The Tax Policy Blog

October 29, 2008

"Under democracy one party always devotes its chief energies to trying to prove that the other party is unfit to rule - and both commonly succeed, and are right."

H.L. Mencken, Minority Report (The Johns Hopkins University Press, 1997 [1956]), p. 222.

(Hat tip Professor Boudreaux)

October 29, 2008

Barack Obama's admission that his policies would "spread the wealth around" has ignited a nationwide discussion of how progressive the tax system should be and how it should be used to redistribute income among Americans.  Obama has been very successful in bolstering the conventional wisdom that the U.S. tax system does not place a significant enough burden on wealthier households and places too much of a burden on the "middle class."

But a new study on inequality by researchers at...

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October 28, 2008

Senator Obama has accused Senator McCain of wanting to reward corporations for outsourcing American jobs. Senator McCain replies that his plan to cut the corporate tax rate for American companies will make the U.S. a more profitable place to locate facilities, deterring outsourcing. Which is right?

CNN's Truth Squad concluded, "McCain is not proposing anything that would qualify as more tax cuts for outsourcing." Here's the...

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October 28, 2008

This morning, Tax Foundation Senior Economist Gerald Prante appeared on Fox Business to discuss the presidential candidates' tax plans.

...

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October 28, 2008

So today in a speech to a Pennsylvania crowd, Obama said this:

Now, in the closing days of this campaign, my opponent is trying to distance himself from the President he has faithfully supported 90% of the time. He’s supported four of the five Bush budgets that have taken us from the surpluses of the Clinton years to the largest deficits in history. John McCain has ridden...

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October 27, 2008

Two op-eds from the Tax Foundation today.

Vice President for Economic Policy Robert Carroll, Ph.D., gives a great explanation of why "Almost Everyone Would Do Better Under the McCain Health Plan" in today's Wall Street Journal. What kind of effect might this proposal have?

"Based on estimates by career economists in the Treasury...

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October 27, 2008

A new John McCain ad out makes this claim:

I know your life savings have been hit hard, but we'll rebuild them.

Barack Obama wants to increase taxes on your savings.

You can't afford that.

He's quite a talker.

But that's just bad judgment.

So would Obama increase taxes on your savings? Maybe. In terms of direct tax increases on your savings, Obama's tax plan (as stated now) would likely not increase your taxes on...

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October 27, 2008

There has been a lot of talk lately about redistributing income, and whether or not raising taxes on high-income people to give tax credits (which are essentially the equivalent of government spending) to lower-and middle-income households is proper fiscal policy.

McCain and his campaign have had lots of labels for it over the past few weeks: redistribution, welfare, socialism, handouts, etc. Obama himself has said he favors "sharing the wealth." So let's get to the heart of the...

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October 27, 2008

Good Monday morning. The blogosphere has been kind to the Tax Foundation's work on federal and state issues this past week. Here are the best hits:

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October 26, 2008
  • Obama's McCain-Bush Ad More of the Same: Falsehoods and Misleading: All taxes are paid by people and all tax cuts flow to people, including those legally remitted by businesses (such as corporations). How much is paid by the "middle class" depends on questions of economic incidence of the corporate income tax, but it's not nothing. Now regarding the claim that McCain's tax cuts and Bush's tax cuts provide no relief to the...
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October 25, 2008

What is worse than candidates spreading falsehoods about their own tax plans and that of their opponents for over four months? A candidate then accusing his opponent of putting out misleading ads. From Obama's prepared remarks at a speech in Indiana today:

Because one thing we know is that change never comes without a fight. In the final days of campaigns, the say-anything, do-anything politics too often takes over. We've seen it before. And we're seeing it again today...

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October 25, 2008

Many major newspapers are reporting on a financing crisis that is hitting many transit systems in the United States this week. The situation is a result of (1) a series of leaseback transactions these agencies conducted, (2) federal policy to first encourage and then discourage them, and (3) the collapse of insurer AIG.

When a private company builds an asset, they are permitted under federal income tax law to deduct from their taxes the depreciation (wearing out) of the...

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October 24, 2008

A Tax Foundation Working Paper published in April 1987 and recently added to our online archives, titled "More Battles over Tax Burdens," sounds strikingly similar in many places to some of the tax talk we've been hearing during this election season (and during most recent election seasons, actually). Here's an excerpt:

1. Because of the deficit and other factors, there will be a continual testing of sentiment to retain or raise top marginal tax rates.

2. The...

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October 24, 2008

The Washington Times is reporting on its website the views towards taxation of the now famous Joe the Plumber:

During his brief discussion with Mr. Obama on Oct. 11, the candidate told the plumber, who had said he hoped to own his own company some day, that it was his intention to, as president, "spread the wealth around."

Mr. McCain has called the pledge...

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October 23, 2008

TaxProf Blog covers the main points regarding whether the $153,340 in clothing, hair care, and makeup received by Sarah Palin from the Republican National Committee over the last few months is taxable income. Bloomberg also has a well-written article.

The Internal Revenue Code allows a...

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