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Thread: Tax Policy Center on Obama and McCain’s tax plan

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    Default Re: Tax Policy Center on Obama and McCain’s tax plan

    Speaking of taxes.....Isn't Sarah Palin supposed to be that fiscally conservative miracle worker?


    Of the 50 states, Alaska ranks No. 1 in taxes per resident and No. 1 in spending per resident. Its tax burden per resident is 2 1/2 times the national average; its spending, more than double. The trick is that Alaska's government spends money on its own citizens and taxes the rest of us to pay for it. Although Palin, like McCain, talks about liberating ourselves from dependence on foreign oil, there is no evidence that being dependent on Alaskan oil would be any more pleasant to the pocketbook.
    Alaska is, in essence, an adjunct member of OPEC. It has four different taxes on oil, which produce more than 89% of the state's unrestricted revenue. On average, three-quarters of the value of a barrel of oil is taken by the state government before that oil is permitted to leave the state. Alaska residents each get a yearly check for about $2,000 from oil revenues, plus an additional $1,200 pushed through by Palin last year to take advantage of rising oil prices. Any sympathy the governor of Alaska expresses for folks in the lower 48 who are suffering from high gas prices or can't afford to heat their homes is strictly crocodile tears.
    As if it couldn't support itself, Alaska also ranks No. 1, year after year, in money it sucks in from Washington. In 2005 (the most recent figures), according to the Tax Foundation, Alaska ranked 18th in federal taxes paid per resident ($5,434) but first in federal spending received per resident ($13,950). Its ratio of federal spending received to federal taxes paid ranks third among the 50 states, and in the absolute amount it receives from Washington over and above the amount it sends to Washington, Alaska ranks No. 1.
    View photos of Sarah Palin here.
    Under the state constitution, the governor of Alaska has unusually strong powers to shape the state budget. At the Republican National Convention, Palin bragged that she had vetoed "nearly $500 million" in state spending during her two years as governor. This amounts to less than 2% of the proposed budget. That's how much this warrior for you (the people) against it (the government) could find in wasteful spending under her control.
    One thing Barack Obama and McCain disagree on is an oil windfall–profits tax. McCain is against it, on the theory that it is a tax and therefore bad, and also that it would discourage domestic production. Obama is for it, on the theory that if oil companies can make a nice profit when oil sells for $50 per bbl., they can still make a nice profit when it sells for more than $100, even if the government takes a bit and spreads the money around to those who are hurting from higher oil prices.
    Although Palin's words side with McCain in this dispute, her actions side with Obama. Her major legislative accomplishment has been to revamp Alaska's windfall-profits tax in order to increase the state's take. Alaska calls it a "clear and equitable share" tax. The state assumes that extracting oil from the tundra costs about $25 per bbl. and takes as much as 75% of the difference between that and the sale price.
    Why is a windfall-profits tax good for Alaska but not for the U.S.? Well, it's obvious, isn't it? People in Alaska are better than people in the rest of the U.S. They're more American. Although there are small towns and farms and high school hockey teams in the lower 48, there are fewer down here, per capita, than in Alaska. And there are many more journalists and pollsters and city dwellers and other undesirables who might benefit if every American had the same right to leech off the government as do the good citizens of Sarah Palin's Alaska.

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    Veteran Member Zia_Abq's Avatar
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    Default Re: Tax Policy Center on Obama and McCain’s tax plan

    Original message removed. See my siggy for details on why.
    Last edited by Zia_Abq; 09-14-2008 at 04:51 PM.
    I am not interested in endless arguments or debate. I visit message boards to interact and share with likeminded people.

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    Default Re: Tax Policy Center on Obama and McCain’s tax plan

    ^^^
    Your siggy:

    "I am not interested in endless arguments or debate. I visit message boards to interact and share with likeminded people"

    could be interpreted to mean " I don't want to debate because I can't logically support my positions to people who disagree with me".
    "never trust a big butt and a smile"-- Bell Biv DeVoe

    If you're in your twenties and aren't a liberal, you have no heart. If you're in you're forties and aren't a conservative, you have no brain - Winston Churchill

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    Default Re: Tax Policy Center on Obama and McCain’s tax plan

    Hard Numbers on Obama’s Redistribution Plan

    (snip)
    The top 1 percent of taxpayers would see a tax hike of $131 billion while the other groups would see a tax cut of $155 billion. Presumably, the residual tax cut of $24 billion would be deficit financed.
    (end)

    These numbers don't include the hike in payroll taxes or the capital gains tax increase. I think the questions they raise at the end are telling

    (snip)
    While many Americans may cheer this outcome as just or equitable, this sort of direct redistribution raises some important questions that should be part of a larger national discussion:

    What is the long-term effect on the economy of so few households shouldering such a large share of the tax burden?

    What are the consequences for our democratic system when a majority of Americans are disconnected from the full cost of government? Will that majority demand more from the government because they bear little of the cost?

    Should the tax system be used as a means of redistributing income or simply as a neutral mechanism for raising money for government services? Can a tax system premised on redistribution also be compatible with economic growth?

    The Obama plan assumes little behavioral change from such a large tax hike on high-income workers. Is this realistic or will the higher rates encourage tax minimization strategies and reduced work effort, which will lead to lower tax revenues?
    (end)

    Bread and circuses people. Be careful what you wish for.

    As far as the effect on the economy, Sen Obama has acknowledged that it would hurt the economy

    (snip)
    Democrat Barack Obama says he would delay rescinding President Bush's tax cuts on wealthy Americans if he becomes the next president and the economy is in a recession, suggesting such an increase would further hurt the economy.
    (end)
    Bearing the gifts beyond price, almost free

  5. #30
    Banned Eric Stoner's Avatar
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    Default Re: Tax Policy Center on Obama and McCain’s tax plan

    In light of the recent Wall Street shakeup, all bets are off for BOTH McCain AND Obama's tax plans. It will probably NOT be a good time for either tax cuts or tax increases.

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    Default Re: Tax Policy Center on Obama and McCain’s tax plan

    ^^^ if elected, Obama won't have any choice but to raise taxes. After all, he has promised some 40% of Americans ... i.e. those that earn less than $30k per year and don't actually pay taxes now .. that they will be getting a larger 'handout' from the government till in the form of refundable tax credits if they vote for Obama. Reneging on this promise would cause UNBELIEVABLE backlash against all Democrats by this group of US voters.

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    Featured Member Miss_Luscious's Avatar
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    Default Re: Tax Policy Center on Obama and McCain’s tax plan

    Why don't people who make less than 30k pay taxes? I mean, taxes get taken out and not everything comes back with a tax return. Are you implying that us lowly middle class people are freeloaders?
    "A stupid man's report of what a clever man says is never accurate because he unconsciously translates what he hears into something he can understand." - Bertrand Russell

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    Quote Originally Posted by Katrine View Post
    Ya'll bitches need to calm down. Cerously.
    In other words: Boo-motherfucking-hoo

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    Default Re: Tax Policy Center on Obama and McCain’s tax plan

    Most everyone pays state sales tax at the check out counter. And excisee taxes at the pump when buying gasoline. And presumably FICA and Medicare taxes at their job. I believe Mel was referring to FIT and SIT.

    FBR
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    Default Re: Tax Policy Center on Obama and McCain’s tax plan

    Oh, ok. I thought maybe I was a dirty, no good, non tax paying freeloader. It's good to know that I'm not. I like the way you put it FBR. I feel much better about myself and my family.
    "A stupid man's report of what a clever man says is never accurate because he unconsciously translates what he hears into something he can understand." - Bertrand Russell

    "It's just a matter of people having low self esteem and being way too easily offended." -Random Guy on a Internet Forum

    Quote Originally Posted by Katrine View Post
    Ya'll bitches need to calm down. Cerously.
    In other words: Boo-motherfucking-hoo

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    Default Re: Tax Policy Center on Obama and McCain’s tax plan

    Why don't people who make less than 30k pay taxes? I mean, taxes get taken out and not everything comes back with a tax return
    Obviously people who make less than 30k per year pay taxes. If a state or city has a sales tax, everybody pays that tax regardless of income. But none of that state tax revenue goes towards funding federal programs. Everybody also pays 18 cents per gallon federal gasoline tax, but none of that gas tax revenue goes towards funding federal programs other than roads / transportation.

    Everybody also pays Social Security / medicare taxes. In theory, the Social Security and medicare taxes paid by everyone were supposed to be segregated such that revenue from those taxes would only be used to pay Social Security and medicare benefits. The US congress has played some accounting games with this SSI money i.e. congress 'borrowing' from the Social Security and medicare revenue funds, issuing special bonds to the Social Security administration in exchange for the borrowed money, thus an implied promise that the money will be repaid from general federal tax revenues in the future.

    However, with the above exception aside, federal funds for every program from medicaid to the US military to education to subsidized mortgages for low income homeowners to alternative energy to the FBI to FEMA to homeland security must be paid for by federal INCOME taxes. People earning less than $30,000 for the most part do NOT have to pay income taxes, because the IRS exemptions, tax credits etc. cancel out 100% of their federal income tax liability.

    What Obama is proposing is additional 'refundable' tax credits which would pay back a greater amount of federal income tax money to low income Americans than the amount of federal income tax they paid in the first place. Ultimately, this 'transfer' of wealth must come from two sources ... it must come out of the contributions the low income Americans are making to their own Social Security and medicare benefits, or it must come out of the pocket of another American whose higher earnings cause them to actually have to pay federal income taxes.

    So from the standpoint of you comment about people earning less than $30k per year being 'freeloaders' ... well ... because these people pay zero federal income tax they are contributing ZERO to such programs as medicaid, the US military, alternative energy, low income housing loans, college grants and subsidized loans, homeland security, FEMA, and a host of other federal programs they benefit from ... draw your own conclusion !


    The Obama plan assumes little behavioral change from such a large tax hike on high-income workers. Is this realistic or will the higher rates encourage tax minimization strategies and reduced work effort, which will lead to lower tax revenues?
    Based on historical example, the obvious answer is that tax minimization strategies and reduced work effort will definitely result from an increase in the 'official' US income tax and capital gains tax rates. Of course the Democrats are actually counting on this happening, and are actually providing convenient places for the uber-rich to invest their money in a tax favored manor. Obviously tax free municipal bonds are already growing in popularity. But much more popular for the uber-rich are investments in industries for which the US gov't provides 'production tax credits' i.e. ethanol / solar / wind ... i.e. a rich investor can buy into a wind farm partnership for $1,000,000 and in turn receive $100,000 per year in 'production tax credits' as a result of wind energy production which then will offset that investor's other federal tax liabilities on a dollar for dollar basis. Most recently there is also the issue of 'paper losses' i.e. investors in 'failed' financial institutions will reap the tax benefits of applying past years losses ( which they didn't personally experience since they bought the company AFTER losses had been booked) against future years corporate income taxes. The uber-rich also have other tax minimization options available i.e. exercising stock options in foreign countries, investing 'anonymously' in foreign hedge funds, and a host of others.

    I'll throw out one tidbit to think about ... why do you think that Obama had no problem attracting a full house of $28,500 per plate political supporters at the Beverly Wilshire in Hollywood last night ? The unpublicized reason is that all of the uber-rich know that while the 'official' income tax rate may be raised for the sake of mainstream media publication and political mileage, the REAL WORLD tax rate they actually pay probably won't increase at all. And if the real world tax rate does actually rise in the future, they have options to avoid the effects of the increase. Of course, those options are generally negative for economic growth / creation of new jobs etc.
    ~
    Last edited by Melonie; 09-17-2008 at 04:00 AM.

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