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Barack Obama on Tax Reform

Democratic incumbent President; IL Senator (2004-2008)


Tax cuts won't help us compete with China; invest instead

In order for us to be competitive, we're going to have to make some smart choices right now. Cutting our education budget--that's not a smart choice. That will not help us compete with China. Cutting our investments in research and technology--that's not a smart choice. That will not help us compete with China. Adding $7 trillion of tax cuts and military spending that our military's not asking for before we even get to the debt that we currently have--that is not going to make us more competitive. Those are the kinds of choices that the American people face right now. Having a tax code that rewards companies that are shipping jobs overseas instead of companies that are investing here in the US--that will not make us more competitive. After a decade in which we saw drift, jobs being shipped overseas, nobody championing American workers and American businesses, we've now begun to make some real progress. We can't go back to the same policies that got us into such difficulty in the first place.
Source: Third Obama-Romney 2012 Presidential debate , Oct 22, 2012

I've cut taxes for middle-class families & small businesses

I want to give middle-class families and folks who are striving to get into the middle-class some relief. Because they have been hit hard over the last decade. Over the last 15, over the last 20 years. So four years ago I stood on a stage just like this one. Actually it was a town hall, and I said I would cut taxes for middle-class families, and that's what I've done, by $3,600.00. I said I would cut taxes for small businesses, who are the drivers and engines of growth. And we've cut them 18 times.
Source: Second Obama-Romney 2012 debate , Oct 16, 2012

We need a tax code where everybody pays their fair share

I'm well aware that there are many Republicans who don't believe we should raise taxes on those who are most fortunate and can best afford it. But here is what every American knows. While most people in this country struggle to make ends meet, a few of the most affluent citizens and corporations enjoy tax breaks and loopholes that nobody else gets. Right now, Warren Buffet pays a lower tax rate than his secretary--an outrage he has asked us to fix. We need a tax code where everyone gets a fair shake, and everybody pays their fair share.

I'll also offer ideas to reform a corporate tax code that stands as a monument to special interest influence in Washington. By eliminating pages of loopholes and deductions, we can lower one of the highest corporate tax rates in the world. Our tax code shouldn't give an advantage to companies that can afford the best-connected lobbyists. It should give an advantage to companies that invest and create jobs here in America.

Source: Pres. Obama's 2011 Jobs Speech , Sep 8, 2011

We cut taxes 25 times, for 95% of Americans

We passed 25 different tax cuts. Now, let me repeat: We cut taxes. We cut taxes for 95% of working families. We cut taxes for small businesses. We cut taxes for first-time homebuyers. We cut taxes for parents trying to care for their children. We cut taxes for 8 million Americans paying for college.

As a result, millions of Americans had more to spend on gas and food and other necessities, all of which helped businesses keep more workers. And we haven't raised income taxes by a single dime on a single person. Not a single dime.

Because of the steps we took, there are about two million Americans working right now who would otherwise be unemployed. And we're on track to add another one and a half million jobs to this total by the end of the year.

The plan that has made all of this possible, from the tax cuts to the jobs, is the Recovery Act, also known as the stimulus bill. Economists on the left and the right say this bill has helped save jobs and avert disaster.

Source: 2010 State of the Union Address , Jan 27, 2010

FactCheck: Tax cut only helps 75% or workers, not 95%

Obama said his stimulus program provides a tax cut for "95% of working households" and later said that a cut would go to 95% of "working families." That calls for some explanation. The key words are "working" and "cut."

He's referring to the "making work pay" refundable tax credit, which is only available to workers. There would be no credit for retirees or those who are unemployed; a more modest 75.5% of all households would benefit, whether their members are working or not.

It is also questionable whether all of the tax refunds can properly be called "tax cuts." The credit is refundable and, therefore, is going to many who earn so little that they pay no federal income taxes in the first place. The White House calls them tax cuts, but the nonpartisan Congressional Budget Office officially scores the bill's refundable credits under "direct spending."

Source: FactCheck.org on 2009 State of the Union address , Feb 24, 2009

Yes, earmarks are abused, but small compared to tax cuts

McCAIN: Earmarking [is like a] “gateway drug” because it’s a gateway to out-of-control spending & corruption.

OBAMA: McCain is absolutely right that the earmarks process has been abused, which is why I suspended any requests for my home state, whether it was for senior centers or what have you, until we cleaned it up. He’s also right that oftentimes lobbyists and special interests are the ones that are introducing these kinds of requests, although that wasn’t the case with me. Let’s be clear: earmarks account for $18 billion in last year’s budget. McCain is proposing $300 billion in tax cuts to some of the wealthiest corporations & individuals in the country. Now $18 billion is important; but $300 billion is really important. In his tax plan, you woul have CEOs of Fortune 500 companies getting an average of $700,000 in reduced taxes, while leaving 100 million Americans out. So my attitude is we’ve got to grow the economy from the bottom up. What I’ve called for is a tax cut for 95% of working families

Source: 2008 first presidential debate, Obama vs. McCain , Sep 26, 2008

Trickle-down economics has failed

While Democrats have long been intimidated by the "tax-and-spend" label, most have now accepted the need to restore taxes on the top brackets. Obama and his chief rival, Hillary Clinton, both campaigned on a platform to raise taxes on people with annual earnings of at least $250,000, roughly the wealthiest 2% of Americans. Both pledged to reclaim at least some inheritance taxes on very large estates.

Obama's own proposals to date have sometimes mocked his bold rhetoric. On July 7 Obama delivered a speech titled, "An Agenda for Middle Class Success." He began by describing the Republican philosophy: "Give massive tax breaks to big corporations and multimillionaires and hope that prosperity trickles down to everyone else. Sacrifice investments in health care and education and energy and technology to pay for these tax breaks, and borrow the rest from countries like China, leaving our children to foot the bill." And he added, "Well, it's painfully clear by now how badly this strategy has failed."

Source: Obama`s Challenge, by Robert Kuttner, p. 24-25 , Aug 25, 2008

Adjust capital gains tax up to where Reagan set it

On September 18, 2007, when Obama laid out his tax fairness plan for the middle class, he proposed adjusting the capital gains rate "to something closer to--but no greater than--the rates Ronald Reagan set in 1986."

The problem is that the capital gains rate has dropped since the days of Ronald Reagan. Stated less rhetorically and more straightforwardly, Obama was proposing to RAISE the long-term capital gains tax from 15 percent to 28 percent, nearly doubling it.

Source: Obama Nation, by Jerome Corsi, p.244 , Aug 1, 2008

Tax cut for middle class and relief to struggling homeowners

Washington should not benefit the special interests at the expense of ordinary Americans; and that we’re rewarding not just wealth, but the work and workers who create it. That’s why I’ll offer a middle class tax cut so we can lift up hardworking families, and give relief to struggling homeowners so we can end our housing crisis, and provide training to young people to work the green jobs of the future, and invest in our infrastructure so we can create millions of new jobs.
Source: McCain-Obama speeches at 99th NAACP Convention , Jul 12, 2008

Expand the Earned Income Tax Credit

We have to fight for all those young men standing on street corners with little hope for the future besides ending up in jail. We have to break the cycle of poverty and violence that’s gripping too many neighborhoods in this country. That’s why I’ll expand the Earned Income Tax Credit--because it’s one of the most successful anti-poverty measures we have.
Source: McCain-Obama speeches at 99th NAACP Convention , Jul 12, 2008

Maintain the inheritance tax on wealthy

Obama's plan to improve economic opportunity for all is fourfold. He wants to maintain an inheritance tax on our wealthiest citizens that others have fought to end; he wishes to introduce universal preschool education to give poorer children the same opportunities as their richer classmates; he wants to improve our public education system and encourage college education for all; and he wants to make sure that all artificial barriers to personal advancement are eliminated in the workplace.

Obama has realized that it is impossible if a society bases all privilege and opportunity primarily on the wealth of one's parents. What Obama finds most disturbing about the inheritance tax debate is that the most important implication of allowing large inheritances is that it will indeed create a society based on inherited wealth privilege and opportunity. He believes that we will again become what we broke away from, an indentured people to a privileged class.

Source: Obamanomics, by John R. Talbott, p. 56-57 , Jul 1, 2008

Middle class tax cut helps offset rising cost of gas & food

These are challenging times. That’s why I spent last week talking about immediate steps we need to take to provide working Americans with relief. A broad-based, middle class tax cut, to help offset the rising cost of gas and food. A foreclosure prevention fund, to help stabilize the housing market. A health care plan that lowers costs and gives those without health insurance the same kind of coverage members of Congress have. A commitment to retirement security that stabilizes Social Security, and provides workers a means to increase savings. And a plan to crack down on unfair and sometimes deceptive lending in the credit card and housing markets, to help families climb out of crippling debt, and stay out of debt in the first place.

These steps are all paid for, and designed to restore balance and fairness to the American economy after years of Bush Administration policies that tilted the playing field in favor of the wealthy and the well-connected.

Source: Speech in Flint, MI, in Change We Can Believe In, p.244 , Jun 15, 2008

Under Bill Clinton, rich people didn’t feel oppressed

Q: Is McCain going to go after you as another classic liberal tax and spender?

A: Well, I’m going to go right back at McCain, because look at his tax proposals. He not only wants to continue some of the Bush tax cuts for the wealthiest Americans and corporations, he actually wants to extend them, and he hasn’t told us really how he’s going to pay for them. It is irresponsible. And the irony is he said it was irresponsible. When George Bush initiated these tax cuts in 2001, McCain said, “This is shameful.“ He said that it offended his conscience, he said, for us to give tax breaks to the wealthy, particularly at a time of war. If you look at my approach to taxation, what have I said? I said I would cut taxes for people making $75,000 a year or less. I’d cut taxes for seniors who are making $50,000 a year or less. It is true that I would roll back the Bush tax cuts on the wealthiest Americans back to the level they were under Bill Clinton, when I don’t remember rich people feeling oppressed.

Source: 2008 Fox News interview: presidential series , Apr 27, 2008

Stimulus package: $500 tax cut, & Social Security supplement

Q: How much money would your stimulus plan put in the pockets of the average citizen?

A: It is absolutely critical right now to give a stimulus to the economy. We’ve got to get tax cuts into the pockets of hard-working Americans right away. And it is important for us to make sure that they are not just going to the wealthy. They should be going to folks who are making $75,000 a year or less, and they should be going to folks who only pay payroll tax, but typically are not paying income tax.

Q: Do you agree with Sen. Clinton that $650 is a good number for a tax rebate?

A: Well, I think that we are going to have to get some immediate money. What I say is, $500 for a tax rebate per typical family. But also, for senior citizens, a supplement to their Social Security check, because they get that every month. That would provide seniors all across the country right away some money to help pay for their heating bills and other expenses that they’ve got right now.

Source: 2008 Congressional Black Caucus Democratic debate , Jan 21, 2008

Restore progressive tax; close loopholes; relief to seniors

There has to be a restoration of balance in our tax code. We are going to offset some of the payroll taxes that families who are making less than $50,000 a year get a larger break. I want to make sure that seniors making less than $50,000, that they get some relief in terms of the taxes on their Social Security. Those kinds of progressive tax steps, while closing loopholes and rolling back the Bush tax cuts to the top 1 percent, simply restores some fairness and a sense that we’re all in this together.
Source: 2007 Democratic debate at Drexel University , Oct 30, 2007

Tax incentives to create jobs at home instead of offshore

Obama today said companies creating jobs in America should be rewarded with tax cuts rather than giving tax incentives to companies that move jobs offshore. “Right now, we have a tax code that gives incentives for companies to move offshore. Instead, we must have a tax code that rewards companies that are doing the right thing by investing in American workers and investing in research and development here in the United States,” said Obama. “Our government has to be looking out for these people who are working hard everyday trying to make ends meet and right now we’ve got a set of policies that are not reflective of that.“ Obama’s plan to create quality jobs in Illinois will:
Source: Press Release, “Creating Jobs in America” , Jun 21, 2004

Last thing we need now is a permanent tax cut

We heard the President say he wants to make tax cuts for the wealthiest Americans permanent, when we know that at a time of war and economic hardship, the last thing we need is a permanent tax cut for Americans who don’t need them and weren’t even asking for them. What we need is a middle class tax cut, and that’s exactly what I will provide as President.
Source: Response to 2008 State of the Union address , Jan 28, 2008


Barack Obama on Taxing the Wealthy

Bring back the Clinton tax rate for income above $250,000

Your first $250,000.00 worth of income, no change. For 98% of families, 97% of small businesses, they will not see a tax increase. I'm ready to sign that bill now. The only reason it's not happening is because Romney's allies in Congress have held the 98 percent hostage because they want tax breaks for the top 2%. For above $250,000, we can go back to the tax rates we had when Clinton was president. We created 23 million new jobs. That's part of what took us from deficits to surplus.
Source: Second Obama-Romney 2012 debate , Oct 16, 2012

It's unfair for a nurse to pay a higher tax rate than Romney

Romney was asked: Is it fair for somebody like you, making $20 million a year, to pay a lower tax rate than a nurse or a bus driver, making $50,000 year? He said, "Yes, I think that's fair." Not only that, "I think that's what grows the economy." I think what grows the economy is when you get that tax credit that we put in place for your kids going to college. I think what grows the economy is when we make sure small businesses are getting a tax credit for hiring veterans who fought for our country.
Source: Second Obama-Romney 2012 debate , Oct 16, 2012

47% who don't pay income tax pay many other taxes

Q: Romney claims that 47% of the population pays no taxes. Your comment?

A: Are there people who abuse the system? Yes, both at the bottom and at the top--because there are a whole bunch of millionaires who aren't paying taxes at all either. But when you look statistically, it turns out that even if people aren't paying income taxes, they're paying payroll taxes. They're paying gas taxes. They're paying sales taxes. They're paying state & local taxes. So the fact of the matter is that the few people who are not paying income taxes are either paying a lot of taxes because they're working every day but they just don't make enough money overall to pay income tax; or alternatively, they're senior citizens or they're students or they're disabled; or, in some cases, they're veterans or soldiers who are fighting for us right now overseas--they don't pay an income tax. Americans work hard, and if they're not working right now, they want to get to work. And that's what my economic plan is designed to do.

Source: Obama-Romney interviews by Univision Noticias (Spanish News) , Sep 19, 2012

No tax breaks for millionaires; GOP always wants tax cuts

Our friends down at the Republican convention were more than happy to talk about everything they think is wrong with America, but they didn't have much to say about how they'd make it right.

They want your vote, but they don't want you to know their plan. And that's because all they had to offer is the same prescription they've had for the last 30 years:

"Have a surplus? Try a tax cut."

"Deficit too high? Try another."

"Feel a cold coming on? Take two tax cuts, roll back some regulations, and call us in the morning."

Now, I've cut taxes for those who need it, middle-class families, small businesses. But I don't believe that another round of tax breaks for millionaires will bring good jobs to our shores, or pay down our deficit. I don't believe that rolling back regulations on Wall Street will help the small businesswoman expand, or the laid-off construction worker keep his home. We have been there, we've tried that, and we're not going back. We are moving forward.

Source: 2012 Democratic National Convention speech , Sep 6, 2012

Buffett rule: millionaires pay minimum of 30% in taxes

When it comes to the deficit, we've already agreed to more than $2 trillion in cuts and savings. But we need to do more, and that means making choices. Right now, we're poised to spend nearly $1 trillion more on what was supposed to be a temporary tax break for the wealthiest 2% of Americans. Right now, because of loopholes and shelters in the tax code, a quarter of all millionaires pay lower tax rates than millions of middle-class households. Right now, Warren Buffett pays a lower tax rate than his secretary.

Do we want to keep these tax cuts for the wealthiest Americans? Or do we want to keep our investments in everything else? Because if we're serious about paying down our debt, we can't do both.

Tax reform should follow the Buffett rule: If you make more than $1 million a year, you should not pay less than 30% in taxes, and you shouldn't get special tax subsidies or deductions. On the other hand, if you make under $250,000 a year, like 98% of American families, your taxes shouldn't go up.

Source: 2012 State of the Union speech , Jan 24, 2012

No across-the-board tax cuts for the wealthy

Rep. PENCE: Republicans offered a stimulus bill that essentially was across-the-board tax relief. Would you be willing to consider embracing the kind of across-the-board tax relief that President Kennedy advocated, that President Reagan advocated and tha has always been the means of stimulating broad-based economic growth?

Pres. OBAMA: I'm going to take a look at what you guys are proposing. What you may consider across-the-board tax cuts could be, for example, greater tax cuts for people who are makin a billion dollars. I may not agree to a tax cut for Warren Buffett. You may be calling for an across-the-board tax cut for the banking industry right now. I may not agree to that. If you're calling for just across-the-board tax cuts, and then on the other hand saying that we're somehow going to balance our budget, I'm going to want to take a look at your math and see how that works, because the issue of deficit and debt is another area where there has been a tendency for some inconsistent statements.

Source: Obama Q&A at 2010 House Republican retreat in Baltimore , Jan 29, 2010

Tax cuts for wealthy got us into the current deficit

To help working families, we'll extend our middle-class tax cuts. But at a time of record deficits, we will not continue tax cuts for oil companies, for investment fund managers, and for those making over $250,000 a year. We just can't afford it.

From some on the right, I expect we'll hear a different argument--that if we just make fewer investments in our people, extend tax cuts including those for the wealthier Americans, eliminate more regulations, maintain the status quo on health care, our deficits will go away. The problem is that's what we did for eight years.

That's what helped us into this crisis. It's what helped lead to these deficits. We can't do it again.

Source: 2010 State of the Union Address , Jan 27, 2010

No $300 billion on tax cuts for those who don’t need them

Q: Are you willing to acknowledge that this financial crisis is going to affect the way you rule the country, as president?

A: There is no doubt that it’s going to affect our budgets. There is no doubt about it. Even if we get all $700 billion back, let’s assume the markets recover; we’re holding assets long enough that eventually taxpayers get it back. In the short term, there’s an outlay. We may not see that money for a while. Because the economy is slowing down, we can also expect less tax revenue. So there’s no doubt that as president, I’m going to have to make some tough decisions. We’ve got to know what our values are and who we’re fighting for and what our priorities are. If we are spending $300 billion on tax cuts for people who don’t need them and weren’t even asking for them and we are leaving out health care, which is crushing on people all across the country, then we have made a bad decision, and I want to make sure we’re not shortchanging our long-term priorities.

Source: 2008 first presidential debate, Obama vs. McCain , Sep 26, 2008

Tax cut for 95% of all working families, not corporations

Change means a tax code that rewards the American workers and small businesses who deserve it. I will stop giving tax breaks to corporations that ship jobs overseas, and start giving them to those that create jobs in America. I will eliminate capital gains taxes for the small businesses that create the high-wage, high-tech jobs of tomorrow. I will cut taxes--cut taxes--for 95% of all working families. In an economy like this, the last thing we should do is raising taxes on the middle-class.
Source: Speech at 2008 Democratic National Convention , Aug 27, 2008

I will raise CEO taxes, no doubt about it

Q: McCain is going to say you’re going to raise taxes.

A: I will raise CEO taxes. There is no doubt about it.

Q: What about the average American?

A: If you are a CEO in this country, you will probably pay more taxes. They won’t be prohibitively high. You’re going to be paying roughly what you paid in the ‘90s, when CEOs were doing just fine.

Q: So, you want to just eliminate the Bush tax cuts?

A: I want to eliminate the Bush tax cuts. And what I have said is, I will institute a middle-class tax cut. So, if you’re making $75,000, if you’re making $50,000 a year, you will see an extra $1,000 a year offsetting on your payroll tax.

Q: Define middle class.

A: Well, look, I think that the definitions are always a little bit rough, but if you’re making $100,000 a year or less, then you’re pretty solidly middle class, and you deserve relief right now, as opposed to paying higher taxes. But people who are making over $200,000 or $250,000 have benefited the most from economic growth.

Source: CNN Late Edition: 2008 presidential series with Wolf Blitzer , May 11, 2008

No tax increase if earning under $250K; tax cuts under $75K

Q: Can you make an absolute, read-my-lips pledge that there will be no tax increases of any kind for anyone earning under $200,000 a year?

CLINTON: I will let the taxes on people making more than $250,000 a year go back to the rates that they were paying in the 1990s.

Q: Senator Obama, would you take the same pledge? No tax increases on people under $250,000?

OBAMA: I not only have pledged not to raise their taxes, I’ve been the first candidate in this race to specifically say I would cut their taxes. We are going to offset the payroll tax, the most regressive of our taxes, so that families who are middle-income individuals making $75,000 a year or less, that they would get a tax break so that families would see up to $1,000 worth of relief.

Q: You both have now just taken this pledge on people under $250,000 and $200,000.

OBAMA: Well, it depends on how you calculate it. But it would be between $200,000 and $250,000.

Source: 2008 Philadelphia primary debate, on eve of PA primary , Apr 16, 2008

Raise capital gains tax for fairness, not for revenue

Q: You favor an increase in the capital gains tax, saying, “I certainly would not go above what existed under Bill Clinton, which was 28%.” It’s now 15%. That’s almost a doubling if you went to 28%. Bill Clinton dropped the capital gains tax to 20%, then George Bush has taken it down to 15%. And in each instance, when the rate dropped, revenues from the tax increased. And in the 1980s, when the tax was increased to 28%, the revenues went down.

A: What I’ve said is that I would look at raising the capital gains tax for purposes of fairness. The top 50 hedge fund managers made $29 billion last year--$29 billion for 50 individuals. Those who are able to work the stock market and amass huge fortunes on capital gains are paying a lower tax rate than their secretaries. That’s not fair.

Q: But history shows that when you drop the capital gains tax, the revenues go up.

A: Well, that might happen or it might not. It depends on what’s happening on Wall Street and how business is going.

Source: 2008 Philadelphia primary debate, on eve of PA primary , Apr 16, 2008

I’m not bashful about it: wealthy will pay more taxes

Q: If either one of you become president, and let the Bush tax cuts lapse, there will be effectively tax increases on millions of Americans.

OBAMA: On wealthy Americans.

CLINTON: That’s right.

OBAMA: I’m not bashful about it.

CLINTON: Absolutely

OBAMA: I suspect a lot of this crowd--it looks like a pretty well-dressed crowd--potentially will pay a little bit more. I will pay a little bit more. But that investment will pay huge dividends over the long term, and the place where it will pay the biggest dividends is in Medicare and Medicaid. Because if we can get a healthier population, that is the only way over the long term that we can actually control that spending that is going to break the federal budget.

CLINTON: It’s just really important to underscore here that we will go back to the tax rates we had before George Bush became president. And my memory is, people did really well during that time period. And they will keep doing really well.

Source: 2008 Democratic debate in Los Angeles before Super Tuesday , Jan 30, 2008

Trillion dollar giveaway: the Paris Hilton Tax Break

Obama said, “Domestically, our national debt and budget constrain us in ways that are going to be very far-reaching. And I think whoever is elected in 2008 is going to be cleaning up the fiscal mess that was created as a consequence of the president’s tax cuts.” Obama opposed repealing the estate tax: “Let’s call this trillion dollar giveaway what it is--the Paris Hilton Tax Break. It’s about giving billions of dollars to billionaire heirs and heiresses as a time when American taxpayers just can’t afford it.“ Obama has proposed to ”reverse some of those tax cuts that went to the wealthiest Americans.“ As Obama put it, ”It’s not as if rich people were suffering under Bill Clinton.“
Source: The Improbable Quest, by John K. Wilson, p.155 , Oct 30, 2007

Reduce Bush tax cuts to pay for health care & other programs

Q: Do you agree that the rich aren’t paying their fair share of taxes?

A: There’s no doubt that the tax system has been skewed. And the Bush tax cuts--people didn’t need them, and they weren’t even asking for them, and that’s why they need to be less, so that we can pay for universal health care and other initiatives.

But I think this goes to a broader question, and that is, are we willing to make the investments in genuine equal opportunity in this country? People aren’t looking for charity. We talk about welfare and we talk about poverty, but what people really want is fairness. They want people paying their fair share of taxes. They want that money allocated fairly.

One of the distressing things about Katrina was the fact that we have not made systematic investments. And the only way we’re going to make it is by making sure that those of us who are fortunate enough to have the money actually make a contribution.

Source: 2007 Democratic Primary Debate at Howard University , Jun 28, 2007

Estate tax only affects the wealthiest 1/2 of 1%

We have to stop pretending that all cuts are equivalent or that all tax increases are the same. Ending corporate subsidies is one thing; reducing health-care benefits to poor children is something else. At a time when ordinary families are feeling hit from all sides, the impulse to keep their taxes as low as possible is honorable. What is less honorable is the willingness of the rich to ride this anti-tax sentiment for their own purposes.

Nowhere has this confusion been more evident than in the debate surrounding the proposed repeal of the estate tax. As currently structured, a husband and wife can pass on $4 million without paying any estate tax. In 2009, this figure goes up to $7 million. The tax thus affects only the wealthiest one-third of 1% in 2009. Repealing the estate tax would cost $1 trillion, and it would be hard to find a tax cut that was less responsive to the needs of ordinary Americans or the long-term interests of the country.

Source: The Audacity of Hope, by Barack Obama, p.191-192 , Oct 1, 2006

Bush tax cuts help corporations but not middle class

Middle class families are getting squeezed. The new jobs being created in Illinois pay an average of $15,000 less than the jobs that we’ve lost - and fewer offer real benefits. Health insurance premiums and the cost of a college education have skyrocketed since the beginning of the Bush Administration. In the past three years, corporate profits have increased more than 60%. Workers are being paid just 3% more.

It wouldn’t be fair or accurate to blame all of this on the Bush Administration. It is fair, however, to say that they haven’t done much to help. The tax cuts they’ve offered have barely made a dent in reducing the burden on middle class families, while driving our nation trillions of dollars deeper into debt. They continue to support tax breaks for corporations who export jobs overseas, and have refused to enforce provisions within existing trade agreements against countries who engage in unfair trade practices.

Source: Press Release, “Middle Class Being Squeezed” , Jun 26, 2004


Barack Obama on Voting Record

FactCheck: Voted for non-binding tax increase on $42K income

McCain said--and Obama denied--that Obama had voted to increase taxes on “people who make as low as $42,000 a year.” McCain was correct--with qualification.

Yes, as we’ve said before, Obama did in fact vote for a budget resolution that called for highe federal income tax rates on a single, non-homeowner who earned as little as $42,000 per year. A couple filing jointly, however, would have had to earn at least $83,000 per year to be affected. A family of four with income up to $90,000 would not have been affected.

The resolution actually would not have altered taxes without additional legislation. It called generally for allowing most of the 2001 and 2003 Bush tax cuts to expire. McCain is referring to the provision that would have allowed the 25% tax bracket to return to 28%. The tax plan Obama now proposes, however, would not raise the rate on that tax bracket.

Source: FactCheck.org on 2008 first Presidential debate , Sep 26, 2008

GovWatch: didn’t vote to raise taxes 94 times; at most 54

The McCain campaign and the Republican National Committee both claim that Obama has voted 94 times “for higher taxes.” We find that their count is padded. After looking at every one of the 94 votes that the RNC includes in its tally, we find:The McCain campaign and the GOP falsely imply that Obama has pushed indiscriminately to raise taxes for nearly everybody. A closer look reveals that he’s voted consistently to restore higher tax rates on upper-income taxpayers but not on middle- or low-income workers. In the end, we listed votes on 54 measures under the “for higher taxes” category, and another seven votes in favor of lowering some taxes and increasing others.
Source: GovWatch on 2008: Washington Post analysis , Jul 3, 2008

Voted YES on increasing tax rate for people earning over $1 million.

CONGRESSIONAL SUMMARY: To put children ahead of millionaires and billionaires by restoring the pre-2001 top income tax rate for people earning over $1 million, and use this revenue to invest in LIHEAP; IDEA; Head Start; Child Care; nutrition; school construction and deficit reduction.

SUPPORTER'S ARGUMENT FOR VOTING YES:Sen. SANDERS: The wealthiest people in the country have not had it so good since the 1920s. Their incomes are soaring, while at the same time the middle class is shrinking, and we have by far the highest rate of childhood poverty of any major country. The time is now to begin changing our national priorities and moving this country in a different direction.

This amendment restores the top income tax bracket for households earning more than $1 million a year, it raises $32.5 billion over 3 years, and invests that in our kids, including $10 billion for special education. OPPONENT'S ARGUMENT FOR VOTING NO:Sen. KYL: The problem is we are spending the same dollar 3 or 4 times, it appears. The Sanders amendment is paid for by raising taxes another $32.5 billion, ostensibly from the rich; that is to say, by raising taxes on people who make over $1 million a year. Here is the problem with that. The budget on the floor already assumes the expiration of the current tax rates; that is to say, the rates on the highest level go from 35% to 39.6%, and that money is spent. If you took all the top-rate income, you would come up with $25 billion a year, not even enough to meet what is here, and that money has already been spent. The reality is somewhere or other, somehow, more taxes would have to be raised. I don't think the American people want to do that, particularly in the current environment. LEGISLATIVE OUTCOME:Amendment rejected, 43-55

Reference: Bill S.Amdt.4218 to S.Con.Res.70 ; vote number 08-S064 on Mar 13, 2008

Voted NO on allowing AMT reduction without budget offset.

CONGRESSIONAL SUMMARY:To exempt from pay-as-you-go enforcement modifications to the individual alternative minimum tax (AMT) that prevent millions of additional taxpayers from having to pay the AMT.

SUPPORTER'S ARGUMENT FOR VOTING YES:Sen. GRASSLEY: The Senate voted to make sure that middle-class America didn't pay the AMT, and we did it without an offset, by a vote of [about 95%]. So here we are again with an opportunity to say to middle-class America that we are not going to tax the people who were not supposed to be hit by the AMT. This amendment gives us an opportunity to get over that hurdle that is in this budget resolution that, under pay-go, you would have to have an offset for the AMT. Unless my amendment is adopted, the 25 million families who will be hit by the AMT increase will get a tax increase of over $2,000 apiece. They deserve a guarantee of relief.OPPONENT'S ARGUMENT FOR VOTING NO: Sen. CONRAD: If you want to blow a hole in the budget as big as all outdoors, here is your opportunity--a trillion dollars not paid for, a trillion dollars that we are going to go out and borrow from the Chinese and Japanese. That makes absolutely no sense. I urge my colleagues to vote no.LEGISLATIVE OUTCOME:Amendment rejected, 47-51

Reference: Bill S.Amdt.4276 to S.Con.Res.70 ; vote number 08-S078 on Mar 13, 2008

Voted NO on raising the Death Tax exemption to $5M from $1M.

CONGRESSIONAL SUMMARY:To protect small businesses, family ranches and farms from the Death Tax by providing a $5 million exemption, a low rate for smaller estates and a maximum rate no higher than 35%.

SUPPORTER'S ARGUMENT FOR VOTING YES:Sen. KYL: This amendment is a reprise of what we did last year in offering to reform the estate tax, sometimes referred to as the death tax. Now, in the budget itself, there is a provision to allow the death tax to be changed from the current law to a top rate of 45% and an exempted amount of $3.5 million, and there are some other features. My amendment would reduce that top rate to no higher than 35% so that if you had more than one rate, at least the top rate could not exceed 35%, and both of the two spouses would have a $5 million exempted amount before the estate tax would kick in. Now, the reason for my amendment is: current law [is] getting up to a high rate of 55% and an exempted amount of either $2 million or $1 million, probably $1 million--a continued unfair burden on primarily America's small businesses and farms.

OPPONENT'S ARGUMENT FOR VOTING NO:Sen. CONRAD: This amendment would virtually eliminate the estate tax. Let me say why. Let me first say there is no death tax in the country. Of course, if you poll people and you ask them: Do you want to eliminate the death tax? they will say sure. But you are not going to pay any tax when you die unless you have $2 million. There is no death tax in America. There is a tax on estates. At today's level of $2 million, that affects only 0.5% of estates. When the exemption reaches $3.5 million in 2009, 0.2% of estates will be taxed. If the amendment is agreed to, we would be borrowing money in the name of 99.8% of the American people, borrowing primarily from China & Japan, to give it to the Warren Buffets, the Paris Hiltons, & others of enormous wealth in this country.

LEGISLATIVE OUTCOME:Amendment rejected, 50-50

Reference: Kyl Amendment; Bill S.Amdt.4191 to S.Con.Res.70 ; vote number 08-S050 on Feb 13, 2008

Voted NO on repealing the Alternative Minimum Tax.

Amendment would accommodate the full repeal of the Alternative Minimum Tax, preventing 23 million families and individuals from being subject to the AMT in 2007, and millions of families and individuals in subsequent years.

Proponents recommend voting YES because:

This amendment repeals the AMT. Except for the telephone tax, the alternative minimum tax is the phoniest tax we have ever passed. The AMT, in 1969, was meant to hit 155 taxpayers who used legal means to avoid taxation, under the theory that everybody ought to pay some income tax.

This very year, more than 2,000 people who are very wealthy are not paying any income tax or alternative minimum income tax. So it is not even working and hitting the people it is supposed to hit. Right now, this year, 2007, the year we are in, there are 23 million families that are going to be hit by this tax. It is a phony revenue machine, over 5 years, $467 billion dollars. We are going to have to have a point of order this year to keep these 23 million taxpayers from paying this tax. We might as well do away with it right now, once and for all, and be honest about it.

Opponents recommend voting NO because:

The reality of the budget resolution is this may not have anything to do with eliminating the alternative minimum tax. The one thing it will do is reduce the revenue of the Government over the next 5 years by $533 billion, plunging us right back into deficit. Look, we can deal with the AMT. We have dealt with it in the underlying budget resolution for the next 2 years. There will be no increase in the number of people affected by the AMT for the next 2 years under the budget resolution, and that is paid for. Unfortunately, this amendment is not paid for. It would plunge us back into deficit. I urge my colleagues to vote no.

Reference: Grassley Amendment; Bill S.Amdt.471 on S.Con.Res.21 ; vote number 2007-108 on Mar 23, 2007

Voted NO on raising estate tax exemption to $5 million.

An amendment to raise the death tax exemption to $5 million; reducing the maximum death tax rate to 35%; and to promote economic growth by extending the lower tax rates on dividends and capital gains.

Proponents recommend voting YES because:

It is disappointing to many family businesses and farm owners to set the death tax rate at what I believe is a confiscatory 45% and set the exemption at only $3.5 million, which most of us believe is too low. This leaves more than 22,000 families subject to the estate tax each year.

Opponents recommend voting NO because:

You can extend all the tax breaks that have been described in this amendment if you pay for them. The problem with the amendment is that over $70 billion is not paid for. It goes on the deficit, which will drive the budget right out of balance. We will be going right back into the deficit ditch. Let us resist this amendment. People could support it if it was paid for, but it is not. However well intended the amendment is, it spends $72.5 billion with no offset. This amendment blows the budget. This amendment takes us from a balance in 2012 right back into deficit. My colleagues can extend those tax cuts if they pay for them, if they offset them. This amendment does not pay for them; it does not offset them; it takes us back into deficit. It ought to be defeated.

Reference: Kyl Amendment; Bill S.Amdt.507 on S.Con.Res.21 ; vote number 2007-083 on Mar 21, 2007

Voted NO on supporting permanence of estate tax cuts.

Increases the estate tax exclusion to $5,000,000, effective 2015, and repeals the sunset provision for the estate and generation-skipping taxes. Lowers the estate tax rate to equal the current long-term capital gains tax rate (i.e., 15% through 2010) for taxable estates up to $25 million. Repeals after 2009 the estate tax deduction paid to states.

Proponents recommend voting YES because:

The permanent solution to the death tax challenge that we have today is a compromise. It is a compromise that prevents the death rate from escalating to 55% and the exclusion dropping to $1 million in 2011. It also includes a minimum wage increase, 40% over the next 3 years. Voting YES is a vote for that permanent death tax relief. Voting YES is for that extension of tax relief. Voting YES is for that 40% minimum wage increase. This gives us the opportunity to address an issue that will affect the typical American family, farmers, & small business owners.

Opponents recommend voting NO because:

Family businesses and family farms should not be broken up to pay taxes. With the booming economy of the 1990s, many more Americans joined the ranks of those who could face estate taxes. Raising the exemption level and lowering the rate in past legislation made sense. Under current law, in my State of Delaware, fewer than 50 families will face any estate tax in 2009. I oppose this legislation's complete repeal of the estate tax because it will cost us $750 billion. Given the world we live in today, with clear domestic needs unmet, full repeal is a luxury that we cannot afford.

To add insult to this injury, the first pay raise for minimum wage workers in 10 years is now hostage to this estate tax cut. We are told that to get those folks on minimum wage a raise, we have to go into debt, so that the sons and daughters of the 7,000 most fortunate families among us will be spared the estate tax. We must say no to this transparent gimmick.

Reference: Estate Tax and Extension of Tax Relief Act; Bill H.R. 5970 ; vote number 2006-229 on Aug 3, 2006

Voted NO on permanently repealing the `death tax`.

A cloture motion ends debate and forces a vote on the issue. In this case, voting YES implies support for permanently repealing the death tax. Voting against cloture would allow further amendments. A cloture motion requires a 3/5th majority to pass. This cloture motion failed, and there was therefore no vote on repealing the death tax.
Reference: Death Tax Repeal Permanency Act; Bill HR 8 ; vote number 2006-164 on Jun 8, 2006

Voted YES on $47B for military by repealing capital gains tax cut.

To strengthen America's military, to repeal the extension of tax rates for capital gains and dividends, to reduce the deficit, and for other purposes. Specifically, a YES vote would appropriate $47 billion to the military and would pay for it by repealing the extension of tax cuts for capital gains and dividends to 2010 back to 2008. The funds wuold be used as follows:
Reference: Tax Relief Extension Reconciliation Act; Bill S Amdt 2737 to HR 4297 ; vote number 2006-008 on Feb 2, 2006

Voted NO on retaining reduced taxes on capital gains & dividends.

Vote to reduce federal spending by $56.1 billion over five years by retaining a reduced tax rate on capital gains and dividends, as well as.
Status: Bill passed Bill passed, 66-31
Reference: Tax Relief Extension Reconciliation Act; Bill HR 4297 ; vote number 2006-010 on Feb 2, 2006

Voted NO on extending the tax cuts on capital gains and dividends.

This large piece of legislation (418 pages) includes numerous provisions, generally related to extending the tax cuts initiated by President Bush. This vote was on final passage of the bill. The specific provisions include:
  1. Extension Of Expiring Provisions: for business expenses, retirement savings contributions, higher education expenses, new markets tax credit, and deducting state and local sales taxes.
  2. Provisions Relating To Charitable Donations, and Reforming Charitable Organizations
  3. Improved Accountability of Donor Advised Funds
  4. Improvements in Efficiency and Safeguards in IRS Collection
Reference: Tax Relief Act of 2005; Bill S. 2020 ; vote number 2005-347 on Nov 18, 2005

Rated 100% by the CTJ, indicating support of progressive taxation.

Obama scores 100% by the CTJ on taxationissues

OnTheIssues.org interprets the 2005-2006 CTJ scores as follows:

About CTJ (from their website, www.ctj.org):

Citizens for Tax Justice, founded in 1979, is not-for-profit public interest research and advocacy organization focusing on federal, state and local tax policies and their impact upon our nation. CTJ's mission is to give ordinary people a greater voice in the development of tax laws. Against the armies of special interest lobbyists for corporations and the wealthy, CTJ fights for:

Source: CTJ website 06n-CTJ on Dec 31, 2006

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