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Obama Outmaneuvers McCain on Taxes

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October 28, 2008 9:26 PM

ABC News' Teddy Davis, Rigel Anderson, and Arnab Datta Report: With one week to go until Election Day, the McCain campaign finds itself in an uncomfortable position on taxes.

According to the latest polling by ABC News, Obama currently maintains a ten-point lead over McCain on an issue which Republicans typically own. 

The last Democratic candidate for president to have that kind of lead was Bill Clinton in 1992.

As George Stephanopoulos noted on the Tuesday edition of “World News with Charles Gibson,” “When Democrats win on taxes, they tend to win elections.” 

So how did Obama get the upper hand?

For starters, he went beyond the targeted tax cut approach of Democrats Al Gore and John Kerry and hammered home the message that his plan would cut taxes for “95 percent of Americans.”

The key to this promise is his sweeping proposal to offer a rebate for payroll taxes of $500 for individuals and $1,000 for couples which starts to phase out for couples at $150,000 or for non-joint filers at $75,000 per year.

Second, he promised individuals making less than $200,000 and couples making less than $250,000 that they will not see their taxes go up.

Third, when McCain and RNC began pounding Obama for backing a budget blueprint which envisioned higher taxes on Americans making as little as $42,000 per year, the Obama campaign circulated reports by FactCheck.org saying: “No taxes were increased, and the vote that the McCain campaign refers to could not by itself have resulted increase on anybody.”

And finally, Obama had the good fortune of running against a GOP opponent who could be portrayed as favoring a new broad-based tax on the middle class.

Non-partisan experts say that the refundable heath-care tax credit proposed by McCain would (at least initially) result in a lower tax bill for most Americans. 

Obama understood, however, that voters are more attuned to what they stand to lose than what they stand to gain. With that in mind, Obama ran a series of ads which eviscerated McCain for wanting to end the income tax deduction for employer-provided health care.

All four of these points have helped Obama gain the upper hand in the debate over taxes.

He even looks good relative to McCain on the issue of the deficit: according to the non-partisan Tax Policy Center, over a ten-year period, McCain’s tax policies would lead to $1.6 trillion more in debt than Obama.

(Obama’s tax policies would add $3.5 trillion to the debt; McCain’s tax policies would add $5.1 trillion to the debt over ten years).

While Obama appears to have outmaneuvered McCain on taxes, some of the Illinois Democrat's own backers are wondering if he will face a situation similar to Bill Clinton in 1992. The newly elected Democratic president found it difficult to keep his promise to cut middle class taxes, boost public investment, and cut the deficit at the same time.

Harvard Prof. John White, an Obama supporter who wrote Perot’s ’92 balanced budget plan and later endorsed Clinton, thinks the Democratic nominee is going to have trouble cutting taxes and increasing public investment once the government is done bailing out the banking and auto industries.

“He is going to be told that the deficit is too high,” White told ABC News. “I think he is in a real box.”

October 28, 2008 in McCain, John, Obama, Barack | Permalink | User Comments (133)

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Mr. Obama lies a lot, almost 9 out of 10 times.

Posted by: young_voter | Oct 28, 2008 9:29:29 PM

The media bias is awful! That being said, I want to point you to a video that is important for all women to see. I am a former democrat now independent who is voting for McCain/Palin.

If you go to You tube and then after the .com/ paste watch?v=dHxT5UjKWe0&eurl=http://www.noquarterusa.net/blog/ you will see a video that may change your vote.

I am sick of corruption and sexism ruining women's chances.


I am only 30 and yet I have seen young men get promoted over women who were more qualified, time and time again.


During the primaries I saw this happen to Hillary Clinton. Not only was the media overwhelmingly sexist but the democratic party was too. In addition ACORN and the Obama team participated in voter fraud and completely took over the caucuses.

My vote for McCain was initially a protest vote against Obama's corrupt rise to the top. Then, I saw the way that Palin was treated by the press. The sexism was disgusting.

Obama has close to ZERO experience and has done nothing to create real change in the country but he did have a lot of time to prepare to run for office, so he has all the right answers. Palin had no time to prepare. Even though she has executive experience, and Obama has none, the media accused her of being unqualified to be VP.

The difference is the brilliant marketing strategy of DAVID AXELROD. He has marketed Obama as this brilliant leader who will fix all of the country's problems. How? We don't know because his vision of "Hope" and "Change" is vague enough to let people believe that their "hope" and "change" is the same as Obama's. Then you have the celebrity endorsements. Those are priceless. Oprah made Obama what he is today. Obama is like the hot new product that is flying off the shelf because Oprah said it is good. The problem is people forgot to read the fine print. "* Experience and judgment not included, corruption included in every box."

I guess that is all I have to say for now. I just hope that I can change at least one vote.

I am a woman and a former democrat who is proud to vote McCain/Palin

Posted by: emma | Oct 28, 2008 9:29:56 PM

LA Times Refuses to Release Tape of Obama Praising Controversial Activist

The Los Angeles Times is refusing to release a videotape that it says shows Barack Obama praising a Chicago professor who was an alleged mouthpiece for the Palestine Liberation Organization while it was a designated terrorist group in the 1970s and '80s.
According an LA Times article written by Peter Wallsten in April, Obama was a "friend and frequent dinner companion" of Rashid Khalidi, who from 1976 to1982 was reportedly a director of the official Palestinian press agency, WAFA, which was operating in exile from Beirut with the PLO.

http://www.latimes.com/news/politics/la-na-obamamideast10apr10,0,1780231,full.story

Does the man have anyone in his life that isn’t controversial?

He is not what he pretends to be.

Posted by: HH | Oct 28, 2008 9:32:48 PM

And for a second I thought you wrote "I am a former woman amd a democrat." Silly me.

Posted by: mortimer snerd | Oct 28, 2008 9:46:31 PM

HH, you don't have all the facts. Google the Rashid Halidi name and see what McCain did to help fund his cause.

Then get back to us.

Posted by: Majus | Oct 28, 2008 9:48:49 PM

Update America:

Investors Flee From 'Change' Obama Hypes
By JACK KEMP AND PETER FERRARA | Posted Monday, October 27, 2008 4:30 PM PT
Are Barack Obama's proposed tax increases adversely affecting our financial markets? We say yes, unambiguously. The senator has done a masterful job distracting attention from his tax increases with his $500-per-worker tax credit supposedly for 95% of Americans.
Obama has also set forth more than half a dozen additional refundable income tax credits targeted to low- and moderate-income workers for child care, education, housing, welfare, retirement, health care and other social purposes.

These tax credits are devised to phase-out based on income, which will ultimately increase marginal income tax rates for middle-class workers. In other words, as you earn more, you suffer a penalty in the phase-out of these credits, which has the exact effect of a marginal tax rate increase. That harms, rather than improves, the economy.

With the bottom 40% of income earners not paying any federal income taxes, such tax credits would not reduce any tax liability for these workers. Instead, since they're refundable, they would involve new checks from the federal government.

These are not tax cuts as Obama is promising. They are new government spending programs buried in the tax code and estimated to cost $1.3 trillion over 10 years.
Obama argues that while these workers do not pay income taxes, they do pay payroll taxes. True, but his planned credits do not involve cuts in payroll taxes. They are refundable income tax credits designed to redistribute income and "spread the wealth."
Meantime, Obama has proposed effective tax increases of 20% or more in the two top income-tax rates, phasing out the personal exemptions and all itemized deductions for top earners, as well as raising their tax rates.

He wants a 33% increase in the tax rates on capital gains and dividends, an increase of 16% to 32% in the top payroll tax rate, reinstatement of the death tax with a 45% top rate, and a new payroll tax on employers estimated at 7% to help finance his health insurance plan. He's also contending for higher tariffs under his protectionist policies.

Finally, he would increase corporate taxes by 25%, though American businesses already face the second-highest marginal tax rates in the industrialized world, thus directly harming manufacturing and job creation while weakening demand for the dollar.

Obama argues disingenuously that his tax increases would only affect higher-income workers and "corporate fat cats." But it is precisely these top marginal tax rates that control incentives for savings, investment, entrepreneurship, business expansion, jobs and economic growth. While he wants to tax the rich, the burden will fall on the poor and the middle class.

In their new book, "The End of Prosperity," Art Laffer, Steve Moore and Peter Tanous argue that the threat of this tax tsunami is already destabilizing our financial markets and causing capital flight from America.

They write, "Hot capital is escaping over the borders out of the United States and flowing into China, India, Europe, and even Japan. . . Starting in late 2007, foreigners started pulling their money out of the United States, and Americans started investing more abroad. Global investors are losing confidence in the U.S."

The American economy was in shambles when Reagan entered office in 1981. Inflation had soared by 25% over the prior two years, unemployment was heading toward 10%, the prime interest rate hit 21%, poverty was on a 33% upswing and real family income had decreased by almost 10% due to the stagflation of the late 1970s.

Reagan cut the top income-tax rate from 70% to 50%, adopted an additional 25% across-the-board rate cut and sliced capital gains taxes in half. The 1986 tax reform left us with just two tax rates of 15% and 28%. Reagan slashed spending growth, lowered tariffs, reduced regulatory burdens and promoted anti-inflation monetary policies.

The result, the authors explain, was actually a 25-year, noninflationary economic boom, with only two brief, mild recessions in 1990 and 2001. "We call this period, 1982-2007, the 25-year boom — the greatest period of wealth creation in the history of the planet," they write. "Adjusting for inflation, more wealth was created in America in the 25-year boom than in the previous 200 years."

By 1989, the economy had grown by almost one-third, the equivalent of adding the entire economy of West Germany to our U.S. economy. In 1984 alone, real economic growth boomed by 6.8%, the highest in 50 years. Nearly 20 million new jobs were created in the 1980s, increasing U.S. civilian employment by almost 20%. Unemployment fell to 5.3% by 1989.

Spectacularly, inflation was slashed to 3.2% by 1983. The prime rate fell to 6.25% by 1992, even though opponents had argued that Reagan's tax cuts would increase interest rates. Family income reversed its decline, poverty reversed its rise and tax revenues actually doubled.

This is the "Change We Need" today.

http://www.ibdeditorials.com/IBDArticles.aspx?id=309998514066924

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
IBD Tells It Like It Is. Do NOT Give The Democrats Complete Government Control.

Posted by: Update America | Oct 28, 2008 10:00:50 PM

ABC WORKS FULL THROTTLE FOR OBAMA..
NO QUALMS, NO RESERVATIONS, NO SHAME..
EVERY HEADLINE ON OBAMA IS POSITIVE.. 3 TIMES day you run headlines on gov Palin that are all negative.

Posted by: TJ, THE CLINTONITE | Oct 28, 2008 10:01:46 PM

Update America:

Obama supporters fail to tell everyone about this Obama $500,000,000 failure that did not give the deserving voters in the 13th district good safe housing.

Where did all the money go? I guess all the money went to the contactors and nothing went into corrupt pockets.

http://www.boston.com/news/nation/articles/2008/06/27/grim_proving_ground_for_obamas_housing_policy/?page=1

http://rezkowatch.blogspot.com/2008/03/follow-money-more-on-rezkos-slum.html

Posted by: Update America | Oct 28, 2008 10:05:11 PM

So he's bribing me for my vote?

http://www.washingtonpost.com/wp-dyn/content/article/2008/10/28/AR2008102802955.html

We've heard a lot this month about how Sen. Barack Obama's tax plans would affect Joe the Plumber -- the Ohio man who recently asked the Democratic nominee whether Obama planned to raise his taxes. Opponents of Obama seized on the incident to argue that his middle-class tax cuts are a scam. Some have even claimed that he has proposed tax increases for people with incomes as low as $32,000. Obama's supporters responded that the tax cuts are real (and noted that Joe is not a licensed plumber). The entire episode has only added to the confusion over what Obama is proposing for middle-class taxes.

How should an honest fiscal conservative see the situation? For those making less than roughly $200,000 ($250,000 for couples), Obama would not only make President Bush's tax cuts permanent but would also offer an array of new tax credits. Nobody should deny this.

To be sure, these "tax cuts" contain some sleight of hand. More than $400 billion of the money over the next 10 years would take the form of refundable tax credits paid in cash to people who already pay no federal income tax. It would be more accurate to refer to these cash outlays as cuts in payroll tax or -- even more accurately -- as transfer payments. Regardless of what the credits are called, though, they would put more money in the pockets of some American families. That sounds great in these tough economic times. Who can be against a boost to spending power and consumption?


We can. While a few of Obama's proposals may be sensible, the overall package would be bad for the economy. Unlike rate cuts for high incomes or reductions in investment taxes, most of Obama's proposed tax cuts would do little to reduce the tax penalty on work and saving. For some households, the penalty on work and saving would even increase because the new tax credits would be phased out as income rises. These proposals wouldn't deliver the economic growth that incentive-based tax cuts would.

Furthermore, there is no free lunch. Obama's middle-class tax relief would have to be paid for, either now or later. Middle-class tax cuts might make sense if they were paid for by spending cuts, but that is not Obama's plan. Like his opponent, Obama points to vague savings from reducing waste, the kind of savings that never seem to materialize. He also hopes to reap savings by accelerating our redeployment from Iraq, a project with an uncertain fiscal impact. At the same time, he proposes a wave of new spending on health-care, education, energy and infrastructure programs and declares his opposition to reforms that would reduce the growth of Social Security and other entitlement benefits.

So where would the money come from for the tax cuts and new spending? Largely from raising other taxes: the ones that have the biggest impact on economic growth. Obama would let key parts of the Bush tax cuts expire, causing the top tax rate on ordinary income to go back to 39.6 percent, up from 35 percent today. The capital gains and dividend tax rates would rise to 20 percent from today's 15 percent. Obama might also impose Social Security tax at a rate of up to 4 percent on wages and self-employment income above $250,000, starting in 2019.

These tax increases are not as bad as some Obama statements during the Democratic primaries suggested they would be, and they fall well short of what some of his conservative critics claim. For example, Obama does not propose to tax dividends at 40 percent or to impose the full 12.4 percent Social Security tax on high earners.

His real proposals, however, would still be plenty damaging. If rewards for America's entrepreneurs and firms are reduced through higher marginal tax rates, their incentives to earn, invest and create jobs will be diminished. Americans will have less incentive to save, and firms will have less incentive to pay dividends. Tax avoidance will become more profitable. A smaller capital stock will mean a less productive economy and lower wages for middle-class and other workers. These disincentive effects also mean that the revenue gain is likely to be smaller than Obama envisions.

In sum, Obama may very well give Joe the Plumber a tax break, but only if Joe does not become too successful. Obama is offering real tax favors for the middle class, but not real benefits for the economy.

Posted by: Brad in FL | Oct 28, 2008 10:06:56 PM

Update America:

Obama’s Hawaii Trips Cost More Than Palin’s Clothes
Sunday, October 26, 2008 3:21 PM

By: Ronald Kess

Barack Obama’s trips to Hawaii on a chartered Boeing 757 each cost more than twice the price of Sarah Palin’s new clothes.

Brad Blakeman, who was in charge of scheduling for President Bush, says a Boeing 757 costs about $20,000 an hour for fuel, crew, and maintenance. Since a trip to Hawaii entails 10 hours of flying time from Chicago, the total cost for each round-trip comes to about $400,000.

Obama used the Boeing 757 for trips to Hawaii over the summer for a vacation and again last week to see his failing grandmother. Admirable though that visit was, “By Obama using a private jet to go on a purely personal visit to see his grandma, he’s wasting not only energy, but he’s using the money that his supporters have given him for campaign purposes,” Blakeman says. “It’s a purely personal visit paid for with campaign funds.”

On the other hand, the media are highlighting the Republican National Committee’s purchase of $150,000 in clothes for Palin, even though the dresses will be donated to charities. The New York Times played the story on page one.

“They’re picking on Palin, who was provided a wardrobe by the RNC strictly for political purposes, and it was always intended that these garments would be then given to charity,” Blakeman says. “So there’s a benefit that’s going to charity, not a benefit that Palin will have after the election. There was a need for it because she’s a modest person who didn’t have an extensive wardrobe to do 24/7 campaigning.”

To pick on Palin without going after Obama’s plane trips is “an absolute journalistic abuse,” Blakeman says. “This is the same plane that he took to Hawaii when he went on vacation. In the summertime, when gas was soaring and Americans were having to pinch their pennies, this guy gets on his campaign plane and goes to Hawaii on vacation. He did a couple campaign stops in a state that is not a swing state and is a guaranteed win for Obama. That was clearly to cover the tracks of this vacation.”

Blakeman notes that at the height of the gasoline price surge, Obama suggested that Americans check their vehicle’s tire pressure as a way of conserving fuel.

“I wonder if he checked the tires on his jumbo jet before taking off for a purely personal visit?” Blakeman says. “The way he spends campaign money is a direct reflection of how he will spend ours. He could have easily flown commercial or taken a much smaller corporate aircraft that would cost a fraction of a 757.”

Ironically, it was Palin as governor who saved money for Alaskans by selling the state’s jet and instead flying commercial.

Kellyanne Conway, one of the most respected Republican pollsters, says the media’s attack on Palin’s clothes is an example of elitist snobbery or “classism.” Noting the media’s treatment of her, “I can’t believe her own family still approves of her, after the unprecedented, personal and relentless attacks that this woman has undergone,” Conway says.

Besides attacks on Palin over her clothes, Conway cites snide remarks about “the way she speaks, her husband’s lack of a college degree, the barefoot and pregnant 17-year-old daughter, you know who hunts moose anyway? The classism is so raw and unapologetic, so unconsidered and so undisguised.”
Ronald Kessler is chief Washington correspondent of Newsmax.com.

Posted by: Update America | Oct 28, 2008 10:09:21 PM

Obama is gonna win folks so you can cut down on the made-up hysteria. Some of you are really reaching......still blaming the media and everyone else for the failed McPalin failin ticket

Posted by: seansatx | Oct 28, 2008 10:11:24 PM

McCain is and looks so foolish at his rallies. What a desperate old man who looks like he doesn't have a clue what is going on around him. He couldn't speak in the rain today. I bet his wife canceled that rally.

Posted by: democratic | Oct 28, 2008 10:12:18 PM

Hey Emma, are McCain and Palin going to support my right to choose? No? Then they'll never be pro-women enough for me. And they have NOTHING in common with Hillary Clinton, so don't bring her into this. If you want to vote against your own interests and vote for McCain fine, that's your choice, but don't drag women into this. Because I couldn't have less in common with McCain/Palin.

Posted by: notadino | Oct 28, 2008 10:15:45 PM

Are you cynics still whining with defeat looking you right dead between the eyes?

I wonder what level of whining will manifest itself once Obama has drank all of your little political milkshakes down to the last drop. THEN WHAT?

You keep whining while we keep WINNING.

See you at the inauguration McChicken Fans..

POTUS OBAMA - Making History on Your A**!

Posted by: Malcom Z | Oct 28, 2008 10:17:58 PM

I am a former democrat too who has seen the light and it isn't Barrack Obama. He is the most cunning, smooth talking candidate I have ever had my displeasure to watch. I am amazed at the number of people who idolize him and would immortalize him if they could. Unfortunately, America will have a really sad awakening if he is elected. Too many people are drinking the Obama kool-ade.I don't really understand how so many people have fallen under his spell and have been taken in. Mark my word, he will out into the Supreme Court judges who are radicals and far-left thinkers. If he wins, his tax ideas will move us from a recession into a depression like we have never seen before. Please, wake up America.

Posted by: Fran | Oct 28, 2008 10:18:03 PM

Here's something from April 2008 that shows how "pro-woman" McCain is:


McCain: Women don't need equal pay

The presumptive Republican nominee said the 'Ledbetter Fair Pay Act' -- which allows women to sue their employers for pay discrimination -- 'opens up to lawsuits for all kinds of problems'.

"They need the education and training, particularly since more and more women are heads of their households, as much or more than anybody else; and it's hard for them to leave their families when they don't have somebody to take care of them," explained the 71-year-old senator.

"It's a vicious cycle that's affecting women, particularly in a part of the country like this, where mining is the mainstay; traditionally, women have not gone into that line of work, to say the least," he added.

Senior Democrats have criticized McCain for opposing the bill, saying the defeat of the bill 'has thwarted efforts to restore balance in the law and allow victims of wage discrimination to seek justice in the courts'.


Posted by: notadino | Oct 28, 2008 10:19:07 PM

I absolutely love to see cynics on their knees attempting to reach for straws that just happen to be on the back of a 8 foot Clydesdale. HIGH, ISN'T IT?

Keep reaching suckas. You'll only pull air. Thinking of swinging like McChicken? He reminds me of a drunk sailor swinging aimlessly at the air and inadvertantly smacks himself in the face.

That's been his whole campaign. PITIFULL. He'll go down as the laughing stock of all Presidential campaigns.

POTUS OBAMA - KEEP REACHING SUCKAS

Posted by: Malcom Z | Oct 28, 2008 10:23:11 PM

MY FELLOW PRISONERS......

Please line up, hold hands and sing together.......

Row, row row your boats, gently to DEFEEEEEAT!

Merrily merrily merrily merrily, John MCcain is who you don't want to BEEEEEEEEE!

POTUS OBAMA - IT'S A LOCK!

Posted by: Malcom Z | Oct 28, 2008 10:26:10 PM

Republicans are much, much better at handling money than democrats. For instance, republicans know that spending 150,000 on clothing like $2500 silk Valentino blazers is exactly what poor women who get their clothes from charity need. Yes, that silk jacket will look excellent when she goes to work at her minimum wage job. Especially if it's Mcdonalds - that lovely cream color will look nice with fry grease on it. Plus every poor woman just loves the exorbitant dry cleaning bills that come with silk clothing, and all high-end designer clothing. She'll be happy to spend her entire day's wages just to dry clean her clothing. And to think that dems would have shopped at Macy's for a respectable $80 blazer and saved $2420, perhaps to feed some kids or something else stupid like that.

I hate democrats because of that.

Posted by: robthomaseyes | Oct 28, 2008 10:26:34 PM

In the economic climate we face, Obama's tax cuts are needed more than ever, for struggling families and to help stimulate the economy.

It is unfortunate the McCain campaign has become so desperate. There are not many plumbers who make over 250,000 dollars a year, but the Republicans use him to pretend Obama will hit ordinary workers and trades people.

Of course multi-millionaire McCain who cannot even remember how many houses he owns probably never deals with plumbers who make under quarter a million - after all his own campaign gave Palin a hairdresser that charged 34,000 for just two weeks work.

Posted by: Tommy Ross | Oct 28, 2008 10:28:47 PM

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