Friday, October 10, 2008
Fun with numbers
This is good:
"Mr. Obama will give 95% of American working families a tax cut, even though 40% of Americans today don't pay income taxes! How can our star enact such mathemagic? How can he "cut" zero? Abracadabra! It's called a 'refundable tax credit.' It involves the federal government taking money from those who do pay taxes, and writing checks to those who don't. Yes, yes, in the real world this is known as 'welfare,' but please try not to ruin the show.
"For his next trick, the Great Obama will jumpstart the economy, and he'll do it by raising taxes on the very businesses that are today adrift in a financial tsunami! That will include all those among the top 1% of taxpayers who are in fact small-business owners, and the nation's biggest employers who currently pay some of the highest corporate tax rates in the developed world. Mr. Obama will, with a flick of his fingers, show them how to create more jobs with less money. It's simple, really. He has a wand."
Over at Powerline, John Hinderaker says a President Obama might pull a Bill Clinton and renege on his campaign promise vis-à-vis taxes. But whereas Clinton broke a promise to cut taxes for the middle-class, Obama may have to break his promise to soak "the rich" with new taxes:
The current worldwide financial collapse has obviously benefited Barack Obama's Presidential campaign; in fact, it will probably impel him to victory in a few weeks. But the bottom dropping out of the stock market does create a problem for Obama in the realm of tax policy.
The Democratic Party still dominates among low-income voters, but it is now mostly the party of the rich and the professional classes. The Democrats' indifference to blue collar voters (except during even-numbered Novembers) is obvious from the party's policies on immigration and energy. Obama, in particular, is the candidate of well-off liberals.
But those Obama supporters aren't so well-off anymore. This inevitably will make them more sensitive to Obama's redistributionist tax policies.
The Tax Prof computes that the top marginal federal tax rate under Obama's tax plan will be 50%, and under McCain's, 40%. If you live in a state with an income tax and are a high income earner, most of your money will be going to taxes under an Obama administration.
My guess is that Obama supporters who have just seen their net worth decline by 30% or 40% won't be very interested in paying over half their incomes in taxes for the next four years. That would make it more difficult, and likely impossible, to rebuild the wealth that they have lost in the current collapse.
It's impossible to say how many Obama supporters will switch to McCain to avoid the tax burden that Obama promises, but one thing we can say for sure is that if Obama wins, there will be a lot of pressure on him from prosperous Democrats--his base--to renege on his promise to increase taxes on "the rich."
"Mr. Obama will give 95% of American working families a tax cut, even though 40% of Americans today don't pay income taxes! How can our star enact such mathemagic? How can he "cut" zero? Abracadabra! It's called a 'refundable tax credit.' It involves the federal government taking money from those who do pay taxes, and writing checks to those who don't. Yes, yes, in the real world this is known as 'welfare,' but please try not to ruin the show.
"For his next trick, the Great Obama will jumpstart the economy, and he'll do it by raising taxes on the very businesses that are today adrift in a financial tsunami! That will include all those among the top 1% of taxpayers who are in fact small-business owners, and the nation's biggest employers who currently pay some of the highest corporate tax rates in the developed world. Mr. Obama will, with a flick of his fingers, show them how to create more jobs with less money. It's simple, really. He has a wand."
Over at Powerline, John Hinderaker says a President Obama might pull a Bill Clinton and renege on his campaign promise vis-à-vis taxes. But whereas Clinton broke a promise to cut taxes for the middle-class, Obama may have to break his promise to soak "the rich" with new taxes:
The current worldwide financial collapse has obviously benefited Barack Obama's Presidential campaign; in fact, it will probably impel him to victory in a few weeks. But the bottom dropping out of the stock market does create a problem for Obama in the realm of tax policy.
The Democratic Party still dominates among low-income voters, but it is now mostly the party of the rich and the professional classes. The Democrats' indifference to blue collar voters (except during even-numbered Novembers) is obvious from the party's policies on immigration and energy. Obama, in particular, is the candidate of well-off liberals.
But those Obama supporters aren't so well-off anymore. This inevitably will make them more sensitive to Obama's redistributionist tax policies.
The Tax Prof computes that the top marginal federal tax rate under Obama's tax plan will be 50%, and under McCain's, 40%. If you live in a state with an income tax and are a high income earner, most of your money will be going to taxes under an Obama administration.
My guess is that Obama supporters who have just seen their net worth decline by 30% or 40% won't be very interested in paying over half their incomes in taxes for the next four years. That would make it more difficult, and likely impossible, to rebuild the wealth that they have lost in the current collapse.
It's impossible to say how many Obama supporters will switch to McCain to avoid the tax burden that Obama promises, but one thing we can say for sure is that if Obama wins, there will be a lot of pressure on him from prosperous Democrats--his base--to renege on his promise to increase taxes on "the rich."
# posted by Joltin' Django @ Friday, October 10, 2008 
