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Truth-testing Obama's tax plan
Barack Obama speaking about his tax plan.
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Kai Ryssdal: In the world of Presidential politics, today was tax day. Barack Obama's economic team released some new details about his tax plan. He's already said he wants to cut taxes for those making less than $250,000 a year. Today, he told us how and how he's going to pay for it: with the help of those making more than $250,000 a year.
Marketplace's Jeremy Hobson spent some time seeing if the numbers really add up.
Jeremy Hobson: Barack Obama has finally decided how much he would increase the tax on capital gains and dividends. He wants to bring both to 20 percent. That's up from the current 15, but still less than the rate was under President Clinton. And it's only for families earning over $250,000 a year, the only ones who would pay more taxes if Obama wins. Still, McCain economic advisor John Taylor says boosting taxes -- even just for the wealthy -- would hurt the economy.
John Taylor: The U.S. economy is in a weak state. This is not the time to be raising anybody's taxes.
On both sides, the focus definitely seems to be more who can cut your taxes, than who can balance the budget. Here's Obama's economic advisor Austan Goolsbee.
Austan Goolsbee: We've dug a very deep fiscal hole in the last eight years. Barack Obama will reduce the deficit. That is different from steering us to a rapidly balanced budget.
Eric Toder of the non-partisan Tax Policy Center says Goolsbee's right -- the Obama plan would reduce the deficit, but not if you assume the Bush tax cuts would expire, and Congress hasn't yet figured out a way to pay to extend them.
Eric Toder: However, if you're comparing it to what they want us to compare it to, which is supposing the Bush tax cuts were extended and supposing Congress keeps raising the exemptions on the alternative minimum tax so it doesn't hit any more people than it does today. Well, relative to that situation, they're going to raise some revenue.
But as the Obama team would remind you, their plan is still a net tax cut.
In Washington, I'm Jeremy Hobson for Marketplace.
About the author
Jeremy Hobson is host of Marketplace Morning Report, where he looks at business news from a global perspective to prepare listeners for the day ahead. Follow Jeremy on Twitter @jeremyhobson
To Ms. Betty Blalock, who wrote "Obama is NOT clear on what income level he considers mid-level, meaning above $60,000/year?" The page you've posted this on specifies: "he [Obama] wants to cut taxes for those making less than $250,000 a year... with the help of those making more than $250,000 a year." I'm not sure what you mean by "mid-level" since most people refer to "tax brackets" but as I said, it's clear where tax changes happen, they happen at $250,000. Hsve to say, my only question was whether or not the entire tax increase on those making more than $250K was coming from the Capital Gains, or if there were other increases. Still, just bumping up Capital Gains isn't such a tough pill to swallow, I invest a small amount of cash myself, I can handle paying another 5% if it means we can get some financial relief for so many suffering families.
A great many pro-Obamas are converting to McCain because Obama is NOT clear on what income level he considers mid-level, meaning above $60,000/year? This is what we are hearing/reading. It is confusing - Obama MUST GIVE THE AMERICAN PEOPLE A CLEAR, PRECISE DESCRIPTION OF HIS TAX PLAN. HE IS BEING TOO VAGUE. THAT IS NOT GOING TO GET IT.
