Why does Obama want to raise taxes?

[Wangler]

I am hearing alot about how the current crisis is really affecting the ability of small businesses to get the credit they need to remain in business.

So, why does Obama want to raise taxes on the income rates that are dominated by small business owners, and squeeze them further?

How can this be viewed as a good idea?

I think that McCain should push this point in campaign ads.

 

[Gurdur]

1) Lowering income taxes won't help at all with the current credit crunch.

2) The USA has far too large a deficit. It has to learn to live within its means, as do we all.

 

[Puppycow]

I am hearing alot about how the current crisis is really affecting the ability of small businesses to get the credit they need to remain in business.

Yes.

So, why does Obama want to raise taxes on the income rates that are dominated by small business owners, and squeeze them further?

Income taxes, you mean? He only wants to raise income taxes on people making over $250,000/year (Approximately the top 2% of taxpayers). 81% of households would get a tax break and a majority of taxpayers would get a bigger tax break under Obama's plan than under McCain's.

How can this be viewed as a good idea?

The fiscal deficit is huge, for starters.

I think that McCain should push this point in campaign ads.

When has McCain ever missed an opportunity to claim that Obama wants to raise your taxes?

 

[Wangler]

1) Lowering income taxes won't help at all with the current credit crunch.

Perhaps, and perhaps not. It seems obvious that a tax increase would be less helpful, if not damaging to the economy.

2) The USA has far too large a deficit. It has to learn to live within its means, as do we all.

That is correct. McCain claims that he will drastically reduce spending. Average tax cut across all incomes is 2% for McCain's plan, and 0.3% for Obama's plan, so they both need to cut spending to reduce the deficit.

 

[Puppycow]

McCain claims that he will drastically reduce spending.

BwaaaHaaaHaaaa! That's a good one. Remind me what specific programs he promised to cut again and how much that would save?

I promise a chicken in every pot, a spring in every step, and a pot of gold at the end of every rainbow.

 

[Wangler]

Income taxes, you mean? He only wants to raise income taxes on people making over $250,000/year (Approximately the top 2% of taxpayers).

According to this analysis,

The Tax Policy Center and the Barack Obama campaign used some sleight of hand this week in Politico. To quote Eric Tolder of the TPC, “Most small-business people, like most everyone else, are not really high-income.” While this is true, it completely and totally misses the point.

Let’s start with the definition of a “small business.” Most will tell you that small-business income constitutes income derived from sole proprietorships, partnerships and Subchapter S corporations.

The conservative argument (and that of the John McCain campaign) is that Obama’s stated plan to raise taxes on households making $250,000 or more in income is a tax increase on small business. The simple answer to this dilemma can be found in the IRS Statistics of Income Bulletin (Table 1.4, for those who are interested).

So what do the data say?

In 2006 (the latest year available), $706 billion of such income was reported to the Internal Revenue Service. Of this, about half was reported by households in the top marginal income tax rate. Interestingly, two-thirds of this income was reported by households making $250,000 per year or more — the very same households that Obama wants to increase taxes on.

Obama is not hitting the fat cats, he is hitting small business. Not a good idea, not good at all.

81% of households would get a tax break and a majority of taxpayers would get a bigger tax break under Obama's plan than under McCain's.

Well, I'm not one of the folks who will get the largest tax break under McCain's plan, but I like how 100% of households get a break under his plan.

The fiscal deficit is huge, for starters.

Yeah, but both candidates are going to have to reduce spending. You cannot tax the USA into economic stability.

When has McCain ever missed an opportunity to claim that Obama wants to raise your taxes?

Well, I mean he should be specific, and say the vary small businesses feeling the crunch right now are who Obama will hit hardest.

 

[Wangler]

BwaaaHaaaHaaaa! That's a good one. Remind me what specific programs he promised to cut again and how much that would save?

the first one that comes to mind is his moritorium on discretionary spending for one year.

I promise a chicken in every pot, a spring in every step, and a pot of gold at the end of every rainbow.

Alright, alright, enough with the Obama boiler-plate.

 

[Gurdur]

It seems obvious that a tax increase would be less helpful, if not damaging to the economy.

Might seem that way to you, but inflationary bubbles must burst sometime; the credit crunch is just one such bubble. That is what is hurting the economy, that and --- heellllllooooo --- a huge deficit.

Not taxes.

One clue: someother countries such as Germany have higher taxes, yet manage to have living standards the same as in the USA (and in some areas, better). It's all about how you spend the tax money, and on what; the USA isn't too logical about it all, not to the benefit of its entire population, anyway.

so they both need to cut spending to reduce the deficit.

Perhaps. We shall no doubt see what happens. Spending cuts might not be necessary if taxes were rational and spending far more rational.

 

[Puppycow]

the first one that comes to mind is his moritorium on discretionary spending for one year.



Alright, alright, enough with the Obama boiler-plate.

The big-ticket item Obama would cut is the Iraq war. That costs about $100 billion/year (caveat: It obviously would take some time before there are big reductions because the withdrawal is supposed to take about 19 months).

Any idea how much the moritorium would save?

 

[Puppycow]

Obama is not hitting the fat cats, he is hitting small business. Not a good idea, not good at all.

Sometimes hard choices have to be made. Who would be hurt more, those "small" business owners making more than 250K or the people who would be affected by McCain's spending freeze in already tough economic times?

From where I stand 250K seems like a lot (over 4 times what I make), and it would only be a marginal tax increase. IIRC, the top rate would still be less than it was under Reagan and the same as in the 90's, which was a good decade for economic growth.

 

[leftysergeant]

What kind of small business earns its proprietor over 250K/y?

Most of the people making really big bucks these days are in the financial sector. They're the ones who got us into the current jackpot of compost. I do not want to hear them whining.

Actually, certain spending will help get us out of this mess. Like a major re-build of our infrastructure (with American companies doing the work and foreign interests like those who have bought and now operate some of our highways as toll roads left out in the cold.)

A redistribution of wealth is in order. If we are to subisdize the financial sector in anyway, we deserve equity.

 

[Puppycow]

A redistribution of wealth is in order. If we are to subisdize the financial sector in anyway, we deserve equity.

I'm pretty sure that "redistribution of wealth" is not a political winner in America.

 

[leftysergeant]

But we have had over seven years of redistribution of wealth already, to our hurt.

It is being redistributed from those who produce it to those who just paly games with it. It is redistributed in one direction only, upward. No civilization has been able to survive that for long with severe social turmoil. Think of the Roman latifunda. They were the equivalent in ecconomic power of Walmart. Great for the owners, and toxic to the civilization.

 

[kallsop]

Yes.

Income taxes, you mean? He only wants to raise income taxes on people making over $250,000/year (Approximately the top 2% of taxpayers). 81% of households would get a tax break and a majority of taxpayers would get a bigger tax break under Obama's plan than under McCain's.

???? Is that 81% equivalent to his campaign rhetoric of 95% of Americans will get a tax cut? (yes, I am aware of FactCheck and their "out of thin air" analysis).

I take it you disagree with Obama when he stated that a tax increase on the wealthy will hurt the economy?

 

[The Painter]

Tax those horrible people who make too much money. If your boss makes more than $250,000 tax the crap out of him/her.

Vote for higher taxes on your boss!!! Put him out of business. ...No wait....what???

 

[leftysergeant]

Tax those horrible people who make too much money. If your boss makes more than $250,000 tax the crap out of him/her.

Vote for higher taxes on your boss!!! Put him out of business. ...No wait....what???

(Translation: WAH! They want me to put back into the system I exploit.)

Very emotional response. The investor class are just not pulling their share of the load now. Time for that to stop. They don't create the wealth, so they need to support the people and the infrastructure that do.

 

[Meadmaker]

Obama is not hitting the fat cats, he is hitting small business. Not a good idea, not good at all.

There's something I don't get. If you are making 250,000 bucks per year, in my book, that makes you a fat cat. I really don't care how you make it.

And the idea that somehow this tax will strangle small business doesn't make sense to me. If you take the money you earn in your small business, and use it to pay employees, or expand your business, or keep the lights on in the store, it isn't taxable income. How would this have any effect on small business at all?

 

[Tricky]

Isn't the tax on income? It is not a tax on business expenses. If a small business owner is making a quarter mil per year, in income, He's in no danger of going out of business even if you doubled his taxes. He might not be able to afford that new Lexus.

Small business owners with low profit margins aren't going to be affected.

 

[mhaze]

In 2006 (the latest year available), $706 billion of such income was reported to the Internal Revenue Service. Of this, about half was reported by households in the top marginal income tax rate. Interestingly, two-thirds of this income was reported by households making $250,000 per year or more — the very same households that Obama wants to increase taxes on. Obama is not hitting the fat cats, he is hitting small business. Not a good idea, not good at all.

Well, I mean he should be specific, and say the vary small businesses feeling the crunch right now are who Obama will hit hardest.

Yep, he should be specific and say he's a bald faced liar when he talks about lowering taxes?

 

[ZouPrime]

Tax those horrible people who make too much money. If your boss makes more than $250,000 tax the crap out of him/her.

Vote for higher taxes on your boss!!! Put him out of business. ...No wait....what???

This has nothing to do about targeting "horrible" persons, and everything to do with where the money is. The rich has money, per definition, that's why they are asked to pay more. That's why we have a progressive income tax rate and not a flat one.

The goal is to finance the government, not "get even" with "the rich".