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Monday, June 30, 2008

Effect of Obama's Tax Plan on Tiger Woods

Hank Adler (Chapman University, Argyros School of Business & Economics) has published an op-ed, Obama Wants Tiger-Size Tax Bite (Orange County Register):

When Tiger Woods collected his $1,350,000 check for winning the U.S. Open golf championship this month, his federal and California taxes approximated $586,000. So, Tiger got to keep about $764,000, or 57 percent of his winnings. ...

It was fortunate for Tiger that his most-recent U.S. Open win occurred in 2008. Under twin tax proposals from Obama to 1) remove the "cap" from Social Security taxes for individuals earning over $250,000, a plateau Tiger has long since surpassed in 2008, and 2) eliminate the "Bush" tax cuts, thereby raising the top marginal federal income tax rate to 39.6%, Tiger's taxes on his winner's check would have increased to approximately $776,000, a boost of almost $190,000. Instead of Tiger keeping 57% of his earnings and the government taking 43%, under the twin Obama tax proposals, Tiger's federal and California taxes would have amounted to 57% of his winnings, leaving Tiger with just 43%. ...

The New York Yankees have a 2008 payroll of approximately $208 million. Under the twin Obama tax proposals, the 24 Yankee players would be hit with an aggregate increase in federal income taxes of just over $22 million, with slugger Alex Rodriguez single-handedly getting dunned with $2.6 million in additional federal taxes. ...

The twin Obama tax proposals would result in an increase in federal income taxes for self-employed people earning over $250,000 of about 39% and would take the top federal tax rate on self-employment income to its highest level since 1971. It would also take the top marginal tax rate (federal and state taxes combined) in some states to over 57% on self-employment income. For employees, the top federal tax rates would increase by about 30%.

Only once since 1917 has there been a tax-rate increase equal to or greater than the two twin tax proposals being made by Obama. That tax increase, the Revenue Act of 1932, was proposed by Herbert Hoover. The result was an even greater budget deficit, plummeting tax revenue and a lengthier Great Depression.

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Tracked on Jul 1, 2008 11:31:57 AM

Comments

The result was an even greater budget deficit, plummeting tax revenue and a lengthier Great Depression.

Weren't you listening? Obama was asked about this and his response was essentially "Yeah, so? As long as the rich are getting soaked, I'm getting votes."

Of course, that was pre-pivot. There apparently are no immutable positions in his populist spiel.

Posted by: Hogarth Kramer | Jul 1, 2008 10:43:16 AM

"It was fortunate for Tiger that his most-recent U.S. Open win occurred in 2008."

You forgot to mention it was fortunate for Obama that he made his multi-million dollar book royalties, well, before he could implement his tax policies.

Posted by: edh | Jul 1, 2008 10:51:42 AM

Wow,

The moment Tiger Woods starts complaining about the tax implications of playing golf for a living is the moment he has jumped the shark.

I believe the tax on sports figures should be 90%. Because, in reality, they aren't the ones paying the tax. It's the ticket holders who pay the tax. And the ticket holders are enjoying the game in a stadium that poor people (taxpayers) built.

Posted by: justplayingolf | Jul 1, 2008 10:58:19 AM

I believe Tiger Woods lives in Florida, not California.

dont know what, if any impact that has... or perhaps his corporation is domiciled in California?

Posted by: don ruhter | Jul 1, 2008 11:01:09 AM

The obvious conclusion to this piece is that the only "winners" from Obama's massive tax-hikes will be tax lawyers, accountants, the domestic tax-shelter industry, and the countries where wealthy individuals transfer their taxable assets.

So, Great Obamessiah, tell me again how massive tax increases will bring "hope and change." Seems to me, "hope and change" will quickly morph into "duck and cover."

Posted by: MarkJ | Jul 1, 2008 11:03:00 AM

I like having tax rates low and honestly believe that is good policy for the economy and society.
But I have to admit, the thought of (IMO) overpaid celebs and atheletes being squeezed is appealing...

Posted by: Jim,MtnViewCA,USA | Jul 1, 2008 11:05:48 AM

Never let facts get in the way of economic justice.

Posted by: Emerson | Jul 1, 2008 11:19:51 AM

"But I have to admit, the thought of (IMO) overpaid celebs and atheletes being squeezed is appealing..."

Why do you say they're overpaid? Because they make much more than you? They are paid what the market for their talents allow.

Perhaps you are overpaid. In fact I think you are. Let's increase your taxes so I can feel better about making less than you.


Posted by: tk | Jul 1, 2008 11:37:56 AM

justplayingolf: May want to double-check who wrote the quoted text. Tiger Woods almost certainly knows nothing about this.

Posted by: Jeremy Bowers | Jul 1, 2008 11:38:21 AM

The minute any one of you can play golf as well as Tiger Woods or provide the same level of enjoyment to me that I get from watching Tiger Woods play golf, you can start bitching about his salary.

Til then, how 'bout shutting up, mmkay?

Posted by: chip | Jul 1, 2008 11:38:44 AM

Poor people don't pay taxes. They get refunds under the guise of "credits".

Posted by: Bruce in SoCal | Jul 1, 2008 11:39:10 AM

Tiger pays California tax because the US Open was in California.

Posted by: Think38 | Jul 1, 2008 11:51:20 AM

Obama is a typical lefty democrat, arrogant and stupid. Most people work for small businesses. Under such onerous taxes the owners of such business will cut costs before reducing their take home income. Employees get laid off, benefits are reduced and other cost savings are implemented.

The single self employed will resort to the extent possible in tax evasion. Cash for payment, no receipts or invoices given. Barter for service, fix my car and I'll fix your teeth etc just like in good old socialist Sweden.

Large corporations will shift more of their operations overseas and hollow out the US operations mainly by keeping them as sales units and not much more. Who is to say that an item imported and sold at near landed cost in the US is being sold at an inflated cost/ price to avoid US income taxes?

This typical democrat idiocy will only result in rampant tax evasion. It is easy to be a socialist at 15% but not at 57%. Aside from this there is the moral component that those who would pay such nominal rates are given the choice of becoming criminals or allowing themselves to robbed. Essentially they are subject to being made in to slaves, working for free so others can benefit from their theft of the productive class. In return what do the tax slaves get? Extra votes in proportion to their outsize contributions? No. Better services and exclusive services? No. Will the tax parasites at least compensate them for their thievery by cleaning their homes or doing their laundry and gardening for free? No.

The super rich don't have to put up with this. They can cut their losses and take their money out of the country. Like the Dart family.Renounced their US citizenship and gave the IRS a big F.U. So go ahead and vote for the new communist party but don't moan when you find yourself unemployed and broke.

Obama's and the democrats are advocating the same type of tax and trade policies that converted a stock market crash first in to a deep recession and then to a great depression. Herbert Hoover economics. No doubt to followed by Roosevelt economics which prolonged the depression until the start of WW2.

The founders were right. Voting should be limited to taxpayers only.

Posted by: cubanbob | Jul 1, 2008 11:52:22 AM

"poor people don't pay taxes" ... they just lose jobs.

Posted by: moptop | Jul 1, 2008 11:57:17 AM

Just playing Golf:

Believe it or not, athletes have to pay tax in the state they earned it! My accountant does some major league ball players taxes and they have to pay in every state they have a game! So yes, Tiger has to pay California tax for California tournaments. However, overall, Florida does not have an income tax so any royalties, etc. he earns are not taxed by any state.

Posted by: Romeo Bravo | Jul 1, 2008 12:05:51 PM

: Wow,

The moment Tiger Woods starts complaining about the tax implications of playing golf for a living is the moment he has jumped the shark.

I believe the tax on sports figures should be 90%. Because, in reality, they aren't the ones paying the tax. It's the ticket holders who pay the tax. And the ticket holders are enjoying the game in a stadium that poor people (taxpayers) built.

Posted by: justplayingolf | Jul 1, 2008 10:58:19 AM"

I believe you should taxed at 90%. Who ever pays your salary is passing it on as well. Don't want to hurt the poor now or do you? Here is a tip: golf is not played in stadiums. And poor people don't much in the way of taxes compared to the cash and kind benefits they receive from the slaves who actually do pay taxes.

Posted by: cubanbob | Jul 1, 2008 12:12:41 PM

Some of the comments are why this country is in the shape it is! We cannot let class warfare happen. Just because some people make more money, you shouldn't envy them and think it justified to take their money. More likely than not, there are poor and homeless people who would say that you should be taxed at 90% because you make $50,000 a year and have a home and a car.

If we cut our government spending by getting the private sector in charge of many things the government is now running very inefficiently, then we pay down the national debt and lower the overall tax burden for everyone.

Budgeting is all about finding ways to pay for your expenses, not a way to stir up class warfare. If you aren't willing to pay for a government program personally, then don't vote it in.

Don't play into the hands of those who want to divide the nation through class warfare. That will be the thing that ruins us.

Posted by: Chris | Jul 1, 2008 12:21:26 PM

What a pity that Tiger and people just as wealthy do not have access to tax shelters, corporations, business deductions and the like to help them ease their tax burden.

Oh, wait ....

Posted by: Bill Peschel | Jul 1, 2008 12:22:58 PM

Raise baseball players taxes to 90% and I won't go to any ball games in protest. Who has the right to decide about anyone's tax? Who made the Democrats god? This would be dictatorship, not a free society...in effect, it would be slavery.

Posted by: Rob Diego | Jul 1, 2008 12:51:24 PM

I don't know much about taxes, much less state taxes. So the California taxes are a form of income taxes Tiger must pay even though he is a Florida resident? Since Florida has no income taxes does this mean players would prefer to win in Florida?

Posted by: big al | Jul 1, 2008 12:57:16 PM

When Tiger hears about this, he'll probably just get "bitter" and cling to his golf clubs. justplayinggolf@10:58: Someone can correct me, but I believe professional athletes have to pay taxes on income where it is earned, not just in the state where where they live. They file income tax returns in each state where they play, getting offsetting tax credits on the return they file in the state where they are domiciled (assuming their home state has a reciprocal tax agreement with the other states).

Posted by: Tout D. Suite | Jul 1, 2008 1:02:55 PM

Tout D. Suite said...
Someone can correct me, but I believe professional athletes have to pay taxes on income where it is earned, not just in the state where where they live. They file income tax returns in each state where they play, getting offsetting tax credits on the return they file in the state where they are domiciled (assuming their home state has a reciprocal tax agreement with the other states).

Is this why states and cities bend over backwards to attract pro teams? I'd never considered this angle. I always thought they were making a bad gamble based on increased sales tax revenue. If they're also getting a piece of every athlete's per-game salary, that makes more sense. Wisconsin must really love it when the Yankees come to town.

Are they also taxing everyone else on the team (e.g. coaches, trainers, caddies, towel boys, etc.)?

Posted by: kwo | Jul 1, 2008 2:00:22 PM

Perhaps Tiger put off his knee surgery as long as he did in order to maximize his disposable income?

Posted by: ChrisN | Jul 1, 2008 2:25:38 PM

I couldn't agree more with "cubanbob" above. Why would you want to spend your life in perpetual envy, and a sense of "got'cha" whenever someone who makes more than you gets taxed more.
As I heard a very wise talk-show host say once (sorry, have to paraphrase here): "there is always somebody who makes more than you out there; no matter how rich you are, no matter if you're a Bill Gates or a Warren Buffet, there's always somebody who makes more (in the case of Gates or Buffet - maybe not this year, or next year, or whenever, but it will happen sometime)".
So who do we want making those decisions? I don't know about all of you, but I don't want that person to be a lightly-experienced socialist from Illinois, who has to remind us he's going to start acting more patriotic (see yesterday's news).

Posted by: Kirk | Jul 1, 2008 2:27:58 PM

I couldn't agree more with "cubanbob" above. Why would you want to spend your life in perpetual envy, and a sense of "got'cha" whenever someone who makes more than you gets taxed more.
As I heard a very wise talk-show host say once (sorry, have to paraphrase here): "there is always somebody who makes more than you out there; no matter how rich you are, no matter if you're a Bill Gates or a Warren Buffet, there's always somebody who makes more (in the case of Gates or Buffet - maybe not this year, or next year, or whenever, but it will happen sometime)".
So who do we want making those decisions? I don't know about all of you, but I don't want that person to be a lightly-experienced socialist from Illinois, who has to remind us he's going to start acting more patriotic (see yesterday's news).

Posted by: Kirk | Jul 1, 2008 2:28:55 PM

I've got it. Let's soak the rich with a surtax when they buy their luxury boats. That'll teach 'em and bring in a boatload (I know, I know) of money too.

What? You say we already did that? Oh - and the result was (1) most US luxury boat builders went out of business, (2) their employees lost their jobs and either took lower paying ones or went on welfare, (3) the cities where the boat builders had been lost tax revenue from the boat builders and saw lower economic activity in general, and (4) the rich just took their boat buying overseas where the tax didn't apply.

OK, well, then, let's just raise the tax on those nasty unearned capital gains. What? You say . . .

Socialists never "learn" that higher tax rates don't work because they don't really care whether they work or not. Their underlying purpose is to reduce as many citizens to as much dependence on the government (i.e., them) as possible. If that means making everybody poorer, well so be it.

Posted by: wrangler5 | Jul 1, 2008 2:46:37 PM

Tiger Woods doesn't just entertain millions, he also singlehandedly employs thousands. I mean it-- think of all the jobs that are created by the participation and presence of Tiger, not just the probably several hundred whom he ACTUALLY employs.

We're not talking about Atlas shrugging here, since Tiger would play for free just to beat the world. But in the real world, rich people are the CAUSE of the jobs of regular people. If rich people get hit, hammered, beat on and stolen from in sufficient number and intensity, they'll reel it in, buy bonds, live on 4% a year from their fortunes, and they will employ NOBODY. Because it's too damn expensive to do business, with the big red targets on their backs.

Rich people will NOT be hurt by higher taxes. They'll simply adjust their activities to match the new circumstances. But working people, everyone from $30k to a million a year, will drop like flies. Small business employs anywhere from 60 - 80% of Americans. Imagine if half the small businesses in this country started sacking people to reduce expenses. We'd have 25% unemployment in no time, just like the Great Depression.

Posted by: Dave | Jul 1, 2008 3:41:03 PM

If the socialists posting here think that the pros are over paid, let's just cap their pay, at say 10% of current salaries. Since it's not tax receipts, but fairness, that should make them happy.

Better yet, let the libs decide how much everyone gets paid. Then we can watch doctors, engineers, and all the other professionals (except lawyers) leave the country, or cut back on their work week, find less stressful careers, etc. Why spend your life perfecting your skills?

Socialism worked so well in the former USSR, and eastern europe.

Posted by: notRICH | Jul 1, 2008 4:27:05 PM

Ummmmm...Why shouldn't Tiger who's earning millions of dollars pay substantially more in taxes than the average American earning 40K? And to preempt the calls that I am a socialist/communist, I am not advocating what you think I am advocating. We need to balance the budget to undo the numerous (understatement!) fiscal mistakes Bush made - taxing the super-rich is the way to go.

Posted by: Jimbo | Jul 1, 2008 5:09:44 PM

Boohooo.... How will he be able to survive now?

Posted by: Mike | Jul 1, 2008 5:33:36 PM

The only thing worse than a tax and spend democrat is a borrow and spend republican. Bush's tax cuts were not tax cuts b/c he raised spending. All his tax cuts were were future tax increases.

Posted by: taxlawstudent | Jul 1, 2008 6:43:19 PM

and, Tiger Woods is a representative sample of the average middle class taxpayer because.....?


Posted by: anon man | Jul 1, 2008 10:19:19 PM

"It was fortunate for Tiger that his most-recent U.S. Open win occurred in 2008."

Yet, even after the "Obama Tax" on earned income the odds of Tiger abandoning his "profession" because 'its no longer worth it' would be what...a billion to one?

Wealthy wage-earners - in stark contrast to wealthy "unearned" investment earners - show up to work for reasons having very little to do with their paycheck.

So tax Tiger to the heavens (if 57% can be called such), and Kobe, and every Fortune 500 CEO. Betcha EVERY one still turns up to pursue their dreams the next day.

Contra investment returns, which are extraordinarily sensitive to marginal tax rates. Different taxes have differing effects. Taxes on capital and taxes on labor are quite different.

Posted by: Jim | Jul 2, 2008 12:24:56 AM

Must be the young and stupid who propose these class warfare ideas. Heads full of communist mush, steeped in this nonsense by tenured liberal professors. No one else can be this stupid. Go one and vote for the socialist party of treason.
Wait until thy graduate straight in to the unemployment. Student loans up to their eyeballs.

And the reason for that? Obama and the Marxist Congress. Watch and see the stock market meltdown from the day after the election through the end of the year as everyone tries to cash out. See the bond markets crash as bond holders rush to get out and take their money elsewhere, like in to Euros or other currencies.

Like I said before the tax evasion will become the norm and not the exception.
The government won't be able to collect enough taxes from the rich and won't be able to borrow to cover the deficits. The spending cuts will be massive and mostly from defense. We will be forced to pull out, our enemies will rejoice (like the Vietnamese communist )our allies will bag us since this will be proof positive that America is weak and unreliable. And we will be hit again and again and again.

Money is not sentimental and when the owners feel they are being robbed they will have their money sleep in a city far,far away from the IRS. We had the Carter Administration. We don't need another 70's show rerun.

Posted by: cubanbob | Jul 2, 2008 12:26:41 AM

"Posted by: edh | Jul 1, 2008 10:51:42 AM

Wow,

The moment Tiger Woods starts complaining about the tax implications of playing golf for a living is the moment he has jumped the shark.

I believe the tax on sports figures should be 90%. Because, in reality, they aren't the ones paying the tax. It's the ticket holders who pay the tax. And the ticket holders are enjoying the game in a stadium that poor people (taxpayers) built."

Well, I agree with edh that taxpayers should not be building stadiums. However, his comment that "the ticket payers pay the tax" is a classic fallacy often stated by sportswriters. Attention: the sellers of the tickets will maximize their receipts whether Tiger gets $6,000.00 or $6,000,000.00 for winning. If you control the wages of sports stars you will not see a reduction in ticket prices. The NBA has a bizarre limitation on the wages of players in their first three years in the league. Does this lower ticket prices? Of course not, rather it allows the league and more experienced players to make more money agreeing to control the salaries of the players NOT YET IN THE UNION. But this "savings" does not lower ticket prices. The teams set the price of tickets at the level they believe will maximize receipts, and will do so regardless of how much the players are paid. Tiger gets rich because his market value is so high. Or, to put it another way, ticket prices for pro sports are not cost based, they are market based.

Posted by: Rob Ives | Jul 2, 2008 12:49:10 AM

Let me review the math on Tiger's taxes?

f you say he currently pays 43%, then that breaks down to: 35% (top federal rate)+ 2.9% (medicare tax, he pays both employee and employer rates) + 5.1% (I am squeezing to the assummed top California tax rate).

Now under the Obama proposals, as I understand them, his rate increases by 4.9% (repeal of bush tax cuts) + 12.4% (both sides of social security). Added to the 43% then he his marginal rate would be 60.3% leaving him with 39.7%.

There are two further adjustments to make. Half of the social security tax can be offset through an adjustment outside of his deductions. So the value of that 6.2% deduction on his federal tax would be approximately a 2.48% reduction in his rate which puts him back at 42.2% net. (There would be some decrease in his California rate also, so I assume that is how you get to the 43% net keep including California taxes. )

However, there is a further "Bush" tax cut to be rolled back. Under Clinton (and the early Bush years) there was a 2.5% loss of deductions for each dollar of increased earnings above a minimum level. At a 40% rounded rate this amounts to a further 1% increase in the effect rate (39.6% of 2.5%), assuming the tax payer has deductions still left to loose. In Tiger's case he likely doesn't have mortgage interest, however it is not merely his charitable contributions that he gets to reduce, but his substantial deductions for state taxes paid in his various earnings in taxable states. I have read somewhere that this is part of Obama's staff's ideas about rolling back tax breaks on the wealthy.

By this math I would place his effective tax rate at 58% and his net take home at 42%, ignoring the impact of limited deductions on his state taxes which would raise his rate a few tenths of a percent.

It would be interesting indeed if some highly paid entertainer or athlete looked at the highest tax rate states and announced that he would forgo an event in that state since the combined state and federal rates made his effort no longer worthwhile vs. the loss a free weekend.

Posted by: Lary | Jul 2, 2008 12:55:15 AM

I doubt most of the American poor who would benefit financially from Obama's plan are philosophically socialist. I would even guess that most poor people don't believe that a forced wealth redistribution system is right or fair.

But they don't want to pay taxes.

So Obama panders to their pocket not their philosophy. It is why you'll be hearing a lot more this fall about "to each according to his need" and less and less about "from each according to his ability" -- even though the two are inextricably linked.

Posted by: Mark Schism | Jul 2, 2008 1:42:07 AM

This claim is dubious from the get-go. Although tax revenue would go up under Obama's tax plan, one could argue that he's actually proposing a tax cut.

Let us explain: President Bush's tax cuts of 2001 and 2003 came with what are called "sunsets," or scheduled expiration dates. Bush has asked Congress several times to make the cuts permanent, but Congress has thus far declined to do so. As the law stands today, the cuts will expire by 2011 and taxes will go back up.

Obama wants to allow some of the cuts - specifically those on incomes over $250,000 - to expire. But he wants to keep the cuts on lower incomes, and reduce taxes even further on some of the lowest earners.

Obama's plan, according to a June 11 analysis by the nonpartisan Urban-Brookings Tax Policy Center, would generate $2.7-trillion less over 10 years than the government would collect if it allowed Bush's cuts to expire on schedule.

So calling it a tax increase might not be considered fair. There's no disputing that taxes will rise, but the question of who's responsible for that tax increase is another matter entirely. At PolitiFact, we've concluded, as have others, that it's unfair to call Obama's plan a tax increase merely because it doesn't change existing tax law to keep rates low. We think about it this way: The reason taxes will increase is because of tax policy signed into law not by Obama, but by somebody else.

Obama's plan doesn't call for raising taxes.

"It's not accurate," said Leonard Burman, co-director of the center. "He's actually proposing a tax cut."

Still, it's true that tax revenue would go up under Obama's plan. Revenue would be $1.1-trillion more over the next 10 years under Obama's plan than it would be if the government extended Bush's tax cuts. And the effect of Obama's policy on the economy would be that of a tax increase.

So let's indulge McCain for a minute, and call it a tax increase.

Now - how big an increase would it be?

Let's take one particular year, since past tax increases have been measured over one year. And let's pick 2012, since all of Obama's proposed changes to current policy would be phased in by then.

The Tax Policy Center - which is a joint project of the Brookings Institution and the Urban Institute in Washington, D.C., that both liberal and conservative economists consider credible - estimated that under Obama's plan tax revenue in 2012 would be $70.2-billion greater than it would be if Bush's tax cuts were extended. That's just an estimate - the Obama campaign hasn't spelled out every detail of its tax plan - but it's the best one available at this point, several experts said.

So how does a $70.2-billion increase compare to other tax increases since World War II? The best source for information on the sizes of past tax increases, several economists told us, is a paper by Jerry Tempalski of the U.S. Treasury Department, "Revenue Effects of Major Tax Bills," updated in 2006. He said the best way to gauge the size of a tax increase is to compare it to the overall size of the economy, otherwise known as the Gross Domestic Product.

The $70.2-billion increase under a President Obama is .40 percent of the projected GDP for 2012 ($17.5-trillion). That would be just the ninth-largest increase since World War II, not the largest. However, there are other ways to measure the size of tax increases. Tempalski said the second-best way is by its size in dollars, adjusted for inflation. He compared the historical increases by putting them in 1992 dollars. Obama's $70.2-billion increase in 2012 would be $40.5-billion in 1992 dollars, according to the Congressional Budget Office. By that measure, it would be the second-largest increase since World War II. The Revenue and Expenditure Control Act of 1968, passed under Lyndon Johnson to reduce a deficit swelled by the Vietnam War, yielded a tax increase of $55.3-billion in 1992 dollars.

So based on what is known so far about Obama's plan, it would not be the largest since World War II by either of the two best measures. Moreover, Obama's proposal does not constitute a tax increase in the traditional sense, since taxes would be lower under his plan than they would under current law. We find McCain's statement to be False.

http://www.politifact.com/truth-o-meter/statements/524/


McCain flipped on payroll taxes, if only once

What politicians have said on TV often comes back to haunt them.

Sen. John McCain knows that feeling after Sen. Barack Obama recalled a past statement McCain made about Social Security solvency on a Sunday morning news show.

In a June 13, 2008, speech to senior citizens in Columbus, Ohio, Obama outlined his plan to require those earning $250,000 or more to contribute more in payroll taxes while keeping all other tax levels constant.

Then Obama dropped this line:

"There was a time when John McCain thought this wasn't such a bad idea. When he was asked a few years ago whether he could see himself lifting the cap on the payroll tax, he said, 'I could.' But today he's attacking me for holding the very same position."

McCain never put specific salary parameters to the issue, but he did tell Tim Russert on a Feb. 20, 2005, edition of Meet the Press, that he would consider increasing the Social Security payroll tax to help keep the system solvent.

Here's the relevant material from the transcript:

Russert: Sen. McCain, there's a big debate in your Republican Party about whether or not, as part of the solution to Social Security's solvency problem, that you lift the cap so that you would pay payroll tax, Social Security tax, not just on the first $90,000 of your income, but perhaps even higher. Could you support that as part of a compromise?

Sen McCain: As part of a compromise I could, and other sacrifices, because we all know that it doesn't add up until we make some very serious and fundamental changes. (At the time, the cap stood at $90,000. In January 2008, it rose to the current level of $102,000.)

Reacting to Obama's assertion, McCain's advisors told reporters in a June
2008 conference call that he would not "under any imaginable circumstance"
consider raising the payroll tax. During the conference call, campaign advisors didn't address McCain's 2005 statement on Meet the Press.

Neither McCain's campaign nor the Obama camp returned calls seeking more information.

But the record is clear in verifying Obama's statement. We rule it True.

http://www.politifact.com/truth-o-meter/subjects/taxes/


Posted by: rpATX512 | Jul 2, 2008 2:56:10 AM

If it gets to the point where professional athletes are taxed 90% of their salaries, guess what's going to happen? I'll tell you: they will stop playing professional sports. Why would they give away 90% of their income?

And who loses here? Everyone. You no longer get to watch them play, you lose that value there. Cities lose that tourism draw ; there are no more games.

When you overtax, you take away any incentive to do anything; without incentives, no one WILL do anything. Athletes aren't doing this stuff for their health, they're making a living to the best of their ability, just like you and me.

Posted by: Lou | Jul 2, 2008 8:54:10 AM

I doubt most of the American poor who would benefit financially from Obama's plan are philosophically socialist. I would even guess that most poor people don't believe that a forced wealth redistribution system is right or fair.

But they don't want to pay taxes.

So Obama panders to their pocket not their philosophy. It is why you'll be hearing a lot more this fall about "to each according to his need" and less and less about "from each according to his ability" -- even though the two are inextricably linked.

Posted by: Mark Schism | Jul 2, 2008 3:05:59 PM

Ah, so it's a "Tax Cut" because the Bush Tax Cuts are allowed to expire, so then implementing Marxist income redistribution schemes further placing the burden on the "evil rich" so that under Obama's plan, the top 1% of all earners will pay more taxes than the bottom 80% of all wage earners. Seems like not only dickering on what the definition of the word "is" is, Obama's changing the definition of a Tax "Cut" by buying votes in giving Tax "Credits" to folk who pay so little in taxes as it is.

From the Tax Foundation (http://www.taxfoundation.org/news/show/23327.html):


"Under the Obama plan for 2009...The top 1 percent of households would pay more federal taxes of all kinds than the bottom 80 percent of households. That lopsided distribution under Obama does include payroll taxes and other federal taxes, but it excludes the new payroll tax hike that Obama plans to levy on people making more than $250,000 because details about that plan are currently unclear."

"In other words," says Hodge, "it is at this point a cautious estimate to say that in 2009, under Obama's plan, 1.13 million Americans would pay more in all federal taxes than 128 million of their fellow citizens combined."


What was that parable about putting all of ones eggs in a single basket?

Obama's Tax "cut" wouldn't be such a big issue, if he weren't also promising over 1 Trillion in new entitlements and spending. It seems disengenuous to call his tax plan a "cut" when it serves to redistribute wealth.

"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?"

Posted by: Pete | Jul 2, 2008 3:12:31 PM

to the comment above, ticket sales contribute less than 1% of taxes for major sports in the US. ad dollars are far and above the major contributor to tax dollars

Posted by: nathan | Jul 10, 2008 7:58:45 AM

Let the rich pay, maybe the "poor" will be able to play golf at Pebble Beach. Tiger is entitled to every penny he EARNS. he has given all "duffer" golfers and everyone else who plays golf quite a show the last several years. Anyone out there think he is playing for the money?????
GO TIGER AND GO OBAMBA!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Posted by: Wayne | Jul 14, 2008 4:16:40 PM

This article is a pretty dumb vehicle for discussion.

Am I supposed to feel an emotional connection to Tiger Woods and A-Rod when it comes to the effects of tax laws on livelihood? I mean, rising taxes are unfortunate, budget deficits are unfortunate... but are there more than 2 people in this country who really care about the topics at hand, as presented?

Posted by: Tim | Jul 14, 2008 5:16:30 PM