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#1037602 - 09/09/08 03:37 PM Obama concedes taxes do hurt economic growth
straw Offline
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From The Wall Street Journal's op-ed page. I guess taxes do hurt economic growth.


ObamaTax 3.0
September 9, 2008; Page A24
The good news is that Barack Obama said on ABC Sunday that he might not go through with his plans to increase taxes.

The bad news is that the economy has to be mired in recession to avoid the largest tax increase in the nation's history.


Our check of the Dow Jones Factiva database suggests that other than viewers of ABC's "This Week," only three or four newspapers carried an account of Senator Obama's amended tax plan. While it's possible that the story of a deferred tax increase could shock the media into paralysis, we take it as an encouraging sign. The education of Barack Obama continues apace.

For the record, here is what he told ABC's George Stephanopoulos.

Mr. Stephanopoulos: "So even if we're in a recession next January, you come into office, you'll still go through with your tax increases?"

Senator Obama: "No, no, no, no, no. What I've said, George, is that even if we're still in a recession, I'm going to go through with my tax cuts. That's my priority."

Mr. Stephanopoulos: "But not the increases?"

Senator Obama: "I think we've got to take a look and see where the economy is. The economy is weak right now. The news with Freddie Mac and Fannie Mae, I think, along with the unemployment numbers indicates that we're fragile. I want to accelerate those tax cuts through a second stimulus package, get more money into the pockets of ordinary Americans, see if we can stabilize the housing market, and then we're going to have to reevaluate at the beginning of the year to see what kind of hole we're in."

* * *
Even individuals staring down the barrel of Mr. Obama's tax increases should not wish for an economic recession to give them a reprieve. The relevant point is that it was early last year, when the "Bush economy" was still humming, that Senator Obama first proposed pushing taxes sharply upward on "the wealthy," while giving what he calls "tax cuts" (actually they are credits, not rate reductions) to "the middle class."

At the time, Mr. Obama was the long shot in the Democratic Presidential sweepstakes, and it made some political sense to reassure the party's intensely liberal primary voters with class-war boilerplate on taxes.

Under ObamaTax 1.0, he would have repealed all the Bush tax cuts, lifted the cap on wages subject to the payroll tax, put the top marginal rate up to 39.8% and raised the rate on capital gains and dividends to at least 25% from 15% now. The official campaign line was that tax rates really don't matter to economic growth.

Summer arrived, the Clinton challenge was history and with the general election ahead came ObamaTax 2.0. It posited that the top rate on capital gains now would be 20%, described on this page August 14 by economic advisers Jason Furman and Austan Goolsbee as "almost a third lower than the rate President Reagan set in 1986." This was progress.

Now with the big vote less than 60 days off and John McCain pounding him as a tax-raiser and pulling ahead in some polls, the Democratic nominee has decided to release ObamaTax 3.0, the most interesting upgrade so far. If the economy is still weak in January, a President Obama might defer all of the planned increases.

Several interpretations of this shift are possible, none of which reflect badly on Senator Obama's political learning curve.

At the bloodless level of simply wishing to win, the Obama camp may have concluded that in the sprint to November it is a losing strategy to be the election's only doctrinaire tax raiser. A tight race tends to focus political minds, and none forget Walter Mondale's catastrophic promise in his 1984 acceptance speech: "Mr. Reagan will raise taxes, and so will I. He won't tell you. I just did."

Beyond this lies the economic reality of [censored] up income, investment and payroll taxes on "the wealthy" amid a flat or falling economy. In the standard narrative, these taxpayers exist as fat cats atop hedge funds, banks and megacorporations. Let's toss into the vat the top-tier managers of Fannie Mae and Freddie Mac, the Beltway's own fat-cat sinecure.

The reality is that the creators of new jobs in the economy are more likely to be rising entrepreneurs or filers under Subchapter S, who typically pay taxes at individual rates. Hanging three or four tax millstones around their productive necks in January if the economy is weak will likely produce unimpressive growth and job numbers in the first year of the new Obama Presidency, and likely beyond. That in turn could drag down the Democrats in Congress who will get credit for voting these higher taxes into law.

Thus Mr. Obama's unambiguous answer Sunday to whether he'd insist on his tax increases if the economy is in an official recession: "No, no, no, no, no." It seems Mr. McCain is right that taxes do matter.

Mr. Obama's most ardent primary supporters may not like it, but we'll take the five "Nos" as evidence that Senator Obama may be learning the difference between liberal doctrine and sensible governance.

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#1037632 - 09/09/08 03:53 PM Re: Obama concedes taxes do hurt economic growth straw
Yossarian Offline
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Quote:
the difference between liberal doctrine and sensible governance


The question is whether conservatives will learn the difference between the conservative deficit machine and sensible governance. Why is it that Republican presidents (since 1980) always drive up the deficit?

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#1037646 - 09/09/08 03:59 PM Re: Obama concedes taxes do hurt economic growth Yossarian
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#1037698 - 09/09/08 04:17 PM Re: Obama concedes taxes do hurt economic growth Yossarian
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Originally Posted By: Yossarian
Quote:
the difference between liberal doctrine and sensible governance


The question is whether conservatives will learn the difference between the conservative deficit machine and sensible governance. Why is it that Republican presidents (since 1980) always drive up the deficit?


Well, given that the congress was dem througout Reagan and Bush the 1st, spending cuts could not get through to balance it out. If you respond, "well the current Bush signed spending bill after bill" you won't get an argument from repubs and conservatives, because we recognize that he executed his office without conservative spending principles.
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#1037712 - 09/09/08 04:27 PM Re: Obama concedes taxes do hurt economic growth TheManofSteel
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Quote:
he executed his office without conservative spending principles


I disagree. You are thinking of the old conservative principles back in the pre-1980 days when they opposed deficits. Now they drive them up, take advantage of the economic stimulus of pumping borrowed money into the economy and let someone else clean up the mess. Bush is a good little Reaganite.

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#1037720 - 09/09/08 04:30 PM Re: Obama concedes taxes do hurt economic growth Yossarian
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Originally Posted By: Yossarian
Quote:
he executed his office without conservative spending principles


I disagree. You are thinking of the old conservative principles back in the pre-1980 days when they opposed deficits. Now they drive them up, take advantage of the economic stimulus of pumping borrowed money into the economy and let someone else clean up the mess. Bush is a good little Reaganite.

uhhh no. I am not thinking of anything "old" Mr. Maher. Conservative principles have been consistent throughout, and all of us recognize Bush 2 defies conservative spending principles, which is why he is called a "NEOCON" and Reagan was not.
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#1037724 - 09/09/08 04:33 PM Re: Obama concedes taxes do hurt economic growth TheManofSteel
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To call Bush II a Reaganite is to pay him a huge compliment that he does not deserve.
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#1037749 - 09/09/08 04:56 PM Re: Obama concedes taxes do hurt economic growth Blade Scrapper
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Anybody have any argument with higher taxes hurting economic growth?

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#1037754 - 09/09/08 05:06 PM Re: Obama concedes taxes do hurt economic growth straw
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Straw:

I am a Friedman Monetarist, but I think the Keynsian's would argue that higher taxes would help in so far as they would support the government spending that they claim stimulates economic growth.

I say screw the vast majority of taxes, esp. the income and death tax.
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#1037765 - 09/09/08 05:16 PM Re: Obama concedes taxes do hurt economic growth TheManofSteel
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under the Lone Star
increasing the capital gains tax is a growth killer!
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#1037769 - 09/09/08 05:17 PM Re: Obama concedes taxes do hurt economic growth TheManofSteel
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Way, way south.
FWIW, I believe that cutting wasteful spending is FAR more desirable than increasing taxes.

Why is this not an option for the Dems?
Last edited by Vacuous; 09/09/08 05:17 PM.
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#1037771 - 09/09/08 05:20 PM Re: Obama concedes taxes do hurt economic growth MB Guy
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I'm not nearly as well versed as Man of Steel is in economics but I'd say the dems can't cut spending because they're too interested in programs like universal health care that would be funded through increased taxes.

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#1037778 - 09/09/08 05:22 PM Re: Obama concedes taxes do hurt economic growth MB Guy
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I think it is not an option for far left Dems, Mark, like Obama and his ilk. But there are reasonable Dems that could work with McCain to trim wasteful spending AND keep the existing tax cuts that Bushy Admin pushed through.

Truf: I am not so well-versed although I was an ECON major, but as I am no spring chicken, it has been quite a while since I studied Econ. I know enough to hold my own in a conversation but I am nt a theoretical heavy hitter
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#1037782 - 09/09/08 05:23 PM Re: Obama concedes taxes do hurt economic growth MB Guy
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Originally Posted By: Vacuous
FWIW, I believe that cutting wasteful spending is FAR more desirable than increasing taxes.

Why is this not an option for the Dems?


Or the Republicans of the recent years as well... this is a two way street, and both parties are buring rubbing when it comes to the spending race.
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#1037787 - 09/09/08 05:27 PM Re: Obama concedes taxes do hurt economic growth TheManofSteel
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I was a Fine Arts major who ended up in banking so you've got me beat by a country mile, MofS.

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#1037825 - 09/09/08 05:51 PM Re: Obama concedes taxes do hurt economic growth #Just Jay
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Originally Posted By: Just Jay
both parties are buring rubbing when it comes to the spending race.

What does that mean?

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#1037831 - 09/09/08 05:56 PM Re: Obama concedes taxes do hurt economic growth MB Guy
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Originally Posted By: Vacuous
FWIW, I believe that cutting wasteful spending is FAR more desirable than increasing taxes.

Why is this not an option for the Dems?


Why is it considered an "either/or" proposition by the Pubs? We balanced the budget last time with a combination of the two.

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#1037851 - 09/09/08 06:09 PM Re: Obama concedes taxes do hurt economic growth Jokerman
#Just Jay Offline
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Originally Posted By: Jokerman
Originally Posted By: Just Jay
both parties are buring rubbing when it comes to the spending race.

What does that mean?


That even the Republicans enjoy opening the checkbook just as much as the Dems, just for different reasons and programs.
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#1037868 - 09/09/08 06:18 PM Re: Obama concedes taxes do hurt economic growth #Just Jay
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No, it is the expression itself that I'm unclear on: "bur[y?]ing rubbing".

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#1037879 - 09/09/08 06:25 PM Re: Obama concedes taxes do hurt economic growth Blade Scrapper
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Originally Posted By: Dexter Morgan
To call Bush II a Reaganite is to pay him a huge compliment that he does not deserve.


No, just pointing out the similarities - cut taxes, spend huge amounts on the military and run up enormous deficits. The main difference is that Bush didn't promise to balance the budget (probably because it was already balanced at the time).

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#1037884 - 09/09/08 06:26 PM Re: Obama concedes taxes do hurt economic growth Jokerman
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The Land of Tax Free Shopping!
I think y'all are starting to catch on; both parties enjoy controlling the vast sums of money generated by taxes to spend on themselves. Why do you think election laws make it so difficult for 3rd parties and independents to get on ballots?

No matter who you choose, you lose.

Want to see REAL change? Do not ever re-elect an incumbent. Ever. Regardless of how they do. If the US were able to get 15-20 years of no incumbent re-elections, so that politicians actually had to accomplish things in one term, things would change dramatically.

Tough to do though...Everyone would have to be on board.

We should have a randomizer with the name of every US citizen over the age of 35. Every four years it spits out a name for a President and a name for Vice President. Talk about Democracy!
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#1037885 - 09/09/08 06:28 PM Re: Obama concedes taxes do hurt economic growth FBH
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Pulling people out of the ditc...
I think he means "burning rubber".

And personally, I think the flat tax is the way to go...everyone pays the same percentage.
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#1037911 - 09/09/08 06:40 PM Re: Obama concedes taxes do hurt economic growth HappyGilmore
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I am for the fair tax program is that the same as the flat tax Happy? Vacuous told me a book to read about it, and the only candidate that was really behind it was huckabee, but I thought I had read somewhere that Fred saw the merits of it.
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#1037918 - 09/09/08 06:44 PM Re: Obama concedes taxes do hurt economic growth kms
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The Fair Tax is actually a consumption tax...basically a national sales tax.
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#1037938 - 09/09/08 06:50 PM Re: Obama concedes taxes do hurt economic growth Blade Scrapper
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Thats what I am for, the heck with all the regular taxes, the rich buy more expesive things so they pay more taxes and lower incomes don't spend as much so their tax burden is less. I like it.
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