’t do finances?

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Mataharley you are certainly correct that there are several ways to skin the small biz cat, but I don’t think subs are going to change the story much for Joe the Plumber because I understand there are only two plumbers working at that biz.

Hard to clear 250k no matter how you slice that one in terms of employees or subs. If you subbed the two plumbers I don’t see how it would change the math much. In fact my guess is that the biz in question clears about 100k. But note that the issue here is whether Obama’s tax plans hurt small biz. Even when McCain’s plan helps them more the issues are minor until we start talking about folks pulling in millions. You can make a case that we don’t want to kill the gooses laying the golden eggs, but you can’t make a good case that Joe is hurting with taxation under Obama.

Also tricky to compare the plans because there are many factors in the plans and in taxes. Here is a great summary of a nonpartisan study:
http://www.washingtonpost.com/wp-dyn/content/story/2008/06/09/ST2008060900950.html

From this it appears that most family run small biz will pay *less than now* under both plans and that McCain will actually be better after about 150k or so. But for the reasons you note tax mileage is going to vary a lot. depending on biz, family, and tax factors.

Curt and Craig it’s hard to discuss things in the way you want to do it – basically just tossing insults and talking point buzzwords around. Are you adults? Don’t try to put me in a box. I think for myself and have enormous contempt for traditional thinking by Democrats and Republicans – both parties fall back on ideology rather than common sense. The issues facing the country are complex and global. We need a new party based on the principles of the founders of the country which were *small government*, low taxes, a small military, personal accountability, and entrepreneurial capitalism. Neither McCain nor Obama stand for enough of that to make me happy. Both are honorable, flawed guys. If you read their histories and statements rather than just parrot BS Limbaugh talking points it might help you to understand both of them better.

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Just catching up on this thread, and “a contractor” and Joe have valid points, but are missing disclosure on some specifics.

i.e. consider a plumbing/contractor business that uses 1099s and subcontractors instead – thus doesn’t have the payroll taxes and matching requirements. This can affect deductions you are calculating in as deductables, which can include anything from E&O to health insurance, or licensing to payroll taxes.

There’s many taxes involved pre-write offs that may not be included (affecting the needed gross to make $250K for an individual proprietor) with a subcontractor business structure. And many small businesses do not go the “employee” route to guarantee salaries, but merely hire on demand… most especially in the building/contracting industry.

Considering that to hire an employee for, say $50K a year costs an employer at least that plus annually, why not run the numbers for the small business with subtractors instead.

In which case, I do believe your figures are off. But interested in your recalculations for a different business structure. The “one size fits all” stuff doesn’t fly in the real world, IMHO.

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The talking points about Ayers, Wright, Socialism, etc are mostly nonsense – folks simply not following up on the facts. From anti-Obama comments at my blog I’ve spent many hours following up on them, and I’ve seen nothing to suggest Obama poses any risks – on the contrary he’s a guy who thinks broadly about these issues and challenges people like Wright often in his writings. Folks are so busy worrying about Ayers they don’t bother to read Obama’s clear statements that make it clear he’s a decent, loyal, capitalistic guy.

His Socialist bent, his associations with racists, criminals and terrorists….all nonsense.

Pretty much tells me where your coming from. Some people are just so gullible to buy into the messiah crap….this inexperienced Senator with NO experience in foreign policy, who has voted as the most liberal politician in Congress, and has a obvious love for Socialism and Marxism, somehow, someway, is going to sing Kumbaya and the world will be right.

What gullible fools.

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