September 23, 2008

To clarify...

Okay, so, honestly... I don't really understand all the ins and outs of the American Tax System. But, I do know and recognize this (along with many other Americans): It needs a MAJOR overhaul.

John McCain's Plan: Pre-Presidential nominee McCain favored tax reform. The American Prospect notes that McCain was a "tough-talking conservative who wraps himself in the Gipper's legacy, inveighs against earmarks, calls himself a deficit hawk, and fought George Bush's 2001 and 2003 tax cuts, McCain seemed to be one of the few politicians in America actually eager to restore some sense to the tax system."

However, since his nomination, his tune has completely changed. Instead of dealing with the reform issues that need to be addressed, McCain now wants to cut the corporate tax from 35% to 25%. This will cost us "$100 billion a year, but fails to eliminate a single corporate tax break." As The American Prospect points out, "the change is very valuable for companies because a $100 deduction today is worth a lot more than $10 a year for ten years. For the same reason, it is very expensive for the Treasury -- to the tune of about $75 billion a year."

It amazes me, the lies they tell. Holtz-Eakin (McCain's top financial advisor) has said that in reality, this would not cost our country a thing. But, in a similar (smaller) proposal headed by Eakin, it was concluded that it would cost our country "$440 billion over a decade."

McCain is also an advocate of immediate investment write-offs, which is a way for businesses to shield their true profits from taxation. Ridiculous. So, while the average working man has to work almost five months to be considered "free of tax," business get to shelter different aspects of themselves from taxation at all. 

For the individual, and families, McCain proposes a repeal of the AMT, which was put in place to protect against tax shielding. (Double standard, what?!) He wants to increase the dependent deduction amount, which would mainly benefit the wealthier people. He's rejected tax reforms that would aid families, such as baby bonuses, and so on.

Basically, in summary, McCain's tax plan would actually cost our country about $300 billion a year, and would not even begin to touch the major reforms that are needed. 

(All quotes came from the same source, cited above. Bad form, I know. But I'm in a hurry.)

Barak Obama: wishes to raise taxes specifically aimed at the wealthy, or those who make more than $250 thousand a year. One possible argument against this is that this constitutes approximately two-thirds of the taxes reported in 2006.  More than likely, this would also increase taxes on small business, which as anyone knows, are the basis for stability in a capitalistic economy. 

Politico reports, in the same article above, that if Obama allows the rescheduled 2011 tax raises to occur, S corporation taxes would go from 35% to 39.6%. "The sole proprietor and partner rate would rise from 37.9 percent all the way up to a staggering 50.3 percent." How will this foster business growth? When 50% of one's profits must go to paying taxes? In my opinion, this will send us into a worse recession than the one we're already faced with. 

However, Obama is also in favor of reform. The Sun-Times reports from Obama's financial advisors saying, "The Obama plan would dramatically simplify taxes by consolidating existing tax credits, eliminating the need for millions of senior citizens to file tax forms, and enabling as many as 40 million middle-class filers to do their own taxes in less than five minutes and not have to hire an accountant."

He wants to repeal the estate tax and ratify the dividends tax cuts. So, that's good. I think. But, really... I don't understand how all of this stuff works. I'm just reporting what I've read, what makes sense to me... and the way I see it. 

I don't think that either candidate has it all figure out, nor have the thoroughly figured into their tax plan(s) this new recession we're entering upon. And, I don't know how each plan would play out given the new financial world we're going to be dealing with.

Besides, I almost feel as though within their own separate camps, they have rioters demonizing the other. But, honestly... can we really trust what anyone says about the whole thing? I don't think I've found an unbiased source yet in talking about this stuff. Everyone has their side, who they are willing to defend to the death. So, what good does all this do?

The main thing that I want is honesty. (Ha... politician's actually being honest. It's sad that I feel so skeptical, and cynical about the whole damn process) If we have to have a recession to set things right again, then let's do it. Let's let our capitalistic system return itself to normal, reset itself, as it were. I'd rather have that, live through that, than continue to live in the economic bubble we've enclosed around ourselves. 

There needs to be some accountability, somewhere. And, I'm almost praying that the economy continues to fall... just so that there can be some justice in the system, somewhere. 

Other thoughts:
This guy had an interesting take, which I think is worth thinking about also.

I thought this article in the Sun-Times was interesting. It shows by the numbers what each would do. 


4 comments:

ross said...

So its not late yet and posting this early really just shows my passion for reading this blog continuously. Mainly concerning myself with a way to try and be cynical.

So I apologize for the ways I criticize or if I come off harsh, but sometimes that's me, in words anyway.

Honestly though I appreciate your ability to actually seek out the information and sit down and evaluate it. I would advise you to be wary about the understanding of economic theory. The idea of leaving the economy to right itself is one idea and there is a name for it but it escapes me at the moment.

Ill be posting more later maybe after work. Maybe none of this made sense but when do I.

Take care.

JessamynGrace said...

According to Ron Paul's speech (which I linked to in one of my other comments), it is a type of Austrian economic theory.

Believe me, I'm not claiming to understand anything about economic theory... I've never taken any sort of class in economics, nor have I ever wanted to. But, I do feel like it's necessary to have some sort of idea of what each politician represents... and some frame of reference in which to place it.

I want to do more study in this area. I want to be able to understand what everyone else is writing about. But, right now, I'm just trying to report my findings -- what each campaign is proposing, what they say about it, versus what outsiders have analyzed about it. I think it's useful knowledge to have, when deciding for whom one will vote in the upcoming election.

And, do not worry. I was not offended at your criticism. I really enjoyed trying to hash out what each politician is saying. I think I'll probably post what Bob Barr and Ron Paul are also proposing, even though neither really has any chance. My vote will be with one of them, more than likely.

Hope work goes well.

ross said...

so this is wildly different. and non-political. let's just sit down and take a look for one moment about our own inadequacies let's face it i have several sometimes to complex to keep track of. well let's just say i'm not counting.

maybe its the combination of my cynical perspective teamed up with the crazy notion of how romantic i would dream my life to end up. kind of a hypocritical nature already.

as you may see this leads me to have a unique perspective on a relationship if not only a jaded one. and the way it ends up is far from who i was when it started. its sad really when you can become someone so completely not change necessarily but become engulfed in the eyes of someone. and i've been there. what's scary is that its being vulnerable, being in that moment knowing that the other person could crush you with a whisper, maybe i enjoy having that. but i also become cold. again departed from myself merging a completely new idea that seems undiscerning from the other. more often than not i straddle the two and just fear it.

a rant how fitting. and i could go on but this is supposed to be a comment section. and you may say i should post somewhere else. but let's face it at least here i know i have an audience.

keep reaching. keep dreaming. and wish for things you can't have cause let's face it. no matter what we all enjoy the chase. it's the fun part. it means we don't know what's coming. but it allows us to try and shape in some small way what we would hope for. to be in that moment staring holding a smile and her eyes.

JessamynGrace said...

I think one of the most amazing things about relationships, close relationships, is the fact that we have the ability to be vulnerable, to show our weaknesses, and to be accepted. This is probably one of the most powerful, and most life changing, experiences one can ever have. It's electrifying, terrifying, painful, and joyous... but relationships are THE joy of life -- the only thing that redeems this world, at all.

Hope, dreams, the chase, all that of that fun... but I think the greatest joy is received when one embarks on the biggest adventure of life. It's in those quiet, silent moment, when you realize just how big it really is... and when the thought of it no longer terrifies you... that, is when you've arrived.

That peace that just emanates from your soul outward to your fingers and toes, and brings with it such an overwhelming sense of joy... that has been my ultimate wish. And is now my biggest accomplishment.