Just picking nits here:
I think it's terribly funny, all this fuss about "Joe the Plumber". McCain was certainly right to jump on this, but it's this same damn debate about whether or not we should have taxes, who should pay them, race and class. Don't forget competence in government, wasteful spending, socialism, etc.
1) To Obama: You blew it from the beginning of your campaign. By accepting Hillary Clinton's definition of "middle class" (that is, $250,000), you've defined "middle class", "working families" and the like at 250K. That's the top 5% of income earning households! What the hell were you thinking?
2) To "Joe The Plumber": First, thanks for getting Obama to admit that he wants to "spread the wealth around." Redistribution is something Democrats don't really want to talk about. Second, guess what? If you're pulling down 250K in income (in Ohio!), you're definitely at the top 5% of income earners. Sorry, buddy, you're going to see your taxes go up.
Here's my point: I am not an economist, but I get the feeling that the US government's going to need a little cash in the next few years. I don't really know the area under the income distribution curve for the top 5%, but I get the feeling it's not enough. It's a crap sandwich, but better higher taxes on the "middle class" than government defaulting on its obligations, etc. I'd like to think it went to pay for debt service and tanks to scare 3rd world countries, but that's an argument for another time.
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It's also worth noting that the top 1% makes so much money that it's worth it to start sheltering their income by stashing it in the Caymans or starting foundations to fund chemists to cure malaria. So we're really talking about the AUC of the 98th through 95th percentile of income-earning households.
I'm just not convinced that raising taxes raises revenue. The revenue of the US gov remains relatively constant regardless of tax rate as it related to GDP.
I think the reason for this is that rich people can choose how to shelter their money and what to do with it within a very corrupt tax code. There is a reason accountants and tax attornys make good money.
We can argue all we want about either candidate, but the only way to increase revenue is to increase GDP.
I'm sending this from my phone. I'll attach a like to the chart when I get to a computer.
I'd add that it's usually the people like me who get screwed with tax increases. I make enough money to get noticed, but not enough to do any thing about it.
I realize you all think I'm complaining, but you spend $4 a gallon for gasoline, $8 a pound of deli turkey, $60k a year on a house, $1750 a month on daycare, $200 a month a diapers, $4 a bridge toll. Then drive around in a Honda Fit. You guessed it I'm rich.
http://www.heritage.org/research/features/BudgetChartBook/PDF/T1.pdf
You may be surprise to hear that I agree with both of you. However, you would also have to admit that lowering taxes on the wealthy americans does not guarantee an improved economy. We have seen this when we contrast the taxes paid and economy under the Clinton and Bush administration. Thus, McCain should not keep repeating don't tax anybody mantra even though a majority of americans disagree.
That said, if McCain would have started with this perspective, picked Romney or Lieberman as VP, and hammered Obama on taxes, the numbers would be very different now.
McCain's other problem in the debates is that Obama never allows him to be painted into a corner. McCain should not attack a penalty for not providing health insurance or increased taxes for small business if Obama can reply "they are exempt". McCain came across as most political attack ads, negative attack but basically, a distortion of context.
Finally, as a scientist, educator, and father, I have no problem with the government helping to pay for the Adler Planetarium which serves millions of visitors per year. Even the genomics of bears was a better choice.
BTW....Jim: Don't you believe that the $250K threshold was chosen based on the calculated revenue expected and not based some arbitrary number?
Rich, following Tung's postulate #3 (it is impossible to positively discern intent), I don't know how the Obama campaign chose this number.
The most thorough discussion that Obama has had is in the infamous ABC debate with Charlie Gibson, where they both made a pledge to not to raise taxes on households making less than 250k.
In it, you can see that Obama believes (as I do) that people/households making ~250k are certainly near the top of the income distribution. I have a difficult time seeing a household making 200K (to pick a round number) as being either "middle class" or "working families", whatever those terms mean.
I guess Obama chose those numbers because they're round and clearly above the median income.
I also think that there are probably more Obama voters in the 88 to 249K range than proportional. I read comments in liberal blogs that make defensive statements similar to Mike's. (Difference being, of course, that Mike doesn't want to raise anyone's taxes.) I'm also struck by the number of comments who expect Obama to do what Clinton did with his promised middle-class tax cut: blanche at the 'surprisingly large' deficit he'll suddenly discover and then say, never mind!
It may be the responsible thing to do.
I am more than a little sympathetic to Mike's plight, such as it is. He's right -- he's the one that's going to get screwed. I'd support a push towards destroying the tax code as currently written and wiping out H&R Block's market niche. But I can't imagine a scenario where that would be on the table (except under a President Huckabee.)
Another look at the statistics tells an even more absurd story: >250K is actually the top 1.5%. Wikipedia, "income at a glance" section
Just remember: if you're in the 97th percentile of your graduating class, Barack Obama thinks you're in the middle.
Jim, I reject your equivalence.
And I refer you to my earlier comments about cost of living being a necessary part of the equation when calculating "richness." For instance, Mike is not rich due to his location. The cost of living in San Franscico is inordinately higher than South Bend or Nashville. He is therefore justified in his concern, however wildly presented, that higher taxes will be detrimental to his takehome pay.
I also give Obama more credit for his intellectual chops. Somehow I doubt that he would use similar qualifers for richness and educational acheivement.
Bruce: Do you disagree that Obama has essentially made this claim in his commercials and speeches? ($249,999 per household = "middle class" or "working families")
Two small points:
1. ~200K means different things in different places. I would argue that it still puts you way, way above the median or even the 80th percentile of households.
2. The tax code does not adjust for cost of living, either. Are you suggesting that it should?
My larger point: I find it odd that Obama has chosen to sell tax cuts, especially for (working?) (middle class?)families making 150-249K.
Assuming it's bad/wrong, what do you blame? The greed of the American voter or Obama's desire to feed/quench that greed?
when Obama places those who make $249,999 in the "middle class" it in effect takes into account the cost of living for Mike, for instance. I'm not suggesting that the tax code be overhauled to compensate. It already takes these issues into account if you are precise in where a budget would cut taxes.
Percentile doesn't matter is my argument. If you target the tax relief to those who are most likely to go out and buy stuff with their new found money (ie the middle class) people/businesses make more more money and the economy strengthens.
I still think we're missing one key point.
Why tax income at all? In essence we are taxing work... We should be taxing people when they use govt. services.
More sales taxes, FDA surcharge, FAA surcharge... and so on. Then we catch everyone. No one can hide!!!
Mike: How will we charge the Defense Department's services? Or the State Department? (passport costs are going up! ;)
Bruce: If percentile doesn't matter, why does Obama keep emphasizing that he's cutting taxes for 95% of working Americans? The more I think about this, the more I'm convinced that 1) this is a free cash giveaway to his UMC supporters or 2) he's being somewhat disingenuous (he IS a politician, after all) and the tax cut will go away after he is shocked, shocked at the size of the latest budget deficit.
So Jim based on your rationale....since Obama's tax cut to the UMC is less than McCain's then McCain is actually giving a cash giveaway just to win votes. Or is it to create jobs and shrink government.
Both, I suppose. But here's the difference: Republicans actually believe in the stimulative/positive effect of tax cuts*. Democrats, somewhat less so -- until now, that is.
*Yes, yes, especially to the top 1%.
By "positive effects of cutting taxes...to the top 1%" I assume you mean, the GOP can get their votes and donations. Obama's defense is that the economy did just fine under Clinton when both capital gains and income taxes were higher.
No, Rich, I meant that GOPers actually believe in supply-side economics -- the positive political effects are a feature, to be sure. I mean, it makes some sense, right? Cut taxes to the 1% (whose income will actually go to new investments, etc.) Whether or not the numbers work out is an entirely different debate.
I think it's pretty clear that Obama's nailed down the 88-249K demographic. Why is he doing this, then?
Certain Nobel Prize winning economists believe supply side doesn't work. I think the current economic situation suggests that even the brightest economic minds are not able to predict the complicated network that affects the global economy.
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