Friday, October 17, 2008

The tax case and the economy craps out

The Progress Report:

President Bill Clinton decided early in his term in office that expanding the middle class -- not tax cuts for the rich -- would be the engine of economic growth, while his successor, President George W. Bush, argued the opposite. But the as the results have shown, a progressive tax policy enacted by President Clinton achieved far superior results for the economy. By the end of Clinton's second term, unemployment stood at very low 3.9 percent while today it has risen over 6 percent. The poverty rate was lower in 2000 than it is today. The median household income (adjusted for inflation) was over $3,000 higher eight years ago. Bush inherited a $237 billion federal budget surplus, which he has turned into a $482 billion deficit (and growing fast). Building on this formula, the Center for American Progresss put forward a progressive, "comprehensive tax reform plan to restore fairness, simplicity, and opportunity to our tax system while generating the resources necessary to meet our nation's commitments," such as energy independence, education, and health care. In order to achieve these goals, the plan centers on increasing the take-home pay of those making under $200,000 a year, with those making more seeing an increase relative to the current tax policy.


Earlier this week, Fox News's Neil Cavuto summarized the right wing's fascination with Wurzelbacher. "You're the type of guy who these tax increases of [Obama's] could affect, or where the cut-off is could effect, and you don't fit this gazillionaire model," Cavuto told him during an interview. But according to tax analysts, the problem for McCain and the right in focusing on Joe the Plumber is that "the underlying premise that Wurzelbacher would face higher taxes under Obama is neither true nor typical of how the vast majority of small businesses would fare." Moreover, even if Wurzelbacher buys the business, it is "unlikely" that his purchase "would give him a taxable income of more than $200,000 -- leaving him unaffected by Obama's proposal." Even if he did earn $280,000 per year as he projected he might, Wurzelbacher "would pay just $773 more in taxes under Obama's plan than McCain's," hardly a crippling blow to his business. The Toledo Blade reports that Joe the Plumber currently earns well under $100,000 per year. In that case, he would save more under Obama's plan than McCain's. "Rather than a game-changing blow for the McCain campaign, 'Joe the plumber' is turning into a bad case of blowback,'' said Rogan Kersh, a public service professor at New York University.
As economy craps out, Las Vegas hurts. "When we talk about gambling, that's a word we don't want in our vocabulary."

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