As Election Day draws near, taxes and spending are rapidly becoming the top two issues in the campaign. Ads are running, it seems, during every commercial break on every available television, cable, and satellite program about how Sens. McCain and Obama plan to cut taxes and who will benefit. Since Joe the plumber appeared, this issue has become quite personal for every American. They want to know how the tax plans will affect them, their businesses, their children, and the economy. What they decide could affect the outcome on November 4.
One ad you will not see from the Obama campaign is how the Bush tax cuts and Obama’s plans to eliminate them affect Sen. Obama himself. As President, Obama would eliminate the Bush tax cuts, increase taxes for those making more than $250,000, and redistribute that money to “the middle class.” Since Sen. Obama himself falls into the category of those who would pay higher taxes, our friends at Americans for Tax Reform examined what they call “The Obama Tax Gap.” They analyzed his tax returns from 2001 through 2007 and determined what he would have paid if the Bush tax cuts had not gone into effect. The total is $250,727, without including the additional Social Security payroll taxes, or any interest and penalties. Of that total, $161,555, or 65 percent, would have been paid in 2007, a year in which Sen. Obama earned substantial royalties from the sale of his book. So his tax plan would punish his own success – he wrote a best-selling book, earned far more money than he had in the past, and under his own plan would have turned over $134,553 more in taxes than he had would have paid in 2006.
What did Sen. Obama do with that “extra” $250,727? He did not turn it over to the government, although he believed the tax cuts were unnecessary. Did he give it someone or some group in need? Did he let someone else decide what to do with that money? Whatever it was, he decided what to do on his own – just the opposite of what he would do to everyone whose taxes would increase under his plan. According to his tax return (link includes information on Biden and McCain as well), he and his wife Michelle gave 5.7 percent of their income in 2007 to charity – $240,000 of their $4.2 million in income. In contrast, Sen. Biden and his wife Jill gave 0.3 percent of their income to charity, or $995 of their $320,000 in income that year (that’s 170 percent greater their average annual charitable contribution of $369 over the past decade). Sen. McCain, who files separately from his wife Cindy, gave 26 percent, or $105,467 of his $405,409 in income to charity.
Speaking of the Obama tax cut plan, his running mate, Joe Biden, said that taxes should be cut only for those making less than $150,000; here’s the video (it is the :56 “Biden Talks to Newswatch” segment in the video library), and here’s the story. Everyone knows that Joe Biden has a tendency to talk too much, but no one doubts that he means what he says (just look at his comments about the certainty of an attack on the nation to test the new president). What a shock – the threshold for increasing taxes goes lower and lower and lower… until everyone has to pay more to fund the $1 trillion in new spending that Sen. Obama is seeking.
Whatever happens on November 4, taxpayers are more aware now than they were six months ago about what the candidates plan to do about cutting taxes and spending. It remains to be seen which path forward they will choose.