The Obama tax plan

by on August 13, 2008 at 7:56 am in Economics | Permalink

Obama_tax

Those are the marginal tax rates and how they would change, analyzed here, via Greg Mankiw.  The key point is this: "Reducing a person’s tax credit as his income goes up also reduces his incentive to earn more income."  But before some of you get all upset, I do not intend this presentation as an endorsement of John McCain’s utterances on fiscal policy.

Addendum: I am not saying that Obama is "raising taxes on the poor."  It is about marginal rates and yes marginal rates do matter for incentives.  This is a genuine problem of many indeed most anti-poverty programs, it is not an attempt to mislead anyone.  Don’t treat everything as necessitating a response to right- or left-wing talking points.  You still ought to look at this diagram and think that the "notches" are too discrete and too strong.

Second addendum: Here is an Econ4Obama response.

beamish August 13, 2008 at 8:27 am

Is the argument: cutting taxes on the poor makes them happier, which is bad, because it keeps them from the true (though not preferred) happiness that comes from working harder?

Or is it: cutting taxes on the poor makes them happier, which is bad for people who want to buy their labor?

no August 13, 2008 at 8:29 am

This is one of those cases where a picture isn’t worth a thousand words: the graph is a quite misleading representation of Obama’s tax plan. It is dependent on picking a family with two children: one who is a dependent and one who is in college. The bumps in the graph are due to accelerated phase outs (of sometimes more generous) college and dependent child tax credits.

While phase-outs are equivalent to a tax, it is a bit silly for conservatives to get excited by this fact because it’s probably the case that a family making $15,000 faces the worst marginal incentives of any group in the country (due to phase-outs of various federal, state and local benefits).

Jim August 13, 2008 at 8:45 am

Looks like another screwing of the middle class to me. Nothing like a clear signal from the government that you’re making too much money to keep you in your place.

save_the_rustbelt August 13, 2008 at 8:51 am

“Reducing a person’s tax credit as his income goes up also reduces his incentive to earn more income.”

Actually, after 25 years of tax planning, no such thing happens.

What does happen is an increased desire to use deferral and avoidance planning, so there may be an a short run appearance of disincentive.

Tom August 13, 2008 at 9:15 am

“What does happen is an increased desire to use deferral and avoidance planning, so there may be an a short run appearance of disincentive.”

Well, at least it allows YOU to take home more, Rustbelt.

Richard August 13, 2008 at 9:39 am

Do you think that means I’m going to turn down my raise or promotion at the end of the year?

Schultz, the point is that there are a certain number of people for whom it’s a close call whether they want to earn more, or trade off some income for other considerations such as more leisure time, or a less stressful career. A disincentive in the tax system will cause more of those people to forgo the extra income, than would otherwise have been the case.

Stephen August 13, 2008 at 9:45 am

Normally I love MR. I hate this post. The graph is Completely misleading, as its improperly labeled, which is something that was hammered into me when I was in grad school at GMU. Always label your graphs specifically and correctly. The presented graph cherrypicks a particular demographic taxpayer, presenting as what will occur for all tax payers.

Tyler, I strongly encourage you to properly label this

CDeBoe August 13, 2008 at 9:46 am

Learn to read, please. He didn’t say it “eliminates” incentive, he said it “reduces” it–which it does.

odograph August 13, 2008 at 9:53 am

We have a Federal debt, and short-term deficit. In my opinion that rational theoretical baseline is the tax burden to balance the deficit, and pay a bit down on the debt.

Therefore I am very disappointed when I read lines like this:

The key point is this: “Reducing a person’s tax credit as his income goes up also reduces his incentive to earn more income.”

It pretty much suggests that the baseline is “a person’s tax credit.” Of course a nation told “he wants to take away your credit” will never come to terms with debt!

(not to say that the chart above looks good.)

a student of economics August 13, 2008 at 9:56 am

Thanks for the addendum, Tyler.

Unfortunately, I suspect the vast majority of people who browse and see this chart will come away with the false impression that Obama increases taxes on poor and middle class people (up to $125K/yr in income).

I’m not saying that was your intent, but that’s the effect.

Creating a false and damaging impression, while purporting to be making a different point, has been raised to an art form by partisans (esp. those on one side of the debate, IMHO).

So honest brokers need to be careful about re-using charts, images and factoids that are carefully created and disseminated by ideologically driven foundations. Partisans count on people like you to amplify their distortions and lend an air of legitimacy.

Clay B August 13, 2008 at 10:03 am

What is the notch where the marginal rate goes to zero for current law???

brian August 13, 2008 at 10:10 am

I think the last line of that article, ““tax cuts for the middle class† are actually marginal rate hikes in disguise.” is intentionally misleading. While it’s factually correct (for their cherry picked demographic at least), it seems that they are trying to make it look like it raises absolute taxes on middle income individuals.

In response to Tom saying “Well, at least [a lower marginal tax rate] allows YOU to take home more, Rustbelt,” Obama’s plan actually allows 95% of Americans to take more money home than does McCain’s plan. Marginal tax rates are about efficiency whereas average tax rates are about how much money you take home. Average tax rates for 95% of Americans would be lower under Obama than under McCain.

Nathan Koren August 13, 2008 at 10:25 am

Sorry, but even with your addendum, this is a hackneyed piece of FUD. I agree that the discontinuities are too strong in both the existing tax code and Obama’s tax plan, but the primary effect of this chart is to imply a tax increase on the poor, which is of course utterly false.

The only way to cut taxes *without* creating an increase on the margin is to only cut them for the wealthy — or, in the best case scenario, by the same amount for wealthy and poor alike. Obama’s plan cuts taxes a lot for the poor, and a little for the middle class, while raising them slightly for the wealthy. Naturally, this creates a steeper gradient of progressive taxation — in other words, more taxes on the margin.

So Alex Brill’s complaint is that under Obama’s plan, wealthier people don’t get their taxes reduced by the same amount that poorer people do. Well, boo-f-ing-hoo for them. Brill has worded this complaint in a disingenuous fashion, so that unless you’re paying really close attention it sounds like Obama is actually raising taxes on the poor. What absolute rubbish.

And all that stuff about higher marginal rates reducing incentives to earn? Sorry, but people — especially poor people — simply aren’t that rational on the margin. Having grown up in and around poor families, I’ve never known anyone to turn down additional income because it would increase their taxes. The very idea is laughable. Only ivory-tower idiots with their own personal tax accountants could ever come up with crap like that.

Max B. Sawicky August 13, 2008 at 10:55 am

Where’s the below $25K part of the spectrum? Do Obama’s changes in the EITC alter incentives in this region, where implicit marginal tax rates can be very high? Why doesn’t Viard tell us?

In this up-is-down world, the provision of an increase in after-tax income, which would be expected to increase labor force participation, is depicted as a penalty on earning. But this is true only at the margin for those low-income workers who can reconstruct an Excel chart of their total marginal tax rates, something I daresay few people in this thread or Tyler can do. Do you know, for instance, how the Child Tax Credit, Additional Child Credit, EITC, and Dependent Care Tax Credit stack and affect your MTR? I doubt it.

In fact most evidence is that the relevant marginal decision is not an extra hour of work, but to work full-time, part-time, or not at all. In which case these MTRs don’t mean anything.

Happy Camper August 13, 2008 at 11:12 am

Most U.S. Corporations Pay No Income Tax

Two out of every three United States corporations paid no federal income taxes from 1998 through 2005, according to a report released Tuesday by the Government Accountability Office, the investigative arm of Congress.

The study didn’t say whether the companies that paid no taxes were acting properly within the tax code or illegally evading it. It also found that the largest U.S. companies were more likely to pay income tax than small ones.

Even so, the report, done at the request of two Democratic senators, Carl Levin of Michigan and Byron L. Dorgan of North Dakota, is likely to add to a growing debate among politicians and policy experts over the contribution of businesses to Treasury coffers, The New York Times wrote.

Senator Levin said in written remarks on Tuesday that “this report makes clear that too many corporations are using tax trickery to send their profits overseas and avoid paying their fair share in the United States.”

liberty August 13, 2008 at 11:27 am

I do agree with some of the comments that for very low income people the marginal rate incentive structure is different.

Certainly people don’t work out their MRs in advance, and respond by working a bit more or less to avoid phaseouts. The very wealthy may do things like that in advance if their accountant figures it out the year before, but the lower income groups certainly won’t.

However, for the very poor, some of the larger credits and cut-offs/phase-outs will be known, from the year before or from being told by someone, and it could determine (1) whether the person takes a job or stays on income support or under-the-table work, (2) whether a person goes from part-time to full time or from easier to harder work which pays more but then the increase is partly eaten away by loss of credits.

This is known to happen when e.g., welfare/dole is cut-off, which is why for credits like the EITC they are phased out very slowly and incrementally in order that there is as little disincentive as possible to earning more income.

Finally, I would note that the two major jumps in the graph are not on the lowest income folk, but on $45k and $110k of AGI. These are hardly the lowest income folk.

I would also add that I agree that the MR incentives are stressed too much compare to effective rates, which have plenty of efficiency implications as well, considering that they describe what the private sector spends compared with the public sector. Marginal rates only matter at the margins.

Andrew August 13, 2008 at 11:43 am

I guess some people would rather not have seen this post.

I’m so tired of seeing mis-labeled or unlabeled charts, wrong or non-existent units, etc. that I don’t even expect it anymore.

But this one is pretty good. It says “Effective Marginal Tax Rates”

I guess it would only be better for some if it was labeled “Misleading Partisan Chart – Obama Evilness vs Status Quo”

Greg August 13, 2008 at 11:58 am

Richard, I think what we’re saying is that the marginal effect is negligible. Asserting that it still exists is fine, but it doesn’t mean anything in real terms. I’d love to see any analyses you’ve seen of the impacts of changes in phase-outs on people’s behavior, mainly because I don’t believe they exist. This simply is not the same as changes in headline marginal tax rates.

Richard August 13, 2008 at 12:48 pm

I’d love to see any analyses you’ve seen of the impacts of changes in phase-outs

I have no studies to cite. I’m thinking back to discussions of the topic in my student days, which were more than a year or two ago.

My last paragraph was an implied invitation to anyone on my side of the question who IS an economist to elaborate on any empirical work.

liberty August 13, 2008 at 1:00 pm

What are “effective” marginal tax rates?

Effective marginal tax rates are the rate a tax payer faces on the marginal dollar once all credits, deductions and other phased tax level modifications are taken into account.

Nominal marginal rates are just the advertised rates faced on the marginal dollar, not accounting for deductions and exemptions and such things.

Hence you can calculate your “marginal tax rate” (nominal) just by adding up the rates you face on your wages with the rates you face on capital gains, etc, for that next marginal dollar. But to calculate your effective marginal rate you need to first calculate your AGI, for which you need to calculate your deductions and exemptions and credits and so forth; then add a marginal dollar, and then calculate the rate that marginal dollar will be subjected to.

a student of economics August 13, 2008 at 1:18 pm

Actually, Tyler doesn’t call them “effective” marginal tax rates.

He just says flatly “Those are the marginal tax rates..”

And leaves it to the reader to conclude that Obama is raising taxes on the middle class.

Bob Montgomery August 13, 2008 at 1:22 pm

Everybody keeps talking about “low” incomes…the graph covers the range 25K to 125K.

Isn’t that pretty much the middle class?

Zephyrus August 13, 2008 at 1:38 pm

I don’t find the graph that offensive. It could use more nuance–stating the family it’s considering, for instance. I’d be much more interested in seeing it for a wider variety of families. But the effective marginal tax rate is something important, though it’s easy to overstate how significant it is for lower income families.

The big issue is the post itself. “The Obama tax plan”? Please. “Those are the marginal tax rates”? An outright lie.

What would shed the most light is somehow combining a basic graph showing the actual marginal tax rates, in Obama’s plan and in current policy (and maybe a comparable one for McCain) and then somehow overlaying the effective marginal tax rates on it. But doing that well would take more skill in graphic design than I have.

scottynx August 13, 2008 at 1:56 pm

Zephyrus, the post didn’t claim to be the compendium of Obama’s whole tax plan. Marginal tax rates are indeed a part of a tax plan, so the title isn’t an “outright lie”. Yes, the post is about “The Obama Tax Plan” and it’s narrow focus doesn’t change that.

Zephyrus August 13, 2008 at 2:28 pm

scott, I never said that the title is a lie; just the “those are the marginal tax rates”; clearly, they are not the marginal tax rates. They’re the effective rates, which you and I both know are very different beasts. Equating them is a very bad misrepresentation.

As for the title, by itself it would just be overly broad. Most people, however, think of tax plans in terms of the marginal tax rate. By not making it clear from the start he wasn’t talking about the marginal tax rate but instead the effective one he could mislead the uncareful reader.

SheetWise August 13, 2008 at 2:33 pm

This entire thread is a great argument in favor of a flat tax and eliminating the politics of envy.

It’s really nobody’s damn business how much money anyone makes — least of all the government.

Obs August 13, 2008 at 3:34 pm

I’m mainly just curious about the big dip/big spike around 45,000. Is there a reason this is the sweet spot that current tax law wants to push people into, and the Obama proposal wants to keep people on one side or the other?

debra August 13, 2008 at 4:51 pm

Air America — Hannity style
by tod from abq
Wed Aug 13, 2008 at 12:52:14 PM PDT

I’ve been wondering how left wing radio could be more successful, and figured that some insight might be gained by mimicking how Republican Radio does it, except from the Democrat perspective.

Follows is a typical outline of a Hannity style Democrat show during this election cycle.

Make sure a segment does not pass without reminding the audience that John McCain abandoned his wife because he no longer deemed her attractive enough after she was in a car accident (“He abandoned her in her time of need because she wasn’t pretty enough anymore!”) Repeat this over and over and over.

Screen callers for people to express their outrage and disbelief at McCain’s behavior. Remind everyone over and over and over that even Nancy Regan found McCain’s behavior despicable. After doing this for a couple months and people think you’re about to give it up, keep repeating it anyway.

Repeat over and over and over that McCain called his current wife the C word (“I can’t say it on the radio, but it starts with a C and rhymes with Bunt.”) Express outrage, have callers express outrage. Repeat repeat repeat.

Have a sound track that you play over and over of a woman screaming as she is beaten black and blue and tell everyone, glibly, “McCain thinks that’s funny. I don’t think that’s funny. But McCain thinks that’s funny. Unbelievable. Unbelievable.”

Repeat over and over that McCain’s wife stole charity money so she could illegally buy and consume drugs.

Get a caller to express dismay that you’re dragging the wife into this and say, “I’ve got a question for you. It’s a yes or no question. Do you think stealing charity money to buy illegal drugs is good behavior for a first lady? Just answer yes or no.” Ignore that maybe the wife has changed, payed for her crime and has been rehabilitated. Do not let facts or even relevance to current times get in the way of throwing slime, ever!

Put together an audio track that strings together incidents where McCain has stumbled, lost his place or become incoherent. Play that over and over and over. Conclude with saying, “And some people think this person is ready for a 3 AM phone call. Unbelievable. Unbelievable.”

Have fans of the show call in and say, “You’re the great voice of America, Tod (host’s name.)” Act humble and say, “You’re the great voice of America! What’s on your mind today?” Make “the great voice of America”, or “the voice that keeps America great” you’re calling card. There’s no room for humility or modesty here.

Basically be as hateful (without sounding angry: the voice should generally always sound bemused), mocking and extremely thoughtless and repetitive and disparaging of McCain in every way you can. Don’t muddy things by going into complicating detail or adding substance. Don’t get bogged down with context or nuance. Keep it very simple.

Turn facts into half truths, and half truths into quarter truths, all for the singular purpose of disparaging and insulting McCain’s character. If McCain publicly complains, play the sound track of the complaint while laughing mockingly in the background. Be sure and have a caller come in after this saying, “You’re the voice that keeps American great!”

Check the news occasionally. If McCain or a McCain supporter has done something that can be made to look very bad (even if distortion and leaving out context is necessary), make that your lead line. If nothing like that happened, go to the standards, “McCain abandoned his wife in her time of need,” etc.

There you go. Democrat radio Hannity style!

I kind of wish some one on the radio would actually implement just this formula. The problem is, people on the left tend to have good hearts and would find it very difficult to be so consistently despicable. But one can alway hope.

Aiken Blue August 13, 2008 at 5:45 pm

Obama has a better sense in economics and knows what must be done. Please vote for Obama, visit WHYOBAMA08.ORG!

Anthony August 13, 2008 at 10:28 pm

The graph isn’t mislabeled, though it is misleading. The cherry-picked assumptions aren’t even the worst part.

The biggest problem is not showing marginal rates for $0 to $25000, because that’s where lots of the action is. Would Obama’s tax plan have lower marginal rates than the current structure, or McCain’s plan? The details at those income levels matter to everyone, even those with higher income.

Ricardo August 14, 2008 at 12:10 am

As many have pointed out, the graph may not be mislabeled, but it is certainly misleading because it doesn’t specify the assumptions behind it (i.e., the household characteristics and the reasons why the marginal tax rates look the way they do in the graph).

Those of you who defend it (Andrew, Yancey, scottynx, Jayson), should think about readers who (a) are not well-versed in economics jargon, or (b) spend 15 seconds looking at the graph. Many of them will obviously believe that Obama’s plan results in higher taxes for medium class households, which is certainly not true.

A graph/argument that is designed to cause erroneous interpretations is dishonest, even if it is correct when it is strictly interpreted.

An honest post by AEI or Mankiew would have clarified that the effective tax rates would be lower for most of the income range shown in the picture, and would have discussed how marginal tax rates would change if there is no college-bound child, only one earner, etc. But of course, that’s too much to ask, isn’t it? In the end, everyone seems to want to show their side of the story and that’s exactly what this graph is.

a student of economics August 14, 2008 at 10:08 am

Andrew:

The point was that several commenters were justifying Tyler’s post by saying it referred to “effective marginal tax rates” not just “marginal tax rates”. I simply pointed out that this is NOT what Tyler wrote and thus he took a very misleading graph and managed to make it even more misleading. In fact, his claim was literally false.

The terms do differ in their meaning. Here’s what wikipedia says, for instance:

“An effective marginal tax rate (or marginal effective tax rate, marginal deduction rate) may differ from a marginal tax rate because the taxpayer may be in an income range in which he is subject to a phase-out of some exclusion or deduction”

The facts are pretty simple:

1. Obama proposes cutting taxes on the people in the range of the graph. The people in the graph have MORE take home pay — lower taxes — under Obama’s plan. In fact, his plan even reduces taxes as a share of GDP overall. See today’s WSJ article: http://online.wsj.com/article/SB121867201724238901.html?mod=opinion_main_commentaries

2. The sine qua non of GOP politics is to claim the Democrat will raise taxes. However, this is not true for Obama’s plan.

3. No problem. Hired ideologues artfully concoct a chart which makes it appear that Obama’s raising taxes. This was the first chart I’d seen of Obama’s tax rates in this range and, mirabile dictu, it shows his lower overall tax rates as higher numbers than the higher tax rates. Coincidence? I’m not that naive. And of course, the circumstances of the taxpayer in question were carefully cherry picked to give a particular outcome.

4. I’ll give Tyler the benefit of the doubt and assume he wasn’t trying to mislead people, unlike the creators of the chart, IMHO. However, he served their purpose ably by echoing it and even amplifying the distortion by dropping the fig-leaf of “effective” from his description.

5. Tyler got an earful from the commentators. They’re the ones who recognized the deceptiveness of the graph. Sadly, the partisans who create such graphs are often willing to accept the scorn of people who dig a little deeper into their claims and the elitist “experts” as long as they can create the impression they want among the bulk of the voters who see their “research” conclusions. My idealistic hope is that MR would not be a facilitator of such obfuscation.

Andrew August 14, 2008 at 10:52 am

Good call on the WSJ.

I didn’t even have to get past the by-line (although I did read it)

http://en.wikipedia.org/wiki/Austan_Goolsbee
He has been Barack Obama’s economic advisor since Obama’s successful U.S. Senate campaign.
http://en.wikipedia.org/wiki/Jason_Furman
Jason Furman (born 1970) is a top economic adviser to Senator Barack Obama’s 2008 campaign for President of the United States.[1]

Reading through that WSJ opinion piece makes me feel all warm and fuzzy. The objectivity, clarity, responsibility, compassion and simplification almost bring a tear to they eye.

The authors invoke Clinton’s deficit reduction plan. All Obama’s promises sound great, just like Bill Clinton’s. Is he going to renege on them like Bill Clinton did? The authors basically make the point that when Democrats lie, it’s better to believe them anyway.

People people people.

He pointed out they were “marginal rates” as in NOT “rates,” and as in the REAL marginal rates, not the tripe in the 1040 tables.

Tyler is one of the most evenhanded commentators around. I think he’s the most objective blogger I’ve read. Not only is it his nature, but he obviously works at it. In this post he advanced more reservations than indian gaming.

Take off the blue shaded goggles.

Snorri Godhi August 14, 2008 at 11:46 am

For me, the interesting thing about the graph is how deranged American tax law already is.

Jake August 14, 2008 at 1:52 pm

Here is Alan Viard’s response (co-author of the cited paper) on Econ4Obama:

Alan Viard said…
As one of the authors of the article being discussed, I want to respond to the unfounded accusations made here.

Gelbach’s suggestion that we “cooked” the numbers is a vile libel for he which he presents no evidence. The accusation is utterly false.

Gelbach also says that it is “deeply dishonest” and a violation of “basic honesty” to say that Obama’s plan would raise marginal tax rates as well as reducing tax payments. In fact, since Obama’s plan would do both of those things, basic honesty requires that both effects be mentioned, as we do in our article. We repeatedly make clear that Obama would cut taxes for the poor and the middle class: the topic sentence at the beginning of the second paragraph states that “Obama is offering a new series of tax breaks,” the next paragraph says that he would make some tax credits refundable (and illustrates refundability with an example which makes clear that it involves a reduction in tax payments), the fifth paragraph mentions that he would expand a tax credit and repeats that he would make credits refundable, and the seventh paragraph mentions that he would increase another credit’s maximum value. Gelbach himself quotes some of these statements. It is unclear what aspect of Obama’s tax plan we are supposed to have concealed, but it certainly can’t be the fact that he’s cutting taxes.

Yesterday, one blog (that apparently looked at the chart without the article) did trumpet our work as showing that Obama would impose “higher taxes” on nearly everyone; I immediately posted a comment explaining that Obama would lower tax payments.

The point our article makes is that Obama’s tax cuts are designed in a way that increases disincentives by raising marginal rates and increases complexity. Since Gelbach himself admits that the disincentive effects exist (and explains why they arise), it is unclear why he considers this claim dishonest.

Of course, he’s perfectly free to draw different policy conclusions from this fact; that’s the kind of debate Alex and I hoped to encourage. So far, the disincentive effects have scarcely been mentioned, so pointing them out is a necessary step towards informed discussion.

The reason we graph effective marginal tax rates rather than average rates is because the former, not the latter, control incentives, which was the topic of our article. The fact that Obama’s plan lowers average rates in this income range is clear from the text of our article (as explained above) and is abundantly documented elsewhere (see the excellent calculations by the Brookings-Urban Tax Policy Center study that we cite in our article). Steve Roth asks why we label our graph of effective marginal tax rates “Effective Marginal Tax Rates”; the answer, to coin a phrase, is basic honesty. Our label makes clear that we are not talking about, or claiming that Obama would raise, average tax rates.

I don’t have space to defend the example, but it is not “cherry picked.” Some other examples would show bigger disincentive effects; others would show smaller. Unfortunately, there is no typical example to fall back on, because different kinds of households are affected in so many different ways. But, since it’s undisputed that Obama makes credits refundable and increases the use of phase-outs, any example will show these kinds of disincentive effects. Can any of our critics construct a remotely realistic example that doesn’t? Again, Gelbach himself admits that the disincentive effects exist. (As a side note, the child in our example need not, of course, be exactly 12, but can be any age 12 or younger).

Alex Brill and I hoped that our article would call attention to the disincentives and complexity of Obama’s tax cuts, an important topic neglected in the discussion to date. It is unfortunate that this discussion has been sidetracked by misinterpretations of the (clearly stated) points in our article.

Alan D. Viard, Resident Scholar
American Enterprise Institute

jonah gelbach August 14, 2008 at 5:08 pm

in case anyone’s still interested, here’s my response to viard’s comment, a version of which he posted at E40.

SheetWise August 14, 2008 at 7:34 pm


Jayson Virissimo;

Am I the only one that is embarrassed by the fact that people that regularly read economics blogs don’t know what a marginal tax rate is?

No. You’re not.

I begin to wonder how much thought has gone into marginal utility, let alone marginal earnings and marginal tax rates.

The entire concept of taxation in its current form seems to accept as a given that interpersonal calculations of marginal utility are meaningful and valid.

While I recognize that this is a norm among politicians and laymen — I think that economists should be embarrassed to be associated with it.

William Freeland August 18, 2008 at 10:35 pm

Now, now “Plank;” you may find the policy conflicts with your values or your preferred policy position but your comments are unreasonable. The question of disincentive is important to people who seriously consider economics & fiscal policy beyond partisan demagoguery. No need to come forward with belligerent comments (“slave”…”disgusting”…please, highly unreasonable!) when serious (and might I add non-partisan) policy implications of either candidate is scrutinized.

GHM August 31, 2008 at 2:25 pm

Your people are nuts and have no idea what its like to be poor..
Cutting taxes on the poor will let them be able to buy food, pay for their rent, and help with their chirdrens health
Maybe that will help them get out of the gutter!

David Mathews September 7, 2008 at 4:06 am

All of you are missing the point completely. Obama’s tax plan is worthless. It’s very simple. He touts his tax cuts to the middle class and his tax increase to the top 1%. But what you all are forgetting is all his great social programs…universal health care, college for everyone, cutting taxes for business, etc. Where do you think the money is going to come from for all these social programs?

Last time I checked the government doesn’t MAKE MONEY!!!!!! Don’t tell me he is going to slim down the budget or cut programs, because we are in a budget deficit and if you cut the budget you still have a deficit to pay off. Politicians have been tossing that line around since the beginning of time. The money for these programs is going to come from more increased taxes in other areas, which will only make his “Tax Cuts” meaningless. And there has never been a government program that once it is started that has ever been cut. They are there forever.

The only real equal tax plan is a flat tax! Everyone pays the same percentage…whatever that is. It’s common sense, and it doesn’t take a rocket scientist to figure it out.

Fred October 13, 2008 at 12:51 pm

I’ve been very poor, so I know what it’s like to be poor. I’m still on the very low end of the middle class spectrum. I was benefitted by the Bush tax cuts. I’d hate to lose that little money I got. And Obama wants to get rid of them. And he isn’t going to cut taxes for the poor since they don’t pay taxes. You can’t cut what doesn’t exist. Obama wants to give money to the poor, not cut their taxes. That’s welfare. You can put lipstick on a pig….

David October 16, 2008 at 2:29 pm

The one question NO ONE is addressing… WHY are those people, who are poor…poor? It is AUTOMATICALLY presumed that “the system” is to blame for their low economic status. “The Man” has kept them down in the track. Never is the assumption that perhaps they are poor because of their own foolish choices, plain stupidity or laziness, which I maintain MOST LIKELY accounts for 90% of those are poor, being poor or remaining poor. And yet, over the years, our economy has flourished relatively speaking. Not only how, but WHO do the Obamaniacs think contributed mostly to the economy when the econmy was flourishing? I don’t think that they want to hear the answer..”Joe the Plumber” types who have taken the fruits of their success and plowed it back into their business and thus created opportunities for others. Mark my words, if Barack is elected and is allowed to put in place his tax schema, there will NOT be an increase in employment, there will be a marked DECREASE. Why should the “Joe the Plumber” or “George the Carpenter” types personally and individually suffer by the increased taxation? Soon, 2 of those 12 plumbers who work for Joe will soon find themselves out of a job. Now, I guess the Obama Plan can say that “we are going to increase your taxes because your business made more than $250K, but we are not going to allow you to either pass it on to your customers or allow you to reduce staff”. There’s a word for that too, and no it’s not socialism… it’s slavery. My father was a blue-collar “Joe the Plumber” type who helped improve our American way of life.. or at least what use to be the American way. Redistributing or sharing the wealth with those who are poor THROUGH NO FAULT OF THEIR OWN I have no problem with. 90% don’t fall into this category though, yet under B.H.O. these people are going to benefit.

Anonymous November 3, 2008 at 12:20 pm

Barack Obama says he has a tax plan. John McCain says he has a tax plan. Hillary Clinton, John Edwards, Mitt Romney, Rudy Giuliani—everyone who runs for President claims to have a tax plan of some sort. But what they all fail to mention is that the U.S. Constitution does not grant the President the power to craft tax plans and unilaterally make them into law, as is the case in dictatorial regimes.

According to Article II of the Constitution, the role of the President is limited largely to conducting international affairs, serving as Commander-in-Chief in times of war, and appointing federal judges, ambassadors, and heads of cabinets and certain agencies. The power to raise, lower, repeal or create taxes is the exclusive province of Congress (Article I, Section 7). Presidents do have the power to veto or sign off on tax bills passed by Congress and, as leaders of their political party, exert influence on members of Congress to get their tax plans passed, but Congress is not legally bound to comply (the separation-of-powers principle).

So when Obama, McCain and other would-be Chief Executives tell
voters that they plan to raise taxes here, lower taxes there, give tax breaks to the middle-class, small businesses, working moms, the elderly, the poor, etc., voters should be warned that they are being mislead, if not conned, by professional politicians doing whatever they deem necessary to get elected.

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Ricco Von Tutti March 1, 2009 at 4:37 am

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