Obama vs. McCain Tax Plan Comparison

Posted by AzBlueMeanie:

The Washington Post awhile back published a useful chart comparing the Obama tax plan to the McCain tax plan. Obama and McCain Tax Proposals – washingtonpost.com

The McCain tax plan, which promises a continuation of the Bush tax plan plus additional tax cuts, is designed to benefit the wealthiest Americans.  It will continue the transfer of wealth from the bottom 95% percentile of Americans to the top 5% percentile of the wealthiest Americans. (The McCain family will personally benefit under his tax plan; the Obama family will pay more taxes under his tax plan).

As a result of the Bush-McCain tax policies, America today has the greatest wealth disparity at any time since 1929 just before the Great Depression. Wealth and Income Inequality in the USA This polarization of wealth has resulted in a new "Gilded Age" of a small number of wealthy elites, and the masses of the struggling working class.

The Obama tax plan essentially proposes to return us to the tax policies under Bill Clinton before George W. Bush.  You will recall that Bill Clinton and the Democratic Congress increased taxes on the wealthiest 1% of Americans in 1993. This was followed by the longest period of economic expansion in the post-war era, including substantial growth in jobs.  Bill Clinton produced budget surpluses during his second term that were used to begin paying down our national debt. Clinton’s economic success was proof that raising taxes on the wealthiest elites does not result in slower economic growth and job losses – something Republicans always claim as a matter of ideological doctrine.

Republicans also claim that the Bush tax cuts have been a "success" in creating economic expansion.  John McCain says "our economic fundamentals are strong. " But the truth is that the Bush economic expansion is among the weakest on record. The Center on Budget and Policy Priorities issued its report on April 22, 2008 How Robust Was the 2001-2007 Economic Expansion?

The evidence on the 2001-2007 expansion provides no support for the claim that the tax cuts generated exceptional economic growth. Rather, examination of a broad range of key economic indicators indicates that the economic expansion that began in 2001 was, on balance, weaker than average. In fact, with respect to GDP, consumption, investment, wage and salary, and employment growth, the 2001-2007 expansion was either the weakest or among the weakest since World War II.

Moreover, the economy’s performance between 2001 and 2007 was weaker, overall, than its performance in the equivalent years of the 1990s, years following significant tax increases. GDP growth was somewhat weaker than in the 1990s, and job creation, investment, and wage and salary growth all were substantially weaker.

Moreover, George W. Bush has the worst performance of any president for job creation in the post-war era, edging out his father for the title. See this chart from economist Paul Krugman (jobs in millions). Note that every Democratic president has created more jobs than any Republican president in the post-war era.

If you were a member of the "investor class" (in particular a speculator in a hedge fund or index fund, or better yet, that fund’s manager), or a corporate CEO, you have done exceptionally well under the Bush tax policies. You are among the wealthy elite in the top 5% percentile who have prospered.

Corporations have also done well under the Bush tax policies. Congressional Quarterly recently reported "Most corporations, including the vast majority of foreign companies doing business in the United States, pay no income taxes, according to a Government Accountability Office report released Tuesday." CQ Politics | Most Corporations Don’t Pay Income Taxes  Sen. Max Baucus (D-MT) said “I’m committed to finding ways to improve compliance and reduce taxpayer burden so that we begin to bridge the tax gap, which accounts for $345 billion in legally owed but uncollected federal revenues each year.”

Republicans, for all their talk about being the party of fiscal responsibility and small government have been exactly the opposite under President Bush. The Bush administration has been the most reckless spending administration in U.S. history (and not just because this is the only administration in U.S. history to go to war without imposing a "war tax" to pay for it; it was largely due to the tax cuts for the wealthiest Americans). Bush most reckless spender in White House history | Los Angeles Times

The Office of Management and Budget acknowledged that its budget projections for 2009 will be even higher than expected — now estimated at a record $482 billion. As Rep. Steny Hoyer explained:

"George W. Bush inherited a projected 10-year budget surplus of $5.6 trillion, which he proceeded to turn into a projected deficit of more than $4 trillion. When President Bush took office in January 2001 the Congressional Budget Office projected a surplus of $635 billion in 2008 and $710 billion in 2009. Now, OMB projects deficits of $389 billion and $482 billion in those years respectively — a swing of more than $1 trillion in each year.

And as Rep. Rahm Emanuel wryly noted, "President Bush squandered a $236 billion surplus, ran up record deficits and added [more than] $4 trillion to the national debt. Mr. President, we will be forever in your debt.”  Bush most reckless spender in White House history | Los Angeles Times

Rather than tax the wealthiest Americans so that federal income equaled expenditures (a balanced budget), the Bush administration opted to follow reckless fiscal policies to attract foreign capital into the U.S. to finance its government spending through borrowing.  Bush took out the U.S. credit card and said "charge it."  Now the U.S. is the largest debtor nation in the history of the world.  Our debt is owned by countries like Japan, China, the OPEC nations and the European Union, as well as countries like Russia, Canada and Mexico.  Many of our creditors are not friendly to U.S. interests around the world.  Our debtor status gives these countries leverage. And that is a potential threat to our national security.

Bush’s reckless fiscal policies have also steadily devalued the U.S. dollar. Here is a recent trend chart from the Federal Reserve Bank of Minneapolis.  When the dollar is devalued, American’s purchasing power also declines.  The price of crude oil is also indexed to the U.S. Dollar. As the dollar has been devalued, this meant that the U.S. had to pay more dollars for the same amount of oil.  This has been a key factor in rising gas prices.  Another key factor was rampant speculation by investors in the hedge funds and index funds. A Few Speculators Dominate Vast Market for Oil Trading They are among the 5% percentile of the wealthiest Americans who have benefited the most under the Bush-McCain tax policies.  These rich bastards screwed this country on both ends of the deal.

So wake up, America! It is time for Americans to awaken from their stupor and to rise up enmasse to throw these Republican charlatans and thieves out of office. Not a single Republican should be elected to office this fall at any level of government based upon this outrageous record of criminal negligence and moral decadence.