The Tax Policy Blog

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 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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October 23, 2008

As discussion on taxes heats up in the Presidential campaign, today's Wall Street Journal devoted much of its space (in the news and opinion sections) on the substance and messaging the tax debate.

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October 23, 2008

Wyoming has the best, and New Jersey has the worst, tax systems when it comes to "business friendliness," according to the Tax Foundation's recently completed 2009 State Business Tax Climate Index, a ranking of the 50 state tax systems that provides a roadmap for state lawmakers concerned with keeping their states tax-competitive. Keeping a state competitive in today's global marketplace can be difficult, but there is one factor lawmakers have direct control over: the quality of...

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October 23, 2008

Tomorrow at AEI, the Tax Foundation and AEI are jointly hosting an event that takes a look at the issue of progressive consumption taxes. The Tax Foundation's Bob Carroll will be a discussant, as will Tax Policy Center's Len Burman. Burman has a new tax reform proposal that is rather bold, but would move the tax code in the direction that it needs (broader tax base and lower marginal rates). Here are some of Burman's tax reform's main features courtesy of the...

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October 23, 2008

Sen. Barack Obama has an ad running that tries to paint John McCain as a clone of George Bush. On the issue of taxes, the ad says this:

"Tax breaks for big corporations and the wealthy. But almost nothing for the middle class — same as Bush."

First, the claim that tax breaks for big corporations don't flow to the middle class is factually incorrect. All taxes are paid by people and all tax cuts flow to people, including those legally remitted by...

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October 22, 2008

In an essay in today's Wall Street Journal titled "Obama and the Tax Tipping Point," economist Adam Lerrick wonders "what happens when the voter in the exact middle of the earnings spectrum receives in benefits from Washington than he pays in taxes?"

Lerrick suggests that Obama's "gift-wrapped packets of money in the form of refundable tax credits" will push the balance past the tipping point where the majority of Americans will receive more in government benefits than they pay in...

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October 22, 2008

We will be co-hosting a conference with our friends at AEI this Friday, October 24 to talk about a proposal analyzed by the President's Advisory Panel on Federal Tax Reform that would replace most of the federal income tax with a progressive consumption tax. Here are the details:

  • WHAT: Progressive Consumption Taxation - Can It Be Done? Should...
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