I plan to be evenhanded in covering McCain and Obama tax talk, but it seems the news is all McCain this past week or so. Latest out--Carly Fiorina claimed that Obama's tax proposals (to make the tax cuts permanent only for those in the $250,000 or less bracket, which is rather high since it only requires a higher tax burden from the very upper crust) would cause tax increases for the 23 million small business owners in this country who file schedule C as sole proprietors. (Thanks to TaxProf and others for pointing out this story.)
That simply isn't correct. Very few small businesses have taxable income greater than $250,000--at most a few hundred thousand, which is far far short of 23 million. Here's a good discussion of this Fiorina Fuzzy Math issue on Times.com's "Swampland" by Jay Newton Small. Notice the language used by the campaigner. First, a statement is made that claims that Obama's $250,000 limit will increase taxes on 23 million small business owners. Second, when confronted with the facts, Fiorina makes two statements that are factually correct (there are in fact small business owners and small businesses with small incomes are definitely the place where most job creation takes plce) but that do not substantiate the politically useful claim that she made (that Obama's tax proposals would increase taxes on 23 million small business owners).
(By the way, skim the comments. It's one of those rare posts where people thank the reporter and note the importance of the new information provided. Rare, I suspect, because so few journalists seem to ask the hard questions these days.)
What are the facts? Obama's tax proposals will not increase taxes on 23 million small business owners. Even the very few small business owners who may be in the $250,000 an up tax bracket that would be affected by Obama's plan will receive other tax benefits (the health care plan) that Obama's campaign suggests would offset whatever increase they received.
I suspect, however, that Fiorina's saying it will make the falsehood a truth for dyed in the wool McCain supporters and lots of people who continue to vote against their economic interest because of some screwy history or something. Last week I received a series of emails from McCain supporters repeating the McCain campaign's misleading information (it's on their website) that Obama had "voted for" a tax increase for everybody making more than $32,000. Of course, the item referenced was a budget vote, not a tax increase vote; the item referenced would have (if it had been a tax vote) only increased taxes on those making more than $41,000 (or about $83,000 for a couple); and any tax increases even at that low range would be in the very low amounts (a couple of hundred a year); and the budget item didn't purport to be Obama's tax plan. I asked the emailer what his source for the incorrect information he spouted was (his email was headed "Obama is a liar"). He sent me back a link to the McCain campaign blog and to another right-wing blog. I sent him the information from FactCheck.org (available at this link) that debunks the McCain claim (which is now being used in TV ads in two states). He sent me an email back saying he still believed what the McCain campaign had said.
That is one of the discouraging facts about blogging, journalism, and politics today--many people simply will continue to believe whatever it is that they have decided to believe, no matter what new information is provided. Nonetheless, it is important that people like Jay Newton-Small continue to debunk the "bunkers" like Carly Fiorina.
I wonder, too, why McCain depends for economic advice on people like failed HP CEO Carly Fiorina and Phil "nation of whiners"- in -a -"mental recession" Gramm ? Neither has much credibility in terms of understanding and finding solutions for budget problems. Fiorina was fired for running Hewlett Packard into the ground. Gramm is a lobbyists' friend extraordinaire. Maybe the reason they are on the top of his adviser list is because nobody else really thinks much of his economic plans, which sound more like "pie in the sky" than legitimate government policymaking. McCain claims, after all, that his plan will balance the federal budget in four years while making all the Bush tax cuts permanent and adding more tax cuts for big corporate business and continuing military spending at its eat up the budget rate--and thus sound like something to get us deeper in the financial morass that privatization and wink-and-look-the-other-way-at-what-financial-institutions-are-doing executive policy has gotten us into over the last 8 years. Even some of those 300 economists backed off from their support when they actually found out a little bit more about the supposed "plan" that they had signed off on without seeing it.
PS. If you want to see some empirical data about the economy under Republican and Democratic presidents, AngryBear has some very good graphs, here.
Recent Comments