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Monday, July 28, 2008

Tax Foundation Corrects Obama Tax Myths

The Tax Foundation refutes all eight points of an anti-Obama tax screed that is circulating via the Internet and email:

  • 28% capital gains tax rate on ALL home sales
  • 39.6% tax rate on dividends
  • Restored inheritance tax under Obama (repealed under McCain)
  • New taxes on homes over 2,400 square feet
  • New gas taxes
  • New taxes on natural resource consumption (energy, natural gas, etc.)
  • New taxes on retirement accounts
  • New taxes to pay for socialized medicine

http://taxprof.typepad.com/taxprof_blog/2008/07/tax-foundatio-1.html

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Comments

You should clarify that the content of your blog post IS the rumor. Or better yet, you should post the debunking next to the internet rumor instead of the slanted blog post that you now have.

Posted by: Ryan | Jul 28, 2008 6:50:53 AM

Ryan, dude, seriously, click on the links. Is that so difficult for an Obamabot to do?

Posted by: ElcubanitoKC | Jul 29, 2008 5:03:46 AM

I guess "refutes all eight" means something different to a law professor than to people who read, speak and write simple English.

Posted by: SmokeVanThorn | Jul 29, 2008 5:04:11 AM

That's not a very persuasive "refutation." On most of the points, the Tax Foundation says in effect, "Well, yes, Obama sort of does that, but it's a good idea."

Posted by: y81 | Jul 29, 2008 5:15:53 AM

New taxes to pay for socialized medicine

Since Medicare/Medicad are going or are already in deficit numbers, where else is Obama-Lama-Ding-Dong gonna get the cash?

How 'bout just this for his tax position: More old taxes.

And McCain ain't any diff.


Steven
"Taxation _with_ representation ain't so hot, either."

Posted by: Steven Brockerman | Jul 29, 2008 5:57:14 AM

Yes. Present the "rumor" then "debunk" it. That's called a "straw-man argument" right?

Most of your readers will "fall" for this trick, just like they fell for the trick you posted which suggested that rich people pay most of the taxes (when all you really looked at are federal income taxes and not all taxes.)

Wow. You really have to be careful reading this blog for slants. It's becoming obvious with every Instapundit link that your posts can't really be trusted.

On to the specifics:

The linked article doesn't debunk anything. Here's what I gleaned from it. According to Gerald Prante:

* Obama would significantly raise federal taxes, by taxing the capital gains on all but primary home sales
* Obama would significantly raise federal taxes, by raising the tax on the interest and dividends you receive on your savings and on the stocks that you own in your retirement account. He would raise the tax by almost 50%.
* Obama wants to tax the money your parents will leave you by taking 45% of it to spend on his projects. That's YOUR money ... not Obama's.
* Obama wants to penalize you with new taxes if you have to heat your home in the winter.
* Obama favors a stealth tax on energy products called a "windfall profits tax" on oil companies. Oil companies collect the tax, but pass the costs onto people like you who buy gasoline by charging higher prices.
* Obama wants to tax your retirement account through his individual and corporate tax policies and dividend/capital gains policies. This will reduce your retirement account.
* Obama does have a universal health care plan that one could label socialist (according to Gerald Prante.)

Rather than a debunking ... this seems to be a partial list of all the taxes that Obama wants to collect over and above the TRILLIONS that the federal government takes from its citizens already.

Posted by: nosuchthing | Jul 29, 2008 6:05:56 AM

Wow, normally it's the commenters who have to be admonished to ROTF, not the blogger linking to the piece. It isn't a refutation, nor does it claim to be, of the 8 points, and, in fact, acknowledges some of them are pretty much correct.

Posted by: ghh | Jul 29, 2008 6:20:53 AM

Points taken. But at the same time, aren't certain assumptions logical, indeed necessary, when a proposed policy is left vague at best? Is a candidate permitted to "change" his tax policy platform only when he's called on it due to its intentional "all things to all people" ambiguity? As you see below, there appears to be wiggle room between the candidate's position and the "details [that] have emerged from the campaign"?

From the last paragraph of the Tax Foundation link:

"In the video, Mitchell assumes that Obama would impose a full 12.4 percentage point rate increase on high-income workers. However, while Obama may have waffled on this issue a few months ago, details have emerged from the campaign indicating that he would only raise the payroll tax (combined employer/employee) by 4 percentage points, as we blogged on earlier this month. Again, this doesn't make it a good policy necessarily, but the facts need to be set straight."

Posted by: edh | Jul 29, 2008 6:27:15 AM

How many trillions would that be, nosuchthing?

Looks to me like US federal tax revenues are less than 3 trillion a year...which is less than 10K per capita. Not that I enjoy paying federal tax, but still.

I think your hyperbole is showing.

Posted by: Fuzzy Curmudgeon | Jul 29, 2008 6:32:39 AM

I don't care how much debunking people do of these so-called malicious rumors, the fact of the matter is that Ob-ma plans on passing massive tax hikes across the board, period. And seriously, it can hardly be called a screed when at least seven of those eight points contain partial truths. The one about socialized medicine is, in fact, entirely true.
As for the gas tax, I guess you haven't been reading the news lately, you know the news about a particular Democratic congressman (as if party affiliation is necessary when discussing tax increases)who just happens to chair a particular committee making known his belief that a 10 cent per gallon tax increase was now unavoidably necessary; cutting wasteful spending never occurred to these bozoes, it seems. Given Obama's obvious fondness for tax hikes, I wonder how long he will resist that one. Not long I would imagine.

And since we are on the subject of energy, you know, the sector you claim Obama isn't going to hit the consumer with new taxes, didn't the worst president in American History (or the history of any country for that matter), Jimmy Carter, already try a windfall profit tax during his administration? We all know what a huge success that was.

There is almost no sector of American life that will go untouched by Ob-ma's desire to wring more money from the already hard-pressed taxpayers of this country. The last thing the economy needs now is a "change" candidate enacting redistributionist policies that hearken back to the New Deal era. I'm surprised the Democratic Party just doesn't cut the pretense and start asking for entire paychecks, only giving back what they decide not to use to buy them votes.
When will the people in Washington, particularly the Democratic Party, start laying off people's wallets? When will blogs like this quit trying to make massive, and unfair tax increases, seem palatable?

You know, now that I think about it, Ob-ma is being honest when he calls himself the candidate of change. Because change is all that will be left over from my paycheck if his policies are enacted.

Posted by: Mark | Jul 29, 2008 6:54:39 AM

I agree with SmokeVanThorn. As a refutation it's weak and in some cases totally misleading.
The fact is, that Obama is very hard to pin down an anything except "Hope and Change" and those are pretty much anything you want them to be.

Even his “out of Iraq in 16 months” is subject to about 4 different interpretations. If Obama is elected he will be able to claim he is carrying out his campaign pledge no matter what he does, even if he sends in more troops.

What is totally misleading is their comment on the Obama social security tax increase. Here is what they said on 7/25:
“…while Obama may have waffled on this issue a few months ago, details have emerged from the campaign indicating that he would only raise the payroll tax (combined employer/employee) by 4 percentage points, as we blogged on earlier this month. Again, this doesn't make it a good policy necessarily, but the facts need to be set straight.”

“Only 4 percentage points?” That’s what is so infuriating about people who advocate tax increases; the increase is only a percentage point here and a percentage point there … how can you object to so small a number? Pretty soon, all those percentage points add up to 100 percentage points. And an increase of 4 percentage points from a zero base (the current rate over $102,000) is a whopping increase. For someone earning $500,000 their combined payroll tax would increase from $12,648 to $22,648. By my math that’s a 79% increase.

Posted by: Moneyrunner | Jul 29, 2008 6:58:24 AM

Let me clarify two things.

First, the first four e-mail claims are outright lies, and I correct them, especially the most important one which claims that Obama would double your income tax burden. Therefore, to say that my blog post doesn't refute anything is nonsense.

And second, being an economist (known for always saying "it depends"), I acknowledge that a cap and trade system is an implicit tax. Therefore, in some of the e-mail claims that address energy, I explain how the e-mail claim is misleading yet can't be totally dismissed. But I also point out that Sen. McCain favors a cap-and-trade system too.

Posted by: Gerald Prante | Jul 29, 2008 7:47:21 AM

Only Three Trillion Dollars. A mere bag of shells.

Posted by: Fat Man | Jul 29, 2008 8:42:02 AM

Obama's words can never be trusted (or any politician's, for that matter -- though there are different degrees of untrustworthiness). He changes tunes every two minutes, and throws people under the bus when they outlive their usefulness to him. His upbringing and voting records speak louder -- he's basically a hardcore communist. (Read this IBD editorial.) Whenever this country moves in the socialist direction, taxes increase, directly or indirectly, and the economy suffers. Thus I will not be surprised if Obama as president with a Demo-controlled congress taxes us ordinary people to unspeakable misery, while they and their super rich friends (e.g., Soros) continue to enjoy their plunder.

Posted by: Auffie L. | Jul 29, 2008 9:24:39 AM

Bottom line- Obama wins, taxes go up.

Posted by: dualdiagnosis | Jul 29, 2008 9:54:39 AM

Gerald Prante's continues to be unpersuasive. The first four claims he purportedly refutes are not "outright lies": at worst they are slight oversimplifications of the basic truth. (For example, Obama will indeed raise taxes on home sales and estate taxes.) Compared to the oversimplifications found in a typical political speech, the email stands up pretty well.

Posted by: y81 | Jul 30, 2008 3:41:47 AM

Would Obama tax all homes sales 28 percent? No.

Would Obama fully reinstate the estate tax and is McCain's estate tax rate zero? No.

Are the income tax change figures cited in the e-mail true? No.

Would Obama raise the tax rates on dividends to 39.6 percent? No.


Seems cut and dried to me that these are lies.

Posted by: Gerald Prante | Jul 30, 2008 7:15:25 AM