BARACK OBAMA SUPPORTERS

Obama Cabinet Choices

Young Jeezy-MY PRESIDENT IS BLACK.mp3 (free click here to download)

. 95% of working families would have a tax cut under Obama's proposals. . 100 million Americans would have NO tax cut under McCain's proposals. . Most Americans would have a larger tax cut under Obama than under McCain. How will your taxes change if Obama or McCain is elected in November?
The Tax Policy Center, an independent, non-partisan group, has estimated how taxpayers' 2009 taxes will change under the next President. Answer a few simple questions to calculate the likely change in your tax bill in 2009:

1. What's your family's filing status?
Single

2. How many dependent children are in your family?
1

3. What's closest to your Adjusted Gross Income?
$25,000

Your Obama Tax Cut:
$480.98

This is $216.11 more than the $264.87 cut you will get from McCain.

These numbers come directly from calculations by the independent, non-partisan Tax Policy Center. They estimate that your taxes in 2009 will change by -$480.98 under Barack Obama and -$264.87 under John McCain. Click here to see the relevant table for your filing status. Tax cuts for Obama and McCain are calculated by adding the changes in income tax and corporate tax estimated by the Tax Policy Center.


1. What's your family's filing status?
One-Earner Married

2. How many dependent children are in your family?
2

3. What's closest to your Adjusted Gross Income?
$15,000

Your Obama Tax Cut:
$486.21

This is $467.52 more than the $18.69 cut you will get from McCain.

These numbers come directly from calculations by the independent, non-partisan Tax Policy Center. They estimate that your taxes in 2009 will change by -$486.21 under Barack Obama and -$18.69 under John McCain. Click here to see the relevant table for your filing status. Tax cuts for Obama and McCain are calculated by adding the changes in income tax and corporate tax estimated by the Tax Policy Center.


How will your taxes change if Obama or McCain is elected in November?
The Tax Policy Center, an independent, non-partisan group, has estimated how taxpayers' 2009 taxes will change under the next President. Answer a few simple questions to calculate the likely change in your tax bill in 2009:

1. What's your family's filing status?
Two-Earners Married

2. How many dependent children are in your family?
3-5

3. What's closest to your Adjusted Gross Income?
$25,000

Your Obama Tax Cut:
$1,887.98

This is $1,863.11 more than the $24.87 cut you will get from McCain.

These numbers come directly from calculations by the independent, non-partisan Tax Policy Center. They estimate that your taxes in 2009 will change by -$1,887.98 under Barack Obama and -$24.87 under John McCain. Click here to see the relevant table for your filing status. Tax cuts for Obama and McCain are calculated by adding the changes in income tax and corporate tax estimated by the Tax Policy Center.



Sarah Palin Misrepresents Obama's Tax Plan
Here's what Palin claimed in her address tonight:

The Democratic nominee for president supports plans to raise income taxes … raise payroll taxes … raise investment income taxes … raise the death tax … raise business taxes … and increase the tax burden on the American people by hundreds of billions of dollars.
What is the truth? A recent Wall Street Journal article by Obama's two top economic advisers gives a clear and complete description of Obama's complete tax proposal. Here is an excerpt:

... his plan would not raise any taxes on couples making less than $250,000 a year, nor on any single person with income under $200,000 -- not income taxes, capital gains taxes, dividend or payroll taxes.
....
As previously mentioned, the Obama plan is a net tax cut -- his middle-class tax cuts are larger than the rollbacks he has proposed for families making over $250,000. Sen. Obama would pay for this tax cut by cutting spending -- including responsibly ending the war in Iraq, reducing excessive payments to private plans in Medicare, limiting payments for high-income farmers, reducing subsidies for banks that make student loans, reforming earmarks, ending no-bid contracts, and eliminating other wasteful and unnecessary programs.
....
Do not take the critics' word for it.Look at the plans for yourself.

Barack Obama’s tax plan delivers broad-based tax relief to middle class families and cuts taxes for small businesses and companies that create jobs in America, while restoring fairness to our tax code and returning to fiscal responsibility. Coupled with Obama’s commitment to invest in key areas like health, clean energy, innovation and education, his tax plan will help restore bottom-up economic growth that helps create good jobs in America and empowers all families achieve the American dream.


Economists Support Obama Over McCain By More Than 2 to 1

The Truth on Taxes
• Obama: Tax cuts for 95% of working families
• McCain: NO tax cut for 100 million Americans
• Most would get a larger tax cut from Obama



Obama’s Comprehensive Tax Policy Plan for America will:
Cut taxes for 95 percent of workers and their families with a tax cut of $500 for workers or $1,000 for working couples.
Provide generous tax cuts for low- and middle-income seniors, homeowners, the uninsured, and families sending a child to college or looking to save and accumulate wealth.
Eliminate capital gains taxes for small businesses, cut corporate taxes for firms that invest and create jobs in the United States, and provide tax credits to reduce the cost of healthcare and to reward investments in innovation.
Dramatically simplify taxes by consolidating existing tax credits, eliminating the need for millions of senior citizens to file tax forms, and enabling as many as 40 million middle-class Americans to do their own taxes in less than five minutes without an accountant.
Under the Obama Plan:
Middle class families will see their taxes cut – and no family making less than $250,000 will see their taxes increase. The typical middle class family will receive well over $1,000 in tax relief under the Obama plan, and will pay tax rates that are 20% lower than they faced under President Reagan. According to the Tax Policy Center, the Obama plan provides three times as much tax relief for middle class families as the McCain plan.
Families making more than $250,000 will pay either the same or lower tax rates than they paid in the 1990s. Obama will ask the wealthiest 2% of families to give back a portion of the tax cuts they have received over the past eight years to ensure we are restoring fairness and returning to fiscal responsibility. But no family will pay higher tax rates than they would have paid in the 1990s. In fact, dividend rates would be 39 percent lower than what President Bush proposed in his 2001 tax cut.
Obama’s plan will cut taxes overall, reducing revenues to below the levels that prevailed under Ronald Reagan (less than 18.2 percent of GDP). The Obama tax plan is a net tax cut – his tax relief for middle class families is larger than the revenue raised by his tax changes for families over $250,000. Coupled with his commitment to cut unnecessary spending, Obama will pay for this tax relief while bringing down the budget deficit.


Impact of the Obama Tax PlanTAX CUT
Married Couple Making $75,000 with two children, one of whom is in college $3,700
[includes $1,000 Making Work Pay; $500 universal mortgage credit; and $4,000 college credit net of current college credits]
Married Couple making $90,000 $1,000
Single Parent making $40,000 with two young children and childcare expenses. $2,100
[includes $500 making work pay; $500 universal mortgage credit, and $1,100 from Obama expansion of the child care tax credit]
70-Year Old Widow Making $35,000 $1,900

Source: Calculations based on IRS Statistics of Income. Tax savings is conservative; does not account for up to $500 in savings from expanded Savers Credit and the $2,500 in savings per family from the Obama healthcare plan



McCain's Economist Supporters vs. Facts Over at MarginalRevolution, Tyler Cowen has posted the text of an email he received recently. It seems a number of prominent, right-leaning economists have endorsed John McCain's stated economic proposals. The list includes many of the usuals (e.g., Becker, Hassett, McCain chief economic adviser Doug Holtz-Eakin, Taylor, Harvey Rosen, Meltzer, etc.); the list is chock full of prominent economists who have earned their academic reputations. Here's the text that Cowen excerpted in his main post (the rest of the letter is posted in his comments section):


We enthusiastically support John McCain's economic plan. It is a comprehensive, pro-growth, reform agenda. The reform focuses on the real economic problems Americans face today and will face in the future. And it builds on the core economic principles that have made America great.

His plan would control government spending by vetoing every bill with earmarks, implementing a constitutionally valid line-item veto, pausing non-military discretionary government spending programs for one year to stop their explosive growth and place accountability on federal government agencies.

I've previously discussed the enormous increase in deficits that would be caused by McCain's tax proposals, as scored by Len Burman and Greg Leiserson of the Tax Policy Center. So let me focus on the second paragraph above, which is uniformly contradicted by both facts and experience:


His plan would control government spending by vetoing every bill with earmarks, Well, this one has already been repudiated by....John McCain's chief economic adviser, Doug Holtz-Eakin. I've already posted on this issue:
McCain has already had to change his "definition" of those nasty earmarks he'll eliminate (somehow, without a line-item veto). According to this story by the Politico's Ben Smith, Holtz-Eakin initially claimed that there were $100 billion in earmarks in the current budget, the idea presumably being that eliminating all of these earmarks would give McCain $100 billion to work with in paying for his tax cuts. After a former senior Democratic staffer, Scott Lilly, pointed out that many of these earmarks included stuff McCain supports, like money for Israel, Egypt and U.S. military construction, Holtz-Eakin stated that in fact the real amount of money associated with earmarks McCain would not fund (again, magically preventing them without a line-item veto) was only $16-18 billion.

implementing a constitutionally valid line-item veto... Clearly, this one is there to allow them to respond to criticisms, like the parenthetical reference in my earlier post, based on the fact that under current law, the President has no capacity to pick and choose which items to fund. President McCain will have to sign or veto actual statutes, not their components. Back in the first Clinton Administration, Congress enacted and President Clinton signed the Line Item Veto Act (LIVA) to change all this. Lawsuits ensued, and after some standing-oriented skirmishing, the case made its way up to the Supreme Court. In Clinton v. City of New York, the Court struck down LIVA as a violation of the Constitution's Presentment clause. For all you "judicial activism" buffs, the vote was 6-3, with Justice O'Connor in the minority but Chief Justice Rehnquist in the majority. So, even if you assume that both Justice Alito and Chief Justice Roberts would side with President McCain and his economists, the vote would still be 5-4 in the event of a redo. I am not a constitutional lawyer, but given my understanding of the Court's language in Justice Stevens's opinion for the Court, I find it very difficult to imagine that McCain and his lawyers (much less his economists) will be capable of "implementing a constitutionally valid line-item veto".


pausing non-military discretionary government spending programs for one year to stop their explosive growth... Gee, I hardly know where to begin on this one. First off, a one-year pause would do nothing to stop "explosive growth". It would reduce the level of spending, to be sure, but then that "explosive growth" would go right on happening. This is a mathematical principle of which each of the economist-letter's signatories no doubt is aware.

That said, this post over at CBPP is worth a look [Update: I see that Mark Thoma posted much of the CBPP post, which I should have noted was written by Richard Kogan, back in March]. It shows the following:


Domestic discretionary spending fell from 18.4% of all non-interest federal spending in 2001 to (an estimated) 14.7% in 2008. By comparison, defense and security spending (in which the CBPP includes DHS and Veterans' spending) rose from 21.7% to 29.2%.

The real, i.e., inflation-adjusted, growth rate of domestic discretionary spending over this period was 1.3%. That's hardly an "explosive growth" path; by comparison, defense/security increased 9.1%, while SS/Medicare/Medicaid increased 3.8%.
As a share of GDP, domestic discretionary spending actually fell, from 3.1% to 2.8%. That means that this category of spending has been becoming less, not more, burdensome. Defense/security rose from 3.6% to 5.6% of GDP over this period, while SS/M/M rose from 7.7% to 8.4%.

I am frankly baffled as to what my colleagues on the right are talking about when they discuss "explosive growth" in "nonmilitary discretionary government spending". The real money on the spending side is in the military and entitlement categories. Some of the increase in entitlements is demographically driven. But over the seven years of the Bush Administration, Republicans, with some substantial Democratic help, have voted for ginormous increases in military spending: the Iraq war needs no introduction. In terms of projected future spending, as opposed to spending that has already occurred, the biggest policy-based expansion of which I am aware was the Medicare Part D drug plan, which McCain did vote against (indeed, even tried to filibuster) and to which he has proposed some cuts via income-testing.


It is inconceivable that McCain will cut military spending substantially, given his simultaneous refusal to consider leaving Iraq until we have "won" and his willingness to stay for 100 years after the advent of said "victory". Moreover, even after we "win" or leave Iraq, one legacy of the wars in Iraq and Afghanistan will be substantial future expenditures to care for wounded and disabled Veterans.


Perhaps McCain does intend to broadly slash future entitlement spending; the economists' letter refers to "plans to address entitlement programs--especially Social Security, Medicare and other government health care programs". But apart from the Part D income-testing he has proposed, neither McCain nor these economists have said how or how much he will "address" entitlement programs. No one covering this race should grant a pass either to McCain or to his economist fans concerning this issue. There are real challenges facing Social Security, Medicare and Medicaid, but too many Americans depend on these programs to allow the sort of glib avoidance that the press granted George W. Bush on these issues in 2000.

That leaves "place accountability on federal government agencies." Frankly, I have no idea what this means, or how it would save any money at all, much less the hundreds of billions of dollars needed to make up for McCain's extension of the Bush tax cuts.

Politics is tough arena for economists. Few of us, myself included, have ever seen a candidate whose policies all comport with our professional judgments, much less our personal preferences. I certainly won't claim that I agree with absolutely every economic policy proposal that Obama has made, and I dislike gratuitous accusations of either incompetence or dishonesty.

But it is difficult for me to believe that people who promote John McCain's economic policies on the basis of the second paragraph of the letter above can simultaneously be aware of the facts and providing honest assessments. Perhaps I am wrong. I hope so.




Economists Support Obama Over McCain By More Than 2 to 1


The Truth on Taxes
• Obama: Tax cuts for 95% of working families
• McCain: NO tax cut for 100 million Americans
• Most would get a larger tax cut from Obama

This tax calculator approximates your tax bill under each candidate's plans.
The numbers in the tax calculator and the graph are from the highly respected, non-partisan Tax Policy Center (see their full report or executive summary (PDF) ). For details of the Obama tax proposals, see this article by his advisers or Obama's site. Here is some of our commentary on McCain's tax plan.