OBAMA: Four years ago, when I stood on this stage, I said that I would cut taxes for middle-class families. And that's exactly what I did. We cut taxes for middle-class families by about $3,600. And the reason is, because I believe that we do best when the middle class is doing well. And by giving them those tax cuts, they had a little more money in their pocket, and so maybe they can buy a new car. They are certainly in a better position to weather the extraordinary recession that we went through. They can buy a computer for their kid who's going off to college, which means they're spending more money, businesses have more customers, businesses make more profits, and then hire more workers.
Obviously, Obama and Congress are going to push for increases on taxes for the wealthy. In his 2011 budget, Obama calls for going back to the pre-Bush top bracket of 39.6% from the current level of 35%. Meanwhile, House [Democrats] want to raise taxes on the top bracket even more by imposing an additional surtax of 5.4%
The Heritage Foundation reports that, at 52.9%, the top rate under this plan would be "higher than the top rate in all but three countries in the OECD: Denmark (60%), Sweden (56%), and Belgium (54%)."
The problem with the Death Tax isn't how it affects families that own the wealth so much as how it impacts those who earn money to accumulate it. The tax itself is paid by only the top 2% of families. The central question for wealthy elderly Americans is what to do with their money. Should they keep it in cash or easily liquefied investments, or is it better to plow the money back into their businesses?
The Death Tax creates an incentive NOT to invest money in one's business, but to keep it in things like houses and yachts and luxury goods--or cash and gold and bonds--that are easier to liquidate.
"The answer is to make government bigger ...take more of your money...give you more orders from Washington...and to reduce the strength of America in a dangerous world. America needs more energy...our opponent is against producing it.
"And let me be specific, the Democratic nominee for president supports plans to raise income taxes...raise payroll taxes...raise investment income taxes...raise the death tax...raise business taxes...and increase the tax burden on the American people by hundreds of billions of dollars."
Obama's short answer was yes, and he finished with this revealing comment: "I think when you spread the wealth around, it's good for everybody."
An ABC cameraman recorded the exchange, and on Oct. 12, 2008, "Joe the Plumber" was born. Our campaign quickly realized that Joe typified the everyday American laborer who had worked hard to make his own way, was trying to improve his economic lot, and ought not be punished by oppressive tax policies.
Joe told a reporter that Obama's idea of "spreading the wealth around" sounded a lot like socialism to him. In the presidential debate, both candidates made references to Joe the Plumber as a symbol of the American worker.
The Facts:Obama bases the $700,000 claim on a Fortune 500 survey that showed the average CEO of those companies earned a salary of $12.8 million in 2007. What the statement considers a tax cut would be renewing President Bush’s current cuts, which are scheduled to expire by January 2011. McCain has said he would push to renew those cuts, while Obama wants to let the cuts run out for the wealthiest Americans and offer new ones to people who make less money. So, in effect, what Obama calls a tax cut would be keeping taxes for those wealthy CEOs the same as they are now--instead of letting them revert to what they were before Bush’s cuts. The Verdict: True, but incomplete.
OBAMA: I want to provide a tax cut for 95% of Americans. If you make less than a quarter of a million dollars a year, you will not see a single dime of your taxes go up. If you make $200,000 a year or less, your taxes will go down. Now, Sen. McCain talks about small businesses. Only a few percent of small businesses make more than $250,000 a year. The vast majority of small businesses would get a tax cut under my plan. And we provide a 50% tax credit so that they can buy health insurance for their workers, because there are an awful lot of small businesses that want to do right by their workers but they just can’t afford it. Some small business owners can’t even afford health insurance for themselves
A: Absolutely. Because think about what I am going to be running against: the failed policies of the Bush administration, which John McCain wants to continue. I don’t think there is anybody in this country who thinks that, right now, we have got a government that’s managed our domestic policies well. And, so, we can talk about the slogans of tax and spend or fiscal conservatism, but the fact of the matter is, we have had an administration that’s been profligate, that has raised our national debt to a record level. We have seen a lack of shared prosperity. So, you’ve got CEOs making more in a day than ordinary workers are making in a year, and it’s the CEO that’s getting the tax break, instead of the workers.
Q: He’s going to say you’re going to raise their taxes. What are you going to say?
A: I will raise CEO taxes. There is no doubt about it.
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