TheMercenary • Jul 15, 2008 2:35 pm
An interesting perspective from The Economist.
The battle of the pockets is joined
Jun 12th 2008 | WASHINGTON, DC
From The Economist print edition
The candidates' tax and spending plans are examined
THE most recent unemployment figures have hit Washington like a brick: the unemployment rate jumped to 5.5% in May, a hefty half-point hike from April. Much of the rise came from young Americans unsuccessfully seeking work for the first time, but the capital is again buzzing with recession worries. What better time, therefore, for the two presumptive nominees to battle over their economic plans?
And battle they have. On June 9th Barack Obama began a two-week tour to battlefield states, his first as his party's anointed leader, with a big speech on economic policy. He accused John McCain of favouring George Bush-like profligacy by proposing tax cuts he can't pay for. Mr McCain shot back with a speech of his own next day, saying that Mr Obama will raise taxes and unwisely renegotiate trade agreements. Strangely, both of them may have a point.
During the primary campaign Mr Obama decried exporting jobs to China and getting tainted medicine in return, with scarcely a mention for America's booming export sector (though his tone on trade is already starting to soften a bit.) And he does want to raise taxes on high-earning Americans to pay for new spending on health care and helping poor people save. Mr Obama wants to raise the top income-tax rate from 35% to 39.6%—its pre-Bush level—and the tax on capital gains to perhaps 25% from 15%. Mr Obama also wants to add some new corporate taxes. And he has spoken repeatedly of removing the earnings cap on payroll taxes, which, along with his other proposals, would increase the top marginal tax rate to over 46% of earned income. (State income taxes, which range from 0% in Texas and half a dozen others to around 9% in the most expensive states, including California, New Jersey and Washington, DC, come on top of that.) But his campaign, filled with centrist academic economists, has not proposed specifics, and Mr Obama said this week that he might even defer some of his tax hikes depending on economic conditions when he takes office.
continues:
http://www.economist.com/world/na/displaystory.cfm?story_id=11551769
The battle of the pockets is joined
Jun 12th 2008 | WASHINGTON, DC
From The Economist print edition
The candidates' tax and spending plans are examined
THE most recent unemployment figures have hit Washington like a brick: the unemployment rate jumped to 5.5% in May, a hefty half-point hike from April. Much of the rise came from young Americans unsuccessfully seeking work for the first time, but the capital is again buzzing with recession worries. What better time, therefore, for the two presumptive nominees to battle over their economic plans?
And battle they have. On June 9th Barack Obama began a two-week tour to battlefield states, his first as his party's anointed leader, with a big speech on economic policy. He accused John McCain of favouring George Bush-like profligacy by proposing tax cuts he can't pay for. Mr McCain shot back with a speech of his own next day, saying that Mr Obama will raise taxes and unwisely renegotiate trade agreements. Strangely, both of them may have a point.
During the primary campaign Mr Obama decried exporting jobs to China and getting tainted medicine in return, with scarcely a mention for America's booming export sector (though his tone on trade is already starting to soften a bit.) And he does want to raise taxes on high-earning Americans to pay for new spending on health care and helping poor people save. Mr Obama wants to raise the top income-tax rate from 35% to 39.6%—its pre-Bush level—and the tax on capital gains to perhaps 25% from 15%. Mr Obama also wants to add some new corporate taxes. And he has spoken repeatedly of removing the earnings cap on payroll taxes, which, along with his other proposals, would increase the top marginal tax rate to over 46% of earned income. (State income taxes, which range from 0% in Texas and half a dozen others to around 9% in the most expensive states, including California, New Jersey and Washington, DC, come on top of that.) But his campaign, filled with centrist academic economists, has not proposed specifics, and Mr Obama said this week that he might even defer some of his tax hikes depending on economic conditions when he takes office.
continues:
http://www.economist.com/world/na/displaystory.cfm?story_id=11551769