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Obama Proposes $80 Billion in Tax Cuts


Obama at the Tax Policy Center today. (AP).

Sen. Barack Obama delivered a second economic speech in as many days on Tuesday, announcing $80 billion in proposed tax cuts for working people, homeowners and seniors with the declaration that "the wealth of our nation is rooted in the work of our people."

Obama (D-Ill.) has made confronting special interests and corporate lobbyists a core theme of his campaign, and he elaborated it in his tax cut proposal. Arguing that rich business interests -- rather than market forces -- have conspired to lobby for tax breaks, Obama said it is time to shift the tax burden away from the middle class.

"In our new economy, there is no shortage of new wealth," he told the Tax Policy Center. "But wages are not keeping pace...This isn't the invisible hand of a market at work. It's the successful work of special interests. For decades, we've seen successful strategies to ride anti-tax sentiment in this country towards tax cuts that favor wealth, not work. And for decades, we've seen the gaps in wealth in this country grow wider, while the costs to working people are greater."

Obama proposed eliminating tax returns for some 22 million senior citizens, promising that no retiree making less than $50,000 would pay income tax. He said he would expand tax relief on mortgage interest for homeowners, targeting about 10 million people who own their homes. And he proposed reducing income taxes for 150 million workers, eliminating all income taxes for about 10 million of those.

Invoking the current mortgage crisis, Obama said he would provide some relief in the form of a "universal homeowners' tax credit" that gave people tax credits even if they do not itemize their tax returns.

Obama has said he would pay for his tax cuts by rolling back part of the Bush tax cut, though he has also said that step would help pay for his health care program. Sen. Hillary Rodham Clinton has proposed tax credits to help make health insurance more affordable, as part of her overall health care package. Former Sen. John Edwards mapped out a plan earlier this year to exempt some investment income from capital gains taxes, provide tax-free savings accounts for low income workers and the middle class, and raise capital gains taxes for the wealthiest.

"Our country is divided into two Americas - one for those at the top and one for everyone else," Eric Schultz, a spokesman for Edwards said. "Senator Edwards believes this is an issue of fairness - those at the top should pay their fair share, instead of making hard-working families bear most of the burden. But we also think when it comes to selecting a president, specifics matter, and we look forward to seeing what tax rates Senator Obama proposes."

--Anne E. Kornblut

By Washington Post editors  |  September 18, 2007; 7:38 PM ET
 
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Comments

They all say the same thing...they think that this is shocking however its not when everyone in your party has the same plan. The whole party needs to take a few Econ classes and rethink their fiscal plan.

Posted by: bdavis110 | September 21, 2007 10:37 AM | Report abuse

This is a great idea. Obama is a awesome candidate with strong ideas that always work. I hope that Obama wins or his ideas are used

Posted by: doubleblackdiva323 | September 19, 2007 7:19 PM | Report abuse

Your responses are a true sign of the times - no one trusts anyone. And I did not either untill I heard Obama speak in person. Three years later, he is still as straight forward and capable - even more so. It is quite often black people themselves who do not believe the USA will elect a black man, I am astonsihed to learn. And I have asked! The answer I get most often is exactly what theBoss said - that he would be dead within a year. DO NOT BELIEVE THIS AND IF HE IS BRAVE ENOUGH TO PUT HIMSELF OUT THERE, BE BRAVE FOR HIM! He is The Real Thing and I do not believe he would say he can do something without researching it, discussig it with experts,and drawing his best conclusions. And those are the conclusions of a successful self-made man; not a trust fund idiot like the one we have who has never suceeded at anything!

Posted by: sheridan1 | September 19, 2007 6:29 PM | Report abuse

You are all missing the point: we don't get a say-so, because big money is controlling everything they think (with a couple of notable exceptions); if you can't GET in front of the politician to be heard, they don't even know you have an opinion.

Campaign finance reform has to be our FIRST goal; hold them to an agreement to accept NO PAC moneys, NO special interest moneys (hey is that what Barack said?). Only public financing of elections is allowed, and THEN we'll have a say in what happens. As it is now, the playing field is weighted down by Haliburton and GM and Exxon and BP and Pharma and all in the insurance industry and the rest of the big dawgs on the porch.

Let's tear the porch off. Then we can join them in a conversation about tax cuts, health care, budgets, international security, sports scores and have it be meaningful. PUBLICLY FUND ELECTIONS NOW!!

Posted by: maryTnurse | September 19, 2007 6:03 PM | Report abuse

Capital gains is not a second tax for most of the money earned out there. And even if it is, the amount originally taxed comes nowhere near the amount that would be taxed if earned as wages.

This isn't an issue of redistribution of wealth, though that is a small part of what taxes have always done. But flat taxes punish lower income wage-earners on a much higher scale. If cap gains were taxed even at a person's standard rate, the revenue generated would be far greater.

A flat tax would also reduce overall revenues.

Posted by: cam8 | September 19, 2007 4:30 PM | Report abuse

cam8

in all seriousness what are you proposing here. People make what they make. It sounds like you are moving towards fullblown redistribution of wealth

I like the flat tax to a point. Some tweaks could include deducting up to a certain amount as tax free say the poverty line or 35k. Another idea is for food to be tax free.

Posted by: novamiddleman | September 19, 2007 4:19 PM | Report abuse

cam8

2 points

1. Capital gains taxes are a second tax for most people because wages are already taxes. A possible compromise could be having the first say 50k of capital gains be tax free or something like that.

2. Anybody can invest in the stock market so come on in and join the best (and perhaps only) way to truly breakout of the middle class

Posted by: novamiddleman | September 19, 2007 4:17 PM | Report abuse

No, a flat tax (and a sales tax is just a flat tax taken from a different source) is not equitable, and I'll tell you why...

What is 15% of $30K per year? $4500.

What is 15% of $1 million? $150,000.

Take $4.5K out of $30K, you get $25,500.

$150K out of $1M, $850K.

35% out of $1M still leaves $650K.

Can you argue that the quality of life for someone taking home $25,500 is not substantially poorer compared with someone taking home $650K?

The HHS poverty guideline is set at $10,210 for a single person, and that person still has a 15% tax liability.

It is actually in the vested interest of the wealthy to pay a higher percentage of income in taxes. The more they pay, the more the government can provide for the less fortunate, who can then stimulate the economy through the purchase of consumer goods.

As for your comment on "ability", that's only a small part of the puzzle in acheiving financial success. I'm willing to bet you there's a large number of college degrees among those working for low wages at a Wal-Mart, or Starbucks, or grocery stores. Luck is pretty important. Family connections too. You want to tell me that the Waltons, or the Hiltons, or any of the other members of the Lucky Sperm Club got to where they are from pure ability? For every Warren Buffett, there are two Paris Hiltons, guaranteed.

Lastly, if you don't like that politicians have the right to tell you what to do with your earnings, move.

"The Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States..."

--Constitution of the United States, Article 1, Section 8

Posted by: cam8 | September 19, 2007 4:15 PM | Report abuse

Well CAM8, then lets be totally FAIR and have a flat tax of 15%. What makes you the authority on what "... an equitable share" should be. I am certainly not in that class of uber rich that you want to deride (by the way are you as charitable as they are?), but I don't begrudge them for using what we all have in common, ability, as a cover up for my own failings.

I support you on closing of tax shelters and loopholes, but I totally reject giving POLITICIANS, the right to say what I am supposed to do with my earnings from any source.

Do you agree that flat tax meets your definition of equitable?

Posted by: RTPBOB | September 19, 2007 3:30 PM | Report abuse

This is not "penalizing success". It's simple logic. Wage tax rates are roughly where they should be. A 1-2% rate increase at the top of the wage earning scale is by no means crippling.

The big problem is capital gains, where most of the uber-wealthy make their money. That's only taxed at 15%, or the same rate that single people making $31K per year pay. So a multi-billionaire such as Bill Gates or Warren Buffett, who pays 35% of his actual wages under federal income taxes, probably only has a tax liability of 15-20%, if you count all of the money he makes in a given year.

There should be an increase in capital gains taxes for people whose total earnings (wages + other income) exceeds $1 Million annually. That should avoid punishing middle-class investors, while the rich (and especially the super-rich) start paying an equitable share. Let's also see a closing of tax shelters and loopholes as well.

Posted by: cam8 | September 19, 2007 3:03 PM | Report abuse

WHY? DO DEMOCRATS alway want to penalize success? Isn't hard work and success what made this country great? The mantra of FAIRNESS is democrat double speak for "OUR ONLY AGENDA IS TO REDISTRIBUTE WEALTH FROM THOSE TO HAVE MADE IT TO THOSE WHO WILL VOTE FOR US IF WE GIVE THEM SOMEONE ELSES MONEY"

Posted by: RTPBOB | September 19, 2007 2:35 PM | Report abuse

I actually believe him, democrats are pretty honest. and a tax cut will help alot of people in america, and it will also make it easier to survive.

Posted by: Sierra_08 | September 19, 2007 1:00 PM | Report abuse

I think its a good idea that the wealthy get tax cuts and the working families and low income familys get some money its about time that someone came up with a propoasl like this one

Posted by: goku433 | September 19, 2007 12:56 PM | Report abuse

Americans have been complaining about not getting the social benefits that they should be getting. If you keep cutting the taxes, where does the government get to pay for thses services ? We should cut military spending and bring our troops home. We have had enough arsenal to destroy the world ten times over. Building for missiles would encourage other nations to start the arm race with us. The savings from cutting military spending and the expenses incurred in Iraq and Afghanistan will be big enough to pay for the healthcare and still have money left to maintain our infrastruture - bridges, highways, airports and seaports etc.
To be fair for all Americans, why not impose a flat tax of 15% across the board? No deductions, no tax credits and no tax write off. it will plug up the loopholes for the special interest and the super rich.

Posted by: jslca52491 | September 19, 2007 11:59 AM | Report abuse

He would make an excellent president. Eliminate all taxes and paperwork for the poor, resuscitate the middle class and send the bill to the Halliburtons, Kenny Boys, Brownies, Perverted Preachers, Polluters, Enrons, Arbustos, Bush Pioneer Scofflaws, Blackwaters and no-bid Bushies who looted the treasury for their pork-barrel piggery and created this mess. Moving from a faith-based economy to a science and research-based economy under the rule of law will restore America's economic leadership.

Posted by: Open1 | September 19, 2007 10:59 AM | Report abuse

Has anybody ever heard of Ron Paul?

... because I have. And as I read Obama's "Audacity of Hope," I am more and more inclined to like Obama as a Senator, and Ron Paul as a president. Be skeptical - Google Ron Paul. You might like what you find.

... I did.

Posted by: onwaj6 | September 19, 2007 10:26 AM | Report abuse

Hey Kornblut, your "details" about Obama's proposed tax cuts are off the mark. For a true account of Obama's tax proposals read the McClatchy News Service, a much better source of news and truth, than what the Washington Post campaign reporters give us.

Posted by: bringbackimus | September 19, 2007 10:16 AM | Report abuse

Hey Kornblatt, you "details" about Obama's proposed tax cuts are off the mark. For a true account of Obama's tax proposals read the McClatchy News Service, a much better source of news and truth, than what the Washington Post campaign reporters give us.

Posted by: bringbackimus | September 19, 2007 10:15 AM | Report abuse

I don't object to Obama' tax plan, because I will finally benifit from a "tax cut". I am for a national sales tax, however, instead of an income tax. The majority of Americans are out of control consumers, so a sales tax would likely generate more money in taxes for Uncle Sam.

Posted by: bringbackimus | September 19, 2007 10:00 AM | Report abuse

Sounds like "theboss | September 18, 2007 09:30 PM " wants a President who will make the trains run on time.

Posted by: sickofspam | September 19, 2007 9:15 AM | Report abuse

cab91: obama is not smoking anything. he is trying to BUY his votes with empty promises. PERIOD. he knows that he will never occupy the white house but he keeps on keepin' on.
not the brightest penny in the till.

Posted by: lindafranke1952 | September 19, 2007 8:10 AM | Report abuse

$80 billion in tax cuts? And he thinks that rolling back part of W's tax cut is going to make up the difference?

I'd like to smoke whatever Obama's smoking.

Posted by: cab91 | September 19, 2007 7:44 AM | Report abuse

What about if we abolish personal income tax completely? And without increase in any other tax? Federal government just need to reduce its spending to the level of year 2000 to accomplish it. Wouldn't that help the poors, economy and create jobs, without chasing alway businesses?

Why they, "front runners", always comes with small twist on the problem just enough to get vote instead of cutting the evil from its root? Reduce tax here, but increase there. Why no one proposes drastic government SPENDING CUT, when debit is passing 9 trillion dollars?

Please, you tube Ron Paul.

Posted by: iaoki | September 19, 2007 2:36 AM | Report abuse

Ooh! Tax cuts! You big beautiful man! That way I can afford to spend more time at the country club!

Posted by: Tim_G | September 19, 2007 1:12 AM | Report abuse

Is the readership of this newspaper made up of diverse income classes? Probably not. It seems more likely that it's mostly upper and upper middle class Americans. Perhaps the comments on this board reflect that bias.

Obviously nothing is black and white. Tax cuts don't equal good or bad. The tax cuts Obama presents may not even create results he intends or that most envision. "$80 billion" is probably given to get a headline in the media.

Posted by: gkrishna1 | September 19, 2007 12:52 AM | Report abuse

Obama is the best hope for the country right now. While it would be good if he would begin providing more specifics on things, the general themes he espouses are what the country needs: less greed, more collective focus, more genuine compassion, more fairness, less special interest power, etc.

Posted by: loxley | September 19, 2007 12:27 AM | Report abuse

OH PLEASE. If Obama gave a hoot about the middle class, then he wouldn't have voted in favor the immigrant amnesty bill. An $80 billion dollar tax cut is meaningless when there are no jobs left for the middle and working classes!

Posted by: Tirade1 | September 18, 2007 11:41 PM | Report abuse

Nobody should pay INCOME TAX. There should be a national sales tax and CUT BIG TIME the government spending...no more ear marks, no more buying votes with tax payers money, no more waste and fraud in thousands of government programs...

Posted by: ekim53 | September 18, 2007 11:36 PM | Report abuse

80 Billion Tax cut with 300 Billion Tax INCREASE... read the fine print this plan is an economy killer! Depression here we come with Obama!

Posted by: StarsAndStripesForever | September 18, 2007 11:20 PM | Report abuse

The more I see of Joe Biden

the more I HIGHLY question whether Hillary, Kerry, all of em, are ragdoll decoys to just make it so whoever wins, big business wins.

80 billion in Tax Cuts ?

Wait just a second here...

The US stepped in to play traffic cop for Iraq as Bush describes it - and then ?they were supposed to be self sustaining on their oil revenues.

What are America's 'revenues' ? really

USED to be hard work.
Used to be leading so many sectors.

Now ? it's - let's figure out a way to legalize all the non voting mexicans to pay taxes that the US corporations abusing those very same people get to skate by finding HQ in - hmm - dubai ? other nationstates.

UH UH

Obama ? You're younger than I thought to not think through the, er, LACK thinking through promoting a vision of a PROFITABLE America, a PROSPEROUS America.

I had lost ALL hope in America until I sat down and watched a GOOD BIT of the Joe Biden videos on YouTube.

What a head whammy, I actually feel like there is something terrific to work towards now, a future that could remove corruption at the top, time will tell in 2008.

I wouldn't try to 'make' anyone vote this way or that, but America, you better sit back and sort out the tripp tripe from the real deal.

I saw Hillary last night on TV - was like my 7th grade run for Vice President of Student Council 'and I'll put in a health food vending machine and...'

Hillary was off on 'And i'll make those insurance companies not deny you health policies OR benefits, and I'll get those pharmaceutical companies to stop charging outrageous rates for their products'...

Is she MAD ?

She's lost the pharm AND insurance sector RIGHT THERE already - or is it just some 'for show game' and that explains why she could be so unrealistic to expect BIG profit oriented corporations are just going to 'allow' her to 'not seek great profits' as they do. Really.

Too bad Hillary won't promote a way to make the US prosperous.

THAT indeed is a focus WORTH looking into.

I've no idea what I could possibly do to help Joe Biden, he seems to turn every head he walks past - and leave people with hope restored for how good things CAN be.

All I can do is vote I suppose.

and hope the electoral college isn't rigged by corporate interests.

Seems IRaq is already adopting Biden's plan of 2 years ago as the best option on their own, would certainly help if he's got the reigns of the nationstate to hold and restore a REAL sense of justice in this nation.

I do NOT accept the bush admin's exit strategy- and that has been for almost EVERYONE IN IT - to just resign.

Just a damn shame people...


Posted by: Bushes_worst_nightmare | September 18, 2007 10:20 PM | Report abuse

While many candidates may say almost anything to get themselves elected, and therefore cannot be trusted to keep promises, it is useful to look at those to whom they are beholden. A candidate funded by the PACs of wealthy business interests can be expected to represent his donors' interests.

Any reasonable person should believe that electing Obama or Clinton will result in tax policies that differ (notably in shifting tax burdens back to the wealthy) from the policies of W.

Posted by: abobotek | September 18, 2007 10:13 PM | Report abuse

I have a new take on Taxes.


It seems that the Federal government is driven by corporate lobbyism, and take Exxon last quarter, US record profit of 40 billion in ONE QUARTER.

Obama ? Get this idea here, and get it well - ALL ya's...

If Big gov. is driven in policy by corporate America, er, THOSE corporations like Halliburton that AVOID paying taxes by moving to a different natiostate - and THOSE corporations are able to turn a profit ?

I ask - ought NOT I to expect what taxes I should pay into my nationstate ? but what profit my nationstate can bring by my willingness to put my HEAD on the choppingh BLOCK for it ?

My point is, HUGE corporations turn a profit, why can't a nationstate.

really ?

All this 'TAx Cuts' for the workers, while Dick Cheney's company he's still virtual CEO of moves to DUBAI to skip paying IT's taxes.

I'll tell you why the working class pays taxes, because BIG corporations seek to gain all the protection from a nationstate, but they wish to be responsible in NO WAY as to their taxes due.

It's not just that, that's somewhat of an old drum to beat.

a NEW DRUM I just thought of - pretty much yesterday for me is - why is it I can NEVER expect to see a nationstate be profitable ? and sustain itself ?

where the GOD DAMN MF did this idea ever sneak off to ?

it's such a GOOD idea, you know, live for the nationstate, DIE for it, and hey, reap the profits of all you believe in and live for.

Bush has kids putting their heads on the chopping block, to face what ? IF they survive, IF they can find a job when they return, to then pay for the war ?

UH UH, NO WAY

I'd not be complaining if the IRS had a MAJOR database failure.

It'd force the US to wake up and realize, hey, where did the idea of a self sustaining federal government ever go ?

The bottom line is - Bush, Cheney ? they are USING this nationstate, Cheney's company already showed IT's stripes moving to Dubai. Would be HALARIOUS if they take out any office space in the world's tallest building the Bin Laden construction company is building... really.

Posted by: Bushes_worst_nightmare | September 18, 2007 10:11 PM | Report abuse

WOW!!! theboss really needs some help, just to think that he's walking around out there somewhere is a bit troubling. Bizzare is right. Very, Very unsettling, but it's okay. I know that there are only a few of his kind out there.

Posted by: dee1126 | September 18, 2007 10:03 PM | Report abuse

I think Obama is doing a good job. And i think he will make a good president.

Posted by: bu_zfresh | September 18, 2007 9:57 PM | Report abuse

It's bizzare when humans state things like: "America will never elect a black (whatever)" as their personal read on real-politik and then personally advocate against voting for the black (whatever). I know the Michael Richards thing must've scared you, but it's much more intellectually honest for you to say that you, personally, have a primal issue with black (people). Jeez - try to be more subtle next time, at least . . .

Posted by: mrunnels | September 18, 2007 9:50 PM | Report abuse

I like the fact that he's bringing it out into the air, but we need to be specific- we need so much a year as a nation, as a geographic family, and we need a formula to cover it, so that it is equitable for all. much of what he says makes sense, while Bush's tax cut was senseless.
Guiliani is a marginally more intelligent bush and has no human compassion, let alone a feel for people- just the desire to be President, just like Bush, who was the poor and drunken version
of Ronald Reagan.

Posted by: bebeyond49 | September 18, 2007 9:47 PM | Report abuse

How a 'bout "grasping at straws"... First off America would possibly elect a woman but, The US is way too backwardass to elect a black man. Sorry, it's the truth. Beside that if he was elected, some freaked out, white-supremacist, Meth-head from Idaho would kill him (CIA plot or not) and then we'd have perfect police state v1.0... Our economy is beyond f****d so, let's get real and give Guiliani his 8 years to get things in order. We are at a crossroads... the Christian Right is a miniscule minority that has played it's cards right... Everyone thinks they are so numerous that we have to listen to their BS... That's BS! I am a conservative Republican! Where is their "conservation"? Seems like the Neo-Cons are just Neo-Nazis trying to disguise their true colors. Wake up America or die in concentration camps policed by Blackwater... Anyone caught the Romney-Blackwater connect yet? Thought not. Bringing the "Party" back to the GOP----ABNorml

Posted by: theboss | September 18, 2007 9:30 PM | Report abuse

Tax cuts without budget cuts are a recipe for disaster. Obama has to know this - so why isn't he REALLY making a statement by including info on where and how he'll be making the cuts necessary to put the Feds on a paying basis? Do that - take on the mantle of the Paul Simon "pay as you go" Democrat that most of us in Illinois who supported you believed you to be, and you put further ideological distance between yourself and She Who Will Not Be Named (aka "the Queen of Cringe"...)

Posted by: splooie | September 18, 2007 9:28 PM | Report abuse

Thanks, Barak Obama. I think you can do what you've proposed, partially by undoing young george's tax cuts for the wealthy, partially by ending idiot bush's insane war which will in itself more than pay for your tax breaks. So far I've been on the fence about which Democrat to support, but over and over you've proved yourself to be one of the "good guys", and as of today you've got yourself another vote.

Posted by: binkynh | September 18, 2007 9:24 PM | Report abuse

Obama for president......? I don't think so. The more he talks the worst it gets. Here's an idea...How about coming up with a plan to address the massive financial problems Bush has created before talking about tax cuts...

Posted by: jjmicaiah | September 18, 2007 9:21 PM | Report abuse

My thoughts exactly kiwircwb. Campaign promises are basically lip service and candidates will say anything to get elected. Saying it and actually being able to do it are two different things. Even if Obama wanted to to make these tax cuts, once he gets in office, he'll probably be hard pressed to do it given all the other people besides the middle class that he needs to keep happy.

Posted by: richlux | September 18, 2007 9:17 PM | Report abuse

Yea, right and what about the massive debt that GW left. Who's payng for that?

Come on now. Nothing is free, no one's handing money out on the corner.

Same old political BS.

I swear to god.... if Americans are buying this we deserve four more years of Bush.

Posted by: mriley0223 | September 18, 2007 9:09 PM | Report abuse

Yeah, thats what most of the presidential candidates have said in the past and nothing has happened to change that. They say that they will cut the taxes for the middle class people and not the wealthy. Good luck with that.

Posted by: kiwircwb | September 18, 2007 8:31 PM | Report abuse

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