10/30/2008

Is Obama a Socialist?

First, lets consider the McCain/Palin assertion that Barack Obama may be a "socialist", wishes to "experiment with socialism", or that his tax plan resembles socialism in any way.

1) Higher taxation for people in higher income brackets is not socialism. It's called progressive taxation. It's used by most governments and overwhelmingly favored by economists.

2) The tax plans of both candidates are based on progressive taxation. They both tax wealthier citizens at higher percentages than they tax the lower income brackets. Obama wants to restore the former tax rates on the two wealthiest tax brackets (which were lowered by George Bush in 2001) while retaining or increasing the tax cuts that were given to the middle class tax brackets.

3) In 2001, while defending his vote against the Bush Tax Cuts, John McCain said,
"I cannot support a tax cut in which so many of the benefits go to the most fortunate among us at the expense of middle-class Americans who most need tax relief."
I don't know what changed McCain's mind, but his position eight years ago sounds like a good argument for Obama's tax plan. Now he's insisting that we need a change, that he's just the maverick to make that change happen, but for some reason we should make the Bush's tax breaks for the wealthy permanent?

4) When Barack Obama used the phrase "spread the wealth" (a regrettable choice of words) in his conversation with Joe the plumber, the contextual meaning was "spread around the *tax breaks* so more people can benefit from them". This is clearly understood if you listen to the entire conversation between Obama and the infamous plumber.

5) John McCain understands that Obama is not really proposing class warfare or the redistribution of wealth. And he understands that the tax proposals of both candidates are more similar than they are different. He knows that neither of them resemble true socialism. The 700 billion dollar bailout plan, which both candidates endorsed, resembles socialism far more closely than either tax plan.

In that light, the repeated assertion that Obama's plan resembles socialism feels pretty dishonest. I'm disappointed that John McCain would allow it to enter the conversation, surprised that he would embrace it, and even more disappointed that it has become such a centerpoint of the final stretch of their campaign.

6) John McCain truly believes that reduced taxes on the wealthiest Americans (and their estates) will ultimately strengthen our economy via the trickle down approach. I'm not questioning his motivation. And it's not a ridiculous concept. Lots of people agree with him. Even I think it may have been a successful strategy in the past (when the world was a very different place). He's entitled to his opinion and he's earned a platform to promote it. I think he should argue the merits of his plan and stop wasting time on unsubstantiated claims of socialism.

Some Important Facts About the Candidate's Tax Plans (I believe these assertions are mostly undisputed):

1) Unless you make over 250,000 per year, Obama's tax plan does not raise your taxes.

2) If your small business does not make a *profit* (not gross revenue) over 250,000 you are better off under the Obama tax plan. Even if your small business *does* make a net profit over 250,000, you may still pay less taxes (especially if your growth includes new employees or capital gains). If you are self-employed, you will have access to better more affordable health care under Obama's plan.

3) About 95% of Americans would be taxed less under Obama's tax plan, than McCain's tax plan.

With this in mind, I'm frustrated that John McCain and his campaign continually state that Obama will raise taxes. This seems pretty dishonest.
Factcheck.org debunks claims that Obama will raise taxes.
Here's a tax calculator which will allow you to estimate your taxes for 2009-2013 under the plans of both of the candidates. This web site is helpful in comparing the tax plans of the candidates; and here is another comparison.


Also: The plans of both McCain and Obama will have a virtually identical impact on the national deficit (neither will fix it; we'll basically end up another $150 billion in the hole either way). I haven't found a non-partisan research group that indicates otherwise. McCain's projections about Obama's spending do not seem to be based in the actual economic plans he has published.

Further: Obama's tax plan includes a comprehensive battery of tax credits and incentives for the middle class tax brackets (encompassing roughly 95% of US citizens). I believe that cultivating a more financially stable sector of professionals and small businesses will stabilize the US economy in much more effective and sustainable way than the "trickle-down" philosophy which has been tried for the last eight years--giving substantial tax breaks to the a few of the wealthiest Americans.

Interestingly enough, an unprecedented number of very wealthy Americans are leaving the republican party to support the Obama/Biden ticket. These are the citizens who know that McCain's tax plan will save them hundreds of thousands of dollars. But they also know that the value of the assets they hold relies on the future prosperity of the US economy. They are willing to pay more in taxes, not neccesarily as a matter of fairness, but a matter of survival.

Finally, Obama's budget does more for education, more for healthcare (I might actually be able to get decent health insurance as a self-employed person), more for senior citizens (no income tax on seniors who make less than 50,000 per year), and more for the technological developments that will make our nation cleaner, more independent, and more competitive.

When it comes to the economy:
What I'm hearing from Obama is a plan for the future. A plan that makes sense. A plan that is changes our course in some very important ways.

I'm not hearing that from McCain. And I'm not hearing where he is offering something substantially different than what we've got now.

4 comments:

Anonymous said...

If you make $50,000 a year and sell a house for $120,000 as part of your retirement strategy, check on what the two candidate's plans do to your "capital gains."

Daniel Rudd said...

i'm sorry anon, i'm not sure how to do that. obama is removing the capital gains tax for most small businesses, but i'm not sure about real estate.

keep in mind, capital gains taxes only apply to real estate if you are making a profit on the sale once you've subtracted many of the costs of owning or improving that property (a capital gain). The entire purchase price isn't taxed.

And most people aren't making big profits on real estate they are selling right now.

Also, it only applies if the property isn't your primary residence.

And if you are a retired senior and make less than 50,000 a year, you don't pay income tax at all.

tarapetty said...

now that the election is over i say your blog should return to its normal content, with more frequent updates.

Suz said...

Are you back yet??