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Wag the Blog Redux

A USA Today/Gallup national poll from Monday showed the presidential race's two frontrunners -- Sen. Hillary Rodham Clinton (D-N.Y.) and former New York City Mayor Rudy Giuliani -- with considerably smaller leads than in past national surveys.

Clinton led Sen. Barack Obama (Ill.) 39 percent to 24 percent while Giuliani held a more narrow 25 percent to 16 percent edge over former Gov. Mike Huckabee (Ark.) whose surge in Iowa is now being mirrored nationally.

We asked you whether you thought the USA Today survey showed serious slippage by Giuliani and Clinton or the natural tightening that should be expected in any race as high profile as this one. Most of you said you believe the new numbers signified slippage. The most insightful responses as gathered by washingtonpost.com politics producer Sarah Lovenheim are below. The conversation continues here.

Status Quo

The USA Today poll represents a natural change resulting from the electorate beginning to pay more attention to the race. The natural 'name recognition' lead of candidates like Clinton and Giulianni shrinks as voters learn about all the candidates and their relative strengths & weaknesses.

Posted by: bsimon

I think this is just a natural tendency in primaries, rather than evidence that either front runner is in danger of losing the lead for good.

Posted by: dbitt

Slippage

There is no doubt that Clinton's lead is slipping... when you are at the top, there is no other way to go but down. She ran a great campaign for most of the race, but has recently done a poor job responding to the attacks of her opponents.

Posted by: bwvr

I believe that it is slippage by the front-runners... For Giuliani, the false images of "America's Mayor" and "9/11 Hero" may not be enough to convince people of his candidacy. As for Clinton, try as she may, she will not be able to convince Americans of her honesty and straight-forwardness.

Posted by: frfrew11

Yes, Clinton & Guiliani are both actually slipping in their chances to win their respective party nomination. Clinton had a huge shot to shore up the D nomination, and couldn't do it. Her stumbles and Obama's great fundraising has allowed him to overtake her in Iowa.

Rudy was not given a great shot from the beginning of shoring up the Republican base...Romney shot for the early states, which is now unraveling for him in Iowa... Huckabee has became the party's standard bearer now as the socially conservative candidate...Guiliani has slipped.

Posted by: bryant_flier2006

It's a Toss Up
I don't think the two explanations are mutually exclusive. It's probably a combination of both - more scrutiny as more folks get interested and people growing tired of the same faces always seeming to be in the lead.

Posted by: USMC_Mike |

By Washington Post editors  |  December 7, 2007; 3:30 PM ET
Categories:  Wag The Blog  
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Comments

2008 Presidential Election Weekly Poll

http://www.votenic.com

The Only Poll That Matters.
Results Posted Every Tuesday Evening.

Posted by: votenic | December 8, 2007 6:21 PM | Report abuse

Hillary Clinton has had her face on primetime for too long. From the beginning, I swore I would give her a chance, but the more I have seen of the Senator, the more convinced I have become that she lacks substance. It is hard to hide a campaign based on pandering when you are on the TV screen every night. And it's hard to deny that, but for Bill Clinton, Hillary would not even be a player. Maybe that is a good side of the long political season...you can only dodge and duck for so long before even the most ardent supporters can discern reality from fiction.

Posted by: donchew1 | December 8, 2007 4:07 PM | Report abuse

Personally, I'm happy to see Huckabee move into second place nationally. I think Giuliani vs. Huckabee makes for a much more interesting contest than either McCain or Romney competing against RG.

Posted by: Lcs210 | December 8, 2007 12:18 AM | Report abuse

Picking up my own threadjack, Mike, I do not want to favor either an investment passive for me or active for me. My choice should be based on whether I have a marketable idea, trade, profession, talent, or skill, or whether I am risk averse, not on an artificial tax advantage.

So I think, in full pontificating mode.
-------------------------------
BTW, I think the Aggies have a great bb team, even after the strange USC loss, and if I can get tix for the game in Austin, I sure will.

Posted by: mark_in_austin | December 7, 2007 11:31 PM | Report abuse

Has anyone heard about then gov. Huckabee sending a male staffer to the Caymen Islands on a frequent basis?

Posted by: davidbrowne | December 7, 2007 8:26 PM | Report abuse

But aren't all passive investments ultimately active investments? If you hold a mutual fund, your fund manager is managing the fund for you.

And if you buy indexed funds, doesn't that still provide capital and promote economic growth?

I'm not convinced that active investment > passive investment.

In fact, we should encourage the middle class to get some passive investments.

Posted by: USMC_Mike | December 7, 2007 5:27 PM | Report abuse

J., I also did not try to find a component for b-to-b retail sales that could be subtracted from the Census Bureau's $ total.
Obviously, that significantly reduces the projected take below $1.4T.

Posted by: mark_in_austin | December 7, 2007 5:24 PM | Report abuse

Mike - The Fair tax proponents treat tax as if it were a significant slice of gross revenue to make their comparisons with their proposed system work. I understand cost accounting too, and projections of income and thus of income tax are not unusual. But a 30% income tax on a 10% pretax net income projects as 3% of gross, right? They are playing with the numbers.

In my view, a fair corporate tax would allow a partial but substantial corporate deduction for dividends paid and a current deduction for now amortized capital outlays to favor capital outlays - but would fully tax dividends to the recipient so that there would be no difference between dividend income and the income I receive from investing in my own business. A system that favors passive investment by absentee investors over active investment by small business in itself is unfair, too.

Posted by: mark_in_austin | December 7, 2007 5:21 PM | Report abuse

J, here's a "quick and dirty" look.

Retail sales from Census Bureau include gasoline, all cars, but not homes:

= about $4.4T in 2007.

Subtract "used cars" at $80B.
Add new homes at $250B [Census Bureau, new homes].
Call the total $4.6T.
External Fair Tax rate = 30%.
30% of $4.6T = $1.4T.
Prebates reduce that number, but lets go with $1.4T.

The Prez's submitted Budget is $2.9T.

No getting from "here" to "there".

Its silly.

Posted by: mark_in_austin | December 7, 2007 5:11 PM | Report abuse

Mark:

In Part 2, you write 'I believe that federal income taxation of business is imposed only after a profit is determined and is therefore not a "cost".'

In the budgeting process, most companies (and, all of the big ones), forecast both profit and tax burdens, among other things. The difference between accrual and cash accounting, as well as between GAAP and Tax accounting, means that it's not exactly accurate to say that companies pay taxes only after they have made a profit.

GAAP profit rarely resembles Tax profit, and either way, there is evidence to suggest a correlation between corporate tax rates and the price of goods -- indicating that corporate taxes do indeed pass through to consumers.

And if I'm wrong, the burden is still placed on individuals -- in the form of double-taxation. All individuals who own the corporation (the shareholders), see their money taxed at the corporate level. Then, when they get paid (dividends) they are taxed again. So they are essentially paying 40%, then XX% on the 60% they get back.

Either it gets passed through to consumers or the owners, or both, and that is un'fair'.

Posted by: USMC_Mike | December 7, 2007 5:08 PM | Report abuse

Mark,

Nice look at the Fair Tax in brief.

One question. In looking at the sales numbers, did you include fuel, autos, and homes? The Fair Tax, I believe, covers all of those (and replaces the gas tax). The last item on that list will give people the most pause, I think.

Also, the Fair Tax would replace the payroll tax, which is itself regressive.

In general, I'm in favor of this sort of idea, but I'm still considering this implementation.

There are some other potential advantages of this sort of tax system:
- It's a heck of a lot simpler to deal with, with less waste.

- I think it has a greater potential to capture at least some of the underground economy. People will still find a way to avoid it. But those who make their money illegally (paying no income tax) will still pay tax on what they buy.

- There should be an impact on corruption in Congress. Earmarks get noticed, but the real cost we pay is in the tweaks to the tax code in exchange for donations. There is still the issue of regulatory help for donations, but I think a huge chunk is in the tax side (no documentation on this, sorry). The trick is to ensure that it is structured to make it very difficult to fiddle with absent any real need.

I'm keeping an open mind about this proposal. In principle, I favor scuttling the Federal income tax in favor of a sales tax. But it definitely makes a difference how you put the thing together, and I'm still studying this one.

Posted by: J | December 7, 2007 4:46 PM | Report abuse

mark: he didn't come up with the FairTax; he's just latching on to it. The culprit is Georgia Rep. John Linder.

FairTax plus no evolution = boob

Posted by: Spectator2 | December 7, 2007 4:40 PM | Report abuse

The mortgage interest deduction would be a big loss, but not the only one. What about the charity deduction? Charitable giving would decline significantly if it weren't also a tax break. And then there's healthcare. I put pre-tax money aside for healthcare spending, and my health insurance costs are also pre-tax. Wouldn't the "Fair Tax" hurt that also?

Sales taxes are regressive. Even with the prebate for poverty-level spending, they're regressive. A person who makes and spends $20,000 per year would pay $2300 in taxes under the Fair Tax. (23% rate, $2300 prebate). Right now, people making $20000 aren't paying anywhere near that much in federal taxes. Meanwhile, someone like Bill Gates would see his taxes drop sharply; he can't possibly spend a significant fraction of his income in a year. The Fair Tax isn't fair; it's regressive.

Posted by: Blarg | December 7, 2007 4:39 PM | Report abuse

Huck and Fair Tax, my conclusions

A Lawyers Civil Relief Act.

A boon to state agencies that are paid to collect the tax.

Creates many more problems than it resolves, even if the theory of embedded taxes can be verified.

Not a populist scheme - but not pro-business either. Homebuilding and auto building are key industries in America - This would be deadly to both.

Huck has either been sold a bill of goods or is selling one, himself.

Posted by: mark_in_austin | December 7, 2007 4:32 PM | Report abuse

Huck and Fair Tax, Part 5

4] claim: Simplicity.
My criticism: To figure your prebate, after the first year, will require an annual informational income tax return, because the prebate is per family unit, based on family size. The
loophole for "business purchases" will require a complex set of regulations to define every way to close it and a huge team of auditors - or permit the breakdown of the entire system. The Fair Tax is only imposed on new items - thus there will be enormous pressure to devise rental schemes for newly built homes and cars and only sell them as "used" six months later - or the entire homebuilding and auto industries will collapse.

Posted by: mark_in_austin | December 7, 2007 4:28 PM | Report abuse

Huck and Fair Tax, Part 4

3] claim: There is some benefit derived by taxing the Feds as consumers of retail goods, while businesses do not pay taxes even for retail items. [Boortz, P.55]. The plan seeks to move more services
to private business.
My criticism: If there is any administrative cost to the system, and there is; for the collecting
entity to pay taxes is a way to bleed administrative fees for no reason at all except to feather the nest of the administrator. Obviously, the Fed will increase its budget deficit by the difference between its taxes paid and its taxes collected. The exemption of businesses from paying tax is an invitation to me to purchase through my law firm; a loophole so big that an Abrams tank can be driven through it.

Posted by: mark_in_austin | December 7, 2007 4:27 PM | Report abuse

Huck and Fair Tax Part 3

2] claim: The 23% internal tax rate proposed is sufficient.
My criticism: First, that is a 30% external tax rate, which is how we think of sales taxes generally, as add-ons. [Boortz, Pp. 151-153].
Second, go look at retail sales in America and compare it with total budgetary needs and the numbers do not work at 30% add-on. Not close.

Posted by: mark_in_austin | December 7, 2007 4:25 PM | Report abuse

Huck and FairTax, Part 2

1] claim: The tax merely replaces the "embedded" taxes in everything that we buy.
My criticism: the only embedded federal taxes in what we buy are tariffs, which are
not being replaced, and the employer's share of withholding, at most a 3-4% saving, if labor is one-half of cost. I believe that federal income taxation of business is imposed only after a profit is determined and is therefore not a "cost". It cannot factor into pricing of American made goods and services because whatever the highest price the market will bear is the same price, whether the seller pays income taxes, or not.

Posted by: mark_in_austin | December 7, 2007 4:24 PM | Report abuse

Huckabee and the Fair Tax: Part 1

The national sales tax called "FairTax" by its proponents has two virtues on its face that I do not challenge.

One is that it would favor savings, a "good thing"; and the other is that its monthly "prebate" would keep it from being regressive with regard to the poor and the lower middle class.

There are other claimed benefits which I will describe, but criticize.

Posted by: mark_in_austin | December 7, 2007 4:23 PM | Report abuse

Giuliani's status as GOP front runner is entirely a result of his celebrity status.

Giuliani can only win the GOP nomination if the conservatives cut themselves up so badly that the tiny rump of GOP moderates can scrape him through.

Clinton's position is more complex. Like Giuliani, she is a celebrity and has higher name recognition than her rivals.

Unlike Giuliani, Clinton advocates views acceptable, it not dear to the mainstream of the Democratic Party.

She has worked the hustings for years and has a huge and solid following among the party's activists, funders and office holders.

Democrats are still thinking through the options and ramifications of the election.

The four approved primary states are unlikely places for a break out or a popular groundswell to develop.

Florida or Michigan are less controllable and hence more reliable gauges of the vox populi.

If Clinton does not break out in the big state primaries occuring on 2/5/08, she is in trouble, though.

Posted by: pach12 | December 7, 2007 4:15 PM | Report abuse

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