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The Difference Between 1993 and 2009 (Obama's Plan Raises Taxes)
Seeking Alpha ^ | 101208 | Anton Wahlman

Posted on 10/13/2008 12:22:25 AM PDT by Fred

At the center of Senator Obama's tax policy argument is that by raising taxes on the top 5% of income earners, we are only returning to President Clinton's 1993 tax increases. Let's for a moment leave aside that Obama really is looking to raise taxes on social security (above incomes of $103,000) and on everyone's capital gains, regardless of income. Rather, the Obama argument goes that because we had a relative economic boom following the 1993 tax increase, it's perfectly safe to raise taxes in 2009 as well.

Wrong. There is a major difference between 1993 and 2009 that Obama and McCain alike are both failing to articulate. In 1993, the U.S. was one of the world's lowest-tax countries, with Europe mostly at much higher rates, and most of the Asian economies too underdeveloped to be alternatives for investments and businesses. Eastern Europe was under a cloud of uncertainty and instability following the rapid demise of The Soviet Union on Christmas Day 1991. The 1993 tax increase left the U.S. as the leading free-market economy, albeit at a smaller margin than before.

As we enter 2009, the U.S. position in the world is extremely different than it was 16 years earlier. We are no longer the low-tax beacon of the major industrialized world. Numerous countries in Western Europe, Eastern Europe, Asia and elsewhere now have lower capital gains taxes than the U.S. The same goes for top marginal income tax rates, where Albania is at 10%, Estonia 13% and Russia 17%, just to mention a few. Here in the U.S., the current top rate is 36% for Federal, and if you live in NYC or California, you probably pay very close to 50% all-in. Our 15% long-term capital gains tax can't compete with the 0% rates in many other countries, but don't forget that many capital gains taxes aren't long-term, at which point you will pay 36% or higher.

The effect of the current high-tax policies is becoming an increasing disaster. There has been no employment growth in places such as Silicon Valley in the last decade, because U.S. companies are choosing to locate more employees in lower-tax areas such as China, India and Eastern Europe. Have you noticed the lack of IPOs in the U.S. this year? For the first time in 30 years, there were no venture-backed IPOs. This has a significant impact to the standard of living here at home.

In this context, it is strange to listen to Senator McCain saying repeatedly that he wants to "Keep taxes low." Well, if taxes aren't low, why does he want to keep them? We have some of the world's highest capital gains and income taxes, so we are hemorrhaging investments and human capital to those places where they are not taxed as much.

So what is the 2009 recipe to strengthen the U.S. economy? Clearly McCain is wrong about "keeping taxes low" because they are already way too high. As for Obama, he proposes an outright train wreck in terms of forcing investors, businesses and high-wage earners abroad. Rather, we should once and for all abolish the capital gains tax – whether for short-term gains, or long-term. We should also become competitive with the fastest-growing economies in the world by cutting the top Federal rate to below Albania's 10% rate. Given that some U.S. states and local governments have combined rates of around 10%, it would be appropriate to abolish our Federal income tax altogether. This would stop the hemorrhaging of investments, businesses and talented individuals leaving our country.

What about the budget deficit, you say? Wouldn't abolishing the income tax and capital gains taxes reduce tax revenue? Of course it would. So the answer is to cut government spending correspondingly. The Federal budget now exceeds $3 trillion, or $10,000 per U.S. citizen, of which the Department of Defense is little over 20%. Big ticket items are Medicare, Medicaid and Social Security, for starters. Medicare and Medicaid in particular, are hugely inefficient and unnecessarily bureaucratic ways to induce people to over-consume health care services, and should be abolished in favor of lower taxes that would lead to a booming economy. The list goes on, but the Federal budget can be cut from over $3 billion to around $2 billion immediately, followed by another cut down to $1 trillion over time as Social Security payments dwindle in favor of a private 401(k)-style private system. The government can also raise funds by selling property, including land. After all, various agencies of the U.S. government is by far the largest property owner in the country, and could fill several years worth of budget gaps by auctioning off vast amounts of lands and buildings no longer necessary when we cut off the bureaucracy and the socialist apparatus currently consuming our tax dollars.


TOPICS: Politics/Elections
KEYWORDS: capitalgains; economy; mccain; obama; obamatrufile; obamatruthfile

1 posted on 10/13/2008 12:22:25 AM PDT by Fred
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To: Fred
The whole Obama tax scheme aside, there is another painfull suprize on the very near horizon that is going to threaten every home owner, even those with paid off houses , living on fixed income. The houseing boom shot the prices of houses up, and in most areas, those prices are still up and around those values, with maybe a 2-5% decrease in value over the last few months. Now, most peoples houses are still worth double and triple what they were 5 years ago, except for those who bought in the last 2-3 years.

The "suprize" is many- MOST communities have not yet, or are now just starting to re-assess property taxes, and these drastic increases in value are going to double and triple peoples property tax bills, not to mention school taxes which are includedand are based on property values.

People who are now barely paying the bills and property taxes are going to be in for a big suprise over the next year or so.

For a lot of people, having to cough up 5-10,000 more at what ever time of year their municipality issues property tax bills will be beyond their means.

2 posted on 10/13/2008 12:34:34 AM PDT by Nathan Zachary
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To: rabscuttle385

The stupid Sarbanes Oxley legislation has been bad too. In 2007 not one IPO was made. Not one!

We are killing the goose that lays the golden egg.


3 posted on 10/13/2008 12:42:06 AM PDT by TenthAmendmentChampion (Lord please bless our nation with John McCain as president and Sarah Palin as Vice President! Amen.)
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To: Nathan Zachary

Good heavens, what state do you live in?? Taxes in Arizona on a $200K house are about $1500 per year, tops. California can be about the same depending on when you bought the house (last sale price is used to calculate taxes, which are still pretty low).


4 posted on 10/13/2008 12:43:57 AM PDT by TenthAmendmentChampion (Lord please bless our nation with John McCain as president and Sarah Palin as Vice President! Amen.)
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To: TenthAmendmentChampion
1500? LOL I was paying about $2500 20 years ago, for a 950 sq ft, two bedroom home in the burbs. We sold that place for $84K in ‘89.

As property values have increased around here, the mill rates have gone down. Even though we pay an outrageous rate compared to most other places in the country, tax increases have always been slow & steady. Unless taxing authorities jump the amount that they spend, increasing home values shouldn't increase the bottom line on property taxes.

5 posted on 10/13/2008 1:15:39 AM PDT by GoLightly
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To: Fred

It annoys me when people say that after all the fuss, Clinton was not so bad. Well as bad as Clinton was and he was bad, he did not hate America. That alone should show that people are in a lot worse situation with Obama.


6 posted on 10/13/2008 1:17:28 AM PDT by napscoordinator
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To: Fred
Ah, but what's the similarities between 1933 and 2009? That's the real question...
7 posted on 10/13/2008 1:22:23 AM PDT by 2ndDivisionVet (Barack Obama: In Error and arrogant -- he's errogant!)
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To: TenthAmendmentChampion
Toledo , OH $1500 a year on $68,000 house. City income tax of about 2.5% and the state income tax is 3 - 6 %. One of the highest utility rates in the country. The unions blame NAFTA and Bush... ha.

If it was not for family reasons I would be in TX right now. I would make a lot more there as a RN and save at least $10,000 in taxes a year. Maybe in four years but if Obama wins ( I don't think he will) I my not have a job here as a RN, no patients on job. Business and people are leaving here in droves.

8 posted on 10/13/2008 1:39:25 AM PDT by Total Package (TOLEDO, OHIO THE MRSA INFECTION IN THE STATE and the death of freedom)
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To: Nathan Zachary
People who are now barely paying the bills and property taxes are going to be in for a big surprise over the next year or so.

I remember reading about this happening in central Indiana last year. Many fixed income homeowners had to sell out.

9 posted on 10/13/2008 4:09:52 AM PDT by IamConservative (On 11/4, remember 9/11...)
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To: Total Package

In Ridgefield, CT, the average house is above $500,000 and the property tax on such a house would be about $8,000 per year.


10 posted on 10/13/2008 4:31:05 AM PDT by Koblenz (The Dem Platform, condensed: 1. Tax and Spend. 2. Cut and Run. 3. Man on Man)
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what a bum....and people still get taken in by this shyster...


11 posted on 10/13/2008 5:01:12 AM PDT by raygunfan
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To: Nathan Zachary
Now, most peoples houses are still worth double and triple what they were 5 years ago

Not here. Built house in 2000, could maybe get what I have i it today.

12 posted on 10/13/2008 5:10:53 AM PDT by CA_soon_gone
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To: Total Package

Yeah I got out of Ohio 25 yrs ago when Kucinich took Cleveland into bankruptcy.
Sadly my home state is becoming a junior version of Michigan.


13 posted on 10/13/2008 6:10:50 AM PDT by nascarnation
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To: Fred

There is something that is consitently missing in response to OBama’s plan to tax (punish) companies that send jobs “over seas.”

1)Companies don’t pay taxes. Taxes become a cost of doing business and raise the price of products and services. The tax burden trickles down to the consumer. WE pay the taxes.

2) The reason businesses relocate over seas is not primarily because of cheap labor. The market all companies want to compete it is the US. There is a lot of costs that are necessary to ship parts for assembly and ship products back to the US. The US is unfriendly to businesses in the TAX BURDEN department. TAXES create huge liabilities and require vast amounts of overhead in accounting and legal departments to legally follow the rules. The liability is significantly less overseas.

Raising taxes on big business drives up incentives to relocate overseas. But I don’t hear anyone making this case in the campaign.


14 posted on 10/13/2008 6:22:41 AM PDT by Tenacious 1 (Democrats are for Change - Let's run through a mine field at night wearing clown shoes!)
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To: Total Package
We don't pay property taxes here in many rural areas of Alaska; unorganized borough; not all that much government or beurocracy either. Most communities have one guy who owns most the town's businesses and keeps his employees on the council; and most the people like it that way overall.

Whenever the state wants to pave or do road constuction; everybody comes out against it, as they know soon after even the state repubs will want taxes for all their investment.

It works out pretty well actually if you are the kind of person who doesn't expect or want much from the govt. I have a 2400 sq ft cabin. I'd hate to think about what they'd soak me for in taxes if we had any.

No taxes, no regulation, law enforcement, extensive govt employees & services, comprehensive planning, ect ect. Alot more freedom the whole way around.

15 posted on 10/13/2008 6:27:23 AM PDT by Eska
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To: Fred

There is something that is consitently missing in response to OBama’s plan to tax (punish) companies that send jobs “over seas.”

1)Companies don’t pay taxes. Taxes become a cost of doing business and raise the price of products and services. The tax burden trickles down to the consumer. WE pay the taxes.

2) The reason businesses relocate over seas is not primarily because of cheap labor. The market all companies want to compete it is the US. There is a lot of costs that are necessary to ship parts for assembly and ship products back to the US. The US is unfriendly to businesses in the TAX BURDEN department. TAXES create huge liabilities and require vast amounts of overhead in accounting and legal departments to legally follow the rules. The liability is significantly less overseas.

Raising taxes on big business drives up incentives to relocate overseas. But I don’t hear anyone making this case in the campaign.


16 posted on 10/13/2008 6:27:37 AM PDT by Tenacious 1 (Democrats are for Change - Let's run through a mine field at night wearing clown shoes!)
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To: Fred
This paragragh deserves repeating:

We are no longer the low-tax beacon of the major industrialized world. Numerous countries in Western Europe, Eastern Europe, Asia and elsewhere now have lower capital gains taxes than the U.S. The same goes for top marginal income tax rates, where Albania is at 10%, Estonia 13% and Russia 17%, just to mention a few. Here in the U.S., the current top rate is 36% for Federal, and if you live in NYC or California, you probably pay very close to 50% all-in. Our 15% long-term capital gains tax can't compete with the 0% rates in many other countries, but don't forget that many capital gains taxes aren't long-term, at which point you will pay 36% or higher.

The effect of the current high-tax policies is becoming an increasing disaster. There has been no employment growth in places such as Silicon Valley in the last decade, because U.S. companies are choosing to locate more employees in lower-tax areas such as China, India and Eastern Europe. Have you noticed the lack of IPOs in the U.S. this year?

17 posted on 10/13/2008 6:27:47 AM PDT by FreedomProtector
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To: Fred

Obama doesn’t have a clue about economic development. Remember, he accomplished zilch as a community agitator other than advancing his own career. If the loons control all 3 branches, we’re screwed.


18 posted on 10/13/2008 6:27:52 AM PDT by Harry Wurzbach (Rep. Thaddeus McCotter is my hero.)
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To: Fred

Obama doesn’t have a clue about economic development. Remember, he accomplished zilch as a community agitator other than advancing his own career. If the loons control all 3 branches, we’re screwed.


19 posted on 10/13/2008 6:28:42 AM PDT by Harry Wurzbach (Rep. Thaddeus McCotter is my hero.)
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To: Total Package
We don't pay property taxes here in many rural areas of Alaska; unorganized borough; not all that much government or beurocracy either. Most communities have one guy who owns most the town's businesses and keeps his employees on the council; and most the people like it that way overall.

Whenever the state wants to pave or do road constuction; everybody comes out against it, as they know soon after even the state repubs will want taxes for all their investment.

It works out pretty well actually if you are the kind of person who doesn't expect or want much from the govt. I have a 2400 sq ft cabin. I'd hate to think about what they'd soak me for in taxes if we had any.

No taxes, no regulation, law enforcement, extensive govt employees & services, comprehensive planning, ect ect. Alot more freedom the whole way around.

20 posted on 10/13/2008 6:28:50 AM PDT by Eska
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To: Total Package
We don't pay property taxes here in many rural areas of Alaska; unorganized borough; not all that much government or beurocracy either. Most communities have one guy who owns most the town's businesses and keeps his employees on the council; and most the people like it that way overall.

Whenever the state wants to pave or do road constuction; everybody comes out against it, as they know soon after even the state repubs will want taxes for all their investment.

It works out pretty well actually if you are the kind of person who doesn't expect or want much from the govt. I have a 2400 sq ft cabin. I'd hate to think about what they'd soak me for in taxes if we had any.

No taxes, no regulation, law enforcement, extensive govt employees & services, comprehensive planning, ect ect. Alot more freedom the whole way around.

21 posted on 10/13/2008 6:29:44 AM PDT by Eska
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To: Total Package
They need RN’s here in Wyoming and no income tax. Sales tax of 5 or 6% McCain will carry the state. My county is 71% Republican so we have some nice folks.
22 posted on 10/13/2008 6:45:28 AM PDT by Big Horn (I bac Mac)
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To: TenthAmendmentChampion
Good heavens, what state do you live in?? Taxes in Arizona on a $200K house are about $1500 per year, tops.

NJ - $650K house, property taxes are $17,000 a year.

23 posted on 10/13/2008 6:48:19 AM PDT by T. Jefferson
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To: TenthAmendmentChampion

I live in western NY and I pay $10,200 ($7000 for school and $3200 county) taxes on $300K.


24 posted on 10/13/2008 7:44:41 AM PDT by Ouderkirk (I will not vote for Obama not because he is black, but because he is RED)
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To: TenthAmendmentChampion

I live in western NY and I pay $10,200 ($7000 for school and $3200 county) taxes on $300K.


25 posted on 10/13/2008 7:47:51 AM PDT by Ouderkirk (I will not vote for Obama not because he is black, but because he is RED)
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To: Fred
Right now there is a Crisis of Confidence in the economy and in our leaders' ability to come up with a solution. It is a direct result of the sub-prime mortgage crisis. The securities held by the banks and investment companies are currently worthless because there is no confidence. Without confidence the credit markets have started to freeze up.

The government is trying to get things moving with billions in buyouts and rescue money but few have confidence that the government will make the right choices on where to use those billions.

The current situation on Wall St. reflects the extreme uncertainty in the economy. People are looking for a safe place to put their money and not finding it. If the US makes the wrong moves now we could see a drain of capital from our country that would dwarf the billions flowing to the oil producing countries when it was $140/bbl.

If investors see the US as being an uncertain and unfriendly place to invest we won't see a recovery anytime soon.

26 posted on 10/13/2008 7:56:39 AM PDT by eggman (Obama is now The Zero. He used to be The One but he added The Negative One=Joe Biden.)
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To: Fred

Spot on.


27 posted on 10/13/2008 8:02:41 AM PDT by Robert DeLong
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To: TenthAmendmentChampion

I live in Phoenix and pay property taxes of $3800 on an $800K house........ sales taxes here are about 8%. I’d rather get hit with sales tax than income tax or property tax.


28 posted on 10/13/2008 8:22:24 AM PDT by phoenix07
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To: Total Package

Upper Arlington, OH - $7000 per year on a house we sold for $285K that the county assessed at $320K. What a rip!


29 posted on 10/13/2008 8:23:37 AM PDT by phoenix07
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To: Total Package

I hope you are right. I’m in a suburb of Cleveland and I know the Plain Dealer said it’s tight but I think ACORN may actually end up tipping this thing toward Obama.

I ran into someone the other day who told me she’s voting for Obama; she doesn’t like Palin. Ugh..... Unreal. She also said McCain is in “bad health.”

What do these people have crystal balls?


30 posted on 10/13/2008 8:39:23 AM PDT by Paved Paradise
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To: TenthAmendmentChampion
Property taxes are paid by county. so, before one buys be sure to know what the prop taxes are for that county and how they are calculated. Most counties had a process to lower ones prop taxes if the house drops in value. The property taxes can vary alot depending on counties. I have notice that when a state has no income tax their prop taxes tend to be higher. But saving on no state income tax is absolutely great. I love it.

To the freeper who is working toward Texas, best to you, and once you get there, enjoy paying no state income TX.. Texas has a superior business model for businesses, a large economy, and their legislatures only meet part-time....
31 posted on 10/13/2008 9:00:23 AM PDT by Fred (The Democrat Party is the Nadir of Nihilism)
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To: Total Package

I lived in Dayton OH in the early 80’s. I remember local income taxes, high property taxes and “user fees” for everything else.


32 posted on 10/13/2008 9:12:14 AM PDT by wjcsux (0BAMA, The One, Piss be on him. Keep the change.)
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To: Fred

This makes much too much sense (and cents and dollars for that matter) to be implemented.


33 posted on 10/13/2008 9:16:25 AM PDT by diamond6 (Is SIDS preventable? www.Stopsidsnow.com)
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To: Ouderkirk

NH wasn’t as bad. We paid 9k + on 270k house that’s now worth 220k.


34 posted on 10/13/2008 9:43:55 AM PDT by newnhdad (Naval Aviator or "community organizer", you make the call.)
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To: IamConservative
I remember reading about this happening in central Indiana

That was not due to increasing home values. That was due to a complete change in the way houses were taxed. And a sneaky democrat ex-mayor's raise in the tax percentage.

35 posted on 10/13/2008 11:49:53 AM PDT by ReagansShinyHair
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To: Paved Paradise
As I listen to my patients gripe about the election. The TV is on in their room and it is just one obama/McCain ad after another here in Toledo,Oh. Toledo is 80% Democrat, union thug socialist.

I had this retired teacher public schools for 40 years tell me she has always voted democrat. She even thought carter was not that bad, "he just did not know how to delegate" ( loved Clinton ). She said she is not voting this year because she does not trust Obama he came up to fast and their is something just not right. Now I have had a lot a patients like her they are not going to vote for Obama, now they not going to vote for McCain either but thats normal here.

The difference between Clinton and Obama is that Clinton did not hate his country. The teacher I had as a patient was one of the most educated and well traveled people I had ever spoken with. I could have disused issues in a civil manner with her.

However I do not bring up politics or debate with my patients it is not the place to do so. I just listen and nod, and sometimes agree ( even if they are dead wrong ).

I do think McCain is going to win Ohio. He will not win Toledo, but there will be enough democrats that just won't vote for Obama so that McCain wins the state. McCain is not my first choice but I do like Palin. If it were not for Obama I most likely would have voted third party to send a massage to the RNC. T. Package RN

36 posted on 10/13/2008 2:25:14 PM PDT by Total Package (TOLEDO, OHIO THE MRSA INFECTION IN THE STATE and the death of freedom)
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To: Total Package

You make some good points. I didn’t like Bill Clinton or Hillary but they weren’t terrifying to me. Of course, I had serious concerns. Barack Obama is one scary movie.

I also agree with what you said about some of the voters. My brother is a good case in point. He lives in Chicago and HATES Obama; told me a year ago that BO was a big jerk and hadn’t done squat for Chi-Town. My brother doesn’t like McCain though (he’s socially very liberal)so he’s not planning to vote either. Oy!

Good talking to you neighbor. Do you guys still have Tony Packo’s up there?


37 posted on 10/13/2008 6:19:44 PM PDT by Paved Paradise
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