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Barack Obama on Tax ReformJunior Senator (IL); President-Elect |
- Sub-sections under Tax Reform:
- Voting Record
- Other issues under Tax Reform
FactCheck: Tax cut only helps 75% or workers, not 95%
Obama said his stimulus program provides a tax cut for "95% of working
households" and later said that a cut would go to 95% of "working
families." That calls for some explanation. The key words are "working"
and "cut."
He's referring to the "making work pay" refundable tax credit, which is
only available to workers. There would be no credit for retirees or
those who are unemployed; a more modest
75.5% of all households would benefit, whether their members are working
or not.It is also questionable whether all of the tax refunds can properly be called "tax cuts." The credit is refundable and, therefore, is going to many who earn so little that they pay no federal income taxes in the first place. The White House calls them tax cuts, but the nonpartisan Congressional Budget Office officially scores the bill's refundable credits under "direct spending."
FactCheck: Yes, McCain wants Bush cuts in place after 2011
The Statement:Obama compared his tax proposal to that of
his opponent: �McCain and I are both offering tax cuts. The difference
is, he wants to give the average Fortune 500 CEO a $700,000 tax cut.�The Facts:Obama
bases the
$700,000 claim on a Fortune 500 survey that showed the average CEO of
those companies earned a salary of $12.8 million in 2007. What the
statement considers a tax cut would be renewing President Bush�s current
cuts, which are scheduled to expire by
January 2011. McCain has said he would push to renew those cuts, while
Obama wants to let the cuts run out for the wealthiest Americans and
offer new ones to people who make less money. So, in effect, what
Obama calls a tax cut would be keeping taxes for those wealthy CEOs the
same as they are now--instead of letting them revert to what they were
before Bush�s cuts. The Verdict: True, but incomplete.
My plan cuts taxes for most small businesses & 95% of people
McCAIN: He wants to raise taxes. Sen. Obama�s secret that you don�t know
is that his tax increases will increase taxes on 50% of small business
revenue. Small businesses across America will have to cut jobs and will
have their taxes increase and won�t be
able to hire because of Sen. Obama�s tax policies. OBAMA: I want to
provide a tax cut for 95% of Americans. If you make less than a quarter
of a million dollars a year, you will not see a single dime of your
taxes go up. If you make $200,000 a year or
less, your taxes will go down. Now, Sen. McCain talks about small
businesses. Only a few percent of small businesses make more than
$250,000 a year. The vast majority of small businesses would get a tax
cut under my plan. And we provide a 50% tax credit
so that they can buy health insurance for their workers, because there
are an awful lot of small businesses that want to do right by their
workers but they just can�t afford it. Some small business owners can�t
even afford health insurance for themselves
Yes, earmarks are abused, but small compared to tax cuts
McCAIN: Earmarking [is like a] �gateway drug� because it�s a gateway to out-of-control spending & corruption.OBAMA:
McCain is absolutely right that the earmarks process has been abused,
which is why I suspended any requests for my home state, whether
it was for senior centers or what have you, until we cleaned it up. He�s
also right that oftentimes lobbyists and special interests are the ones
that are introducing these kinds of requests, although that wasn�t the
case with me. Let�s be clear: earmarks
account for $18 billion in last year�s budget. McCain is proposing $300
billion in tax cuts to some of the wealthiest corporations &
individuals in the country. Now $18 billion is important; but $300
billion is really important. In his tax plan, you woul
have CEOs of Fortune 500 companies getting an average of $700,000 in
reduced taxes, while leaving 100 million Americans out. So my attitude
is we�ve got to grow the economy from the bottom up. What I�ve called
for is a tax cut for 95% of working families
No $300 billion on tax cuts for those who don�t need them
Q: Are you willing to acknowledge that this financial crisis is going to affect the way you rule the country, as president? A:
There is no doubt that it�s going to affect our budgets. There is no
doubt about it. Even if we get all $700 billion back,
let�s assume the markets recover; we�re holding assets long enough that
eventually taxpayers get it back. In the short term, there�s an outlay.
We may not see that money for a while. Because the economy is slowing
down, we can also expect less tax
revenue. So there�s no doubt that as president, I�m going to have to
make some tough decisions. We�ve got to know what our values are and who
we�re fighting for and what our priorities are. If we are spending $300
billion on tax cuts for people who don�t
need them and weren�t even asking for them and we are leaving out health
care, which is crushing on people all across the country, then we have
made a bad decision, and I want to make sure we�re not shortchanging our
long-term priorities.
Tax cut for 95% of all working families, not corporations
Change means a tax code that rewards the American workers and small
businesses who deserve it. I will stop giving tax breaks to corporations
that ship jobs overseas, and start giving them to those that create
jobs in America. I will eliminate capital
gains taxes for the small businesses that create the high-wage,
high-tech jobs of tomorrow. I will cut taxes--cut taxes--for 95% of all
working families. In an economy like this, the last thing we should do
is raising taxes on the middle-class.
Adjust capital gains tax up to where Reagan set it
On September 18, 2007, when Obama laid out his tax fairness plan for the
middle class, he proposed adjusting the capital gains rate "to
something closer to--but no greater than--the rates Ronald Reagan set in
1986."
The problem is that the capital gains rate has dropped since the days of
Ronald Reagan. Stated less rhetorically and more straightforwardly,
Obama was proposing to RAISE the long-term capital gains tax from 15
percent to 28 percent, nearly doubling it.Source: Obama Nation, by Jerome Corsi, p.244 Aug 1, 2008
Tax cut for middle class and relief to struggling homeowners
Washington should not benefit the special interests at the expense of
ordinary Americans; and that we�re rewarding not just wealth, but the
work and workers who create it. That�s why I�ll offer a middle class tax
cut so we can lift up hardworking
families, and give relief to struggling homeowners so we can end our
housing crisis, and provide training to young people to work the green
jobs of the future, and invest in our infrastructure so we can create
millions of new jobs.
Expand the Earned Income Tax Credit
We have to fight for all those young men standing on street corners with
little hope for the future besides ending up in jail. We have to break
the cycle of poverty and violence that�s gripping too many neighborhoods
in this country.
That�s why I�ll expand the Earned Income Tax Credit--because it�s one of
the most successful anti-poverty measures we have.
Maintain the inheritance tax on wealthy
Obama's plan to improve economic opportunity for all is fourfold. He
wants to maintain an inheritance tax on our wealthiest citizens that
others have fought to end; he wishes to introduce universal preschool
education to give poorer children the same
opportunities as their richer classmates; he wants to improve our public
education system and encourage college education for all; and he wants
to make sure that all artificial barriers to personal advancement are
eliminated in the workplace.
Obama has realized that it is impossible if a society bases all
privilege and opportunity primarily on the wealth of one's parents. What
Obama finds most disturbing about the inheritance tax debate is that
the most important implication of allowing large
inheritances is that it will indeed create a society based on inherited
wealth privilege and opportunity. He believes that we will again become
what we broke away from, an indentured people to a privileged class.
Middle class tax cut helps offset rising cost of gas & food
These are challenging times. That�s why I spent last week talking about
immediate steps we need to take to provide working Americans with
relief. A broad-based, middle class tax cut, to help offset the rising
cost of gas and food.
A foreclosure prevention fund, to help stabilize the housing market. A
health care plan that lowers costs and gives those without health
insurance the same kind of coverage members of Congress have. A
commitment to retirement security that stabilizes
Social Security, and provides workers a means to increase savings. And a
plan to crack down on unfair and sometimes deceptive lending in the
credit card and housing markets, to help families climb out of crippling
debt, and stay out of debt in the first
place.These steps are all paid for, and designed to restore balance
and fairness to the American economy after years of Bush Administration
policies that tilted the playing field in favor of the wealthy and the
well-connected.
I�m running against failed policy of profligate GOP spending
Q: The GOP is going to paint you as a classic tax-and-spend liberal Democrat. Are you ready to handle that kind of assault? A:
Absolutely. Because think about what I am going to be running against:
the failed policies of the Bush administration, which
John McCain wants to continue. I don�t think there is anybody in this
country who thinks that, right now, we have got a government that�s
managed our domestic policies well. And, so, we can talk about the
slogans of tax and spend or fiscal conservatism,
but the fact of the matter is, we have had an administration that�s been
profligate, that has raised our national debt to a record level. We
have seen a lack of shared prosperity. So, you�ve got CEOs making more
in a day than ordinary workers are making
in a year, and it�s the CEO that�s getting the tax break, instead of the
workers.Q: He�s going to say you�re going to raise their taxes. What are you going to say?
A: I will raise CEO taxes. There is no doubt about it.
I will raise CEO taxes, no doubt about it
Q: McCain is going to say you�re going to raise taxes.A: I will raise CEO taxes. There is no doubt about it. Q: What about the average American?
A: If you are a CEO in this country, you will probably pay more taxes. They won�t be prohibitively high. You�re going to be paying roughly what you paid in the �90s, when CEOs were doing just fine.
Q: So, you want to just eliminate the Bush tax cuts?
A: I want to eliminate the Bush tax cuts. And what I have said is, I will institute a middle-class tax cut. So, if you�re making $75,000, if you�re making $50,000 a year, you will see an extra $1,000 a year offsetting on your payroll tax.
Q: Define middle class.
A: Well, look, I think that the definitions are always a little bit rough, but if you�re making $100,000 a year or less, then you�re pretty solidly middle class, and you deserve relief right now, as opposed to paying higher taxes. But people who are making over $200,000 or $250,000 have benefited the most from economic growth.
Under Bill Clinton, rich people didn�t feel oppressed
Q: Is McCain going to go after you as another classic liberal tax and spender?A:
Well, I�m going to go right back at McCain, because look at his tax
proposals. He not only wants to continue some of the Bush tax cuts for
the wealthiest Americans and
corporations, he actually wants to extend them, and he hasn�t told us
really how he�s going to pay for them. It is irresponsible. And the
irony is he said it was irresponsible. When George Bush initiated these
tax cuts in 2001, McCain said, �This is
shameful.� He said that it offended his conscience, he said, for us to
give tax breaks to the wealthy, particularly at a time of war. If you
look at my approach to taxation, what have I said? I said I would cut
taxes for people making $75,000 a year or
less. I�d cut taxes for seniors who are making $50,000 a year or less.
It is true that I would roll back the Bush tax cuts on the wealthiest
Americans back to the level they were under Bill Clinton, when I don�t
remember rich people feeling oppressed.
No tax increase if earning under $250K; tax cuts under $75K
Q: Can you make an absolute, read-my-lips pledge that there will be no
tax increases of any kind for anyone earning under $200,000 a year?CLINTON: I will let the taxes on people making more than $250,000 a year go back to the rates that they were
paying in the 1990s.Q: Senator Obama, would you take the same pledge? No tax increases on people under $250,000?
OBAMA: I not only have pledged not to raise their taxes, I�ve been the first candidate in this race to specifically say I would cut their taxes. We are going to offset the payroll tax, the most regressive of our taxes, so that families who are middle-income individuals making $75,000 a year or less, that they would get a tax break so that families would see up to $1,000 worth of relief.
Q: You both have now just taken this pledge on people under $250,000 and $200,000.
OBAMA: Well, it depends on how you calculate it. But it would be between $200,000 and $250,000.
Raise capital gains tax for fairness, not for revenue
Q: You favor an increase in the capital gains tax, saying, �I certainly
would not go above what existed under Bill Clinton, which was 28%.� It�s
now 15%. That�s almost a doubling if you went to 28%. Bill Clinton
dropped the capital gains tax to 20%, then
George Bush has taken it down to 15%. And in each instance, when the
rate dropped, revenues from the tax increased. And in the 1980s, when
the tax was increased to 28%, the revenues went down.A: What I�ve
said is that I would look at raising the
capital gains tax for purposes of fairness. The top 50 hedge fund
managers made $29 billion last year--$29 billion for 50 individuals.
Those who are able to work the stock market and amass huge fortunes on
capital gains are paying a lower tax rate than
their secretaries. That�s not fair.Q: But history shows that when you drop the capital gains tax, the revenues go up.
A: Well, that might happen or it might not. It depends on what�s happening on Wall Street and how business is going.
Tax cut for seniors and those making $75,000 a year or less
Everywhere you go, you meet people who are working harder for less,
wages and incomes have flatlined, people are seeing escalating costs of
everything from health care to gas at the pump. In some communities,
they have been struggling for decades now.
This has to be a priority of the next president. We have to restore a
sense of fairness & balance to our economy. We�ve got to stop giving
tax breaks to companies that are shipping jobs overseas and invest
those tax breaks in companies that are investing
here in the US. We have to end the Bush tax cuts to the wealthy and to
provide tax breaks to middle-class Americans and working Americans who
need them. If you are making $75,000 a year or less, I want to give an
offset to your payroll tax that will mean
$1,000 extra in the pockets of ordinary Americans. Senior citizens
making less than $50,000, you shouldn�t have to pay income tax on your
Social Security. We pay for these by closing tax loopholes and tax
havens that are being manipulated.
I�m not bashful about it: wealthy will pay more taxes
Q: If either one of you become president, and let the Bush tax cuts
lapse, there will be effectively tax increases on millions of Americans.OBAMA: On wealthy Americans.CLINTON: That�s right.
OBAMA: I�m not bashful about it.
CLINTON: Absolutely
OBAMA: I suspect a lot of this crowd--it looks like a pretty well-dressed crowd--potentially will pay a little bit more. I will pay a little bit more. But that investment will pay huge dividends over the long term, and the place where it will pay the biggest dividends is in Medicare and Medicaid. Because if we can get a healthier population, that is the only way over the long term that we can actually control that spending that is going to break the federal budget.
CLINTON: It�s just really important to underscore here that we will go back to the tax rates we had before George Bush became president. And my memory is, people did really well during that time period. And they will keep doing really well.
Stimulus package: $500 tax cut, & Social Security supplement
Q: How much money would your stimulus plan put in the pockets of the average citizen?A:
It is absolutely critical right now to give a stimulus to the economy.
We�ve got to get tax cuts into the pockets of hard-working Americans
right away.
And it is important for us to make sure that they are not just going to
the wealthy. They should be going to folks who are making $75,000 a year
or less, and they should be going to folks who only pay payroll tax,
but typically are not paying income tax.
Q: Do you agree with Sen. Clinton that $650 is a good number for a tax rebate?
A: Well, I think that we are going to have to get some immediate money. What I say is, $500 for a tax rebate per typical family. But also, for senior citizens, a supplement to their Social Security check, because they get that every month. That would provide seniors all across the country right away some money to help pay for their heating bills and other expenses that they�ve got right now.
Restore progressive tax; close loopholes; relief to seniors
There has to be a restoration of balance in our tax code. We are going
to offset some of the payroll taxes that families who are making less
than $50,000 a year get a larger break. I want to make sure that seniors
making less than $50,000, that they get
some relief in terms of the taxes on their Social Security. Those kinds
of progressive tax steps, while closing loopholes and rolling back the
Bush tax cuts to the top 1 percent, simply restores some fairness and a
sense that we�re all in this together.
Trillion dollar giveaway: the Paris Hilton Tax Break
Obama said, �Domestically, our national debt and budget constrain us in
ways that are going to be very far-reaching. And I think whoever is
elected in
2008 is going to be cleaning up the fiscal mess that was created as a
consequence of the president�s tax cuts.� Obama opposed repealing the
estate tax: �Let�s call this trillion dollar giveaway what it is--the
Paris Hilton Tax Break. It�s about giving billions of dollars to
billionaire heirs and heiresses as a time when American taxpayers just
can�t afford it.�
Obama has proposed to �reverse some of those tax cuts that went to the
wealthiest Americans.� As Obama put it, �It�s not as if rich people were
suffering under Bill Clinton.�
Reduce Bush tax cuts to pay for health care & other programs
Q: Do you agree that the rich aren�t paying their fair share of taxes? A:
There�s no doubt that the tax system has been skewed. And the Bush tax
cuts--people didn�t need them, and they weren�t even asking for them,
and that�s why they need to be less,
so that we can pay for universal health care and other initiatives. But I think this goes to a broader question, and that is, are we willing to make the investments in genuine equal opportunity in this country? People aren�t looking for charity. We talk about welfare and we talk about poverty, but what people really want is fairness. They want people paying their fair share of taxes. They want that money allocated fairly.
One of the distressing things about Katrina was the fact that we have not made systematic investments. And the only way we�re going to make it is by making sure that those of us who are fortunate enough to have the money actually make a contribution.
Estate tax only affects the wealthiest 1/2 of 1%
We have to stop pretending that all cuts are equivalent or that all tax
increases are the same. Ending corporate subsidies is one thing;
reducing health-care benefits to poor children is something else. At a
time when ordinary families are feeling hit
from all sides, the impulse to keep their taxes as low as possible is
honorable. What is less honorable is the willingness of the rich to ride
this anti-tax sentiment for their own purposes.Nowhere has this
confusion been more evident than in the
debate surrounding the proposed repeal of the estate tax. As currently
structured, a husband and wife can pass on $4 million without paying any
estate tax. In 2009, this figure goes up to $7 million. The tax thus
affects only the wealthiest one-third of
1% in 2009. Repealing the estate tax would cost $1 trillion, and it
would be hard to find a tax cut that was less responsive to the needs of
ordinary Americans or the long-term interests of the country.
Specific tax relief for families making $75,000 or less now
I have proposed specific tax relief now, immediately, so that we would
offset some of the payroll tax, that we would immediately put some
additional dollars in the pockets of American families, making $75,000 a
year or less, to not only stimulate the
economy, but also to balance out a tax code. I would pay for it
specifically by closing tax loopholes & tax havens. What we�ve had
is a top-down agenda that is skewed toward the wealthiest Americans. It
is making worse some of the trends of globalization
Bush tax cuts help corporations but not middle class
Middle class families are getting squeezed. The new jobs being created
in Illinois pay an average of $15,000 less than the jobs that we�ve lost
- and fewer offer real benefits. Health insurance premiums and the cost
of a college education have
skyrocketed since the beginning of the Bush Administration. In the past
three years, corporate profits have increased more than 60%. Workers are
being paid just 3% more. It wouldn�t be fair or accurate to blame
all of this on the Bush Administration.
It is fair, however, to say that they haven�t done much to help. The tax
cuts they�ve offered have barely made a dent in reducing the burden on
middle class families, while driving our nation trillions of dollars
deeper into debt.
They continue to support tax breaks for corporations who export jobs
overseas, and have refused to enforce provisions within existing trade
agreements against countries who engage in unfair trade practices.
Tax incentives to create jobs at home instead of offshore
Obama today said companies creating jobs in America should be rewarded
with tax cuts rather than giving tax incentives to companies that move
jobs offshore. �Right now, we have a tax code that gives incentives for
companies to move offshore.
Instead, we must have a tax code that rewards companies that are doing
the right thing by investing in American workers and investing in
research and development here in the United States,� said Obama. �Our
government has to be looking out for
these people who are working hard everyday trying to make ends meet and
right now we�ve got a set of policies that are not reflective of that.�
Obama�s plan to create quality jobs in Illinois will:- Close loopholes that encourage companies to move jobs abroad.
- Reward companies that create quality jobs in America.
- Ensure fair trade by enforcing existing trade agreements and strengthening future trade agreements.
- Provide needed assistance for displaced workers.
Last thing we need now is a permanent tax cut
We heard the President say he wants to make tax cuts for the wealthiest
Americans permanent, when we know that at a time of war and economic
hardship, the last thing we need is a permanent tax cut for
Americans who don�t need them and weren�t even asking for them. What we
need is a middle class tax cut, and that�s exactly what I will provide
as President.
Barack Obama on Voting Record
FactCheck: Voted for non-binding tax increase on $42K income
McCain said--and Obama denied--that Obama had voted to increase taxes on
�people who make as low as $42,000 a year.� McCain was correct--with
qualification.Yes, as we�ve said before, Obama did in fact vote for a
budget resolution that called for highe
federal income tax rates on a single, non-homeowner who earned as little
as $42,000 per year. A couple filing jointly, however, would have had
to earn at least $83,000 per year to be affected. A family of four with
income up to
$90,000 would not have been affected. The resolution actually would not have altered taxes without additional legislation. It called generally for allowing most of the 2001 and 2003 Bush tax cuts to expire. McCain is referring to the provision that would have allowed the 25% tax bracket to return to 28%. The tax plan Obama now proposes, however, would not raise the rate on that tax bracket.
GovWatch: didn�t vote to raise taxes 94 times; at most 54
The McCain campaign and the Republican National Committee both claim
that Obama has voted 94 times �for higher taxes.� We find that their
count is padded. After looking at every one of the 94 votes that the RNC
includes in its tally, we find:- 23 were for measures that would have produced no tax increase at all; they were against proposed tax cuts.
- 11 votes the GOP is counting would have increased taxes on those making more than $1 million a year
- The GOP included a total of 17 votes on 7 measures, effectively padding their total by 10.
Voted YES on increasing tax rate for people earning over $1 million.
CONGRESSIONAL SUMMARY: To put children ahead of
millionaires and billionaires by restoring the pre-2001 top income tax
rate for people earning over $1 million, and use this revenue to invest
in LIHEAP; IDEA; Head Start; Child Care; nutrition; school construction
and deficit reduction.SUPPORTER'S ARGUMENT FOR VOTING YES:Sen.
SANDERS: The wealthiest people in the country have not had it so good
since the 1920s. Their incomes are soaring, while at the same time the
middle class is shrinking, and we have by far the highest rate of
childhood poverty of any major country. The time is now to begin
changing our national priorities and moving this country in a different
direction. This amendment restores the top income tax bracket for households earning more than $1 million a year, it raises $32.5 billion over 3 years, and invests that in our kids, including $10 billion for special education. OPPONENT'S ARGUMENT FOR VOTING NO:Sen. KYL: The problem is we are spending the same dollar 3 or 4 times, it appears. The Sanders amendment is paid for by raising taxes another $32.5 billion, ostensibly from the rich; that is to say, by raising taxes on people who make over $1 million a year. Here is the problem with that. The budget on the floor already assumes the expiration of the current tax rates; that is to say, the rates on the highest level go from 35% to 39.6%, and that money is spent. If you took all the top-rate income, you would come up with $25 billion a year, not even enough to meet what is here, and that money has already been spent. The reality is somewhere or other, somehow, more taxes would have to be raised. I don't think the American people want to do that, particularly in the current environment. LEGISLATIVE OUTCOME:Amendment rejected, 43-55
Voted NO on allowing AMT reduction without budget offset.
CONGRESSIONAL SUMMARY:To exempt from pay-as-you-go
enforcement modifications to the individual alternative minimum tax
(AMT) that prevent millions of additional taxpayers from having to pay
the AMT.SUPPORTER'S ARGUMENT FOR VOTING YES:Sen.
GRASSLEY: The Senate voted to make sure that middle-class America didn't
pay the AMT, and we did it without an offset, by a vote of [about 95%].
So here we are again with an opportunity to say to middle-class America
that we are not going to tax the people who were not supposed to be hit
by the AMT. This amendment gives us an opportunity to get over that
hurdle that is in this budget resolution that, under pay-go, you would
have to have an offset for the AMT. Unless my amendment is adopted, the
25 million families who will be hit by the AMT increase will get a tax
increase of over $2,000 apiece. They deserve a guarantee of relief.OPPONENT'S ARGUMENT FOR VOTING NO:
Sen. CONRAD: If you want to blow a hole in the budget as big as all
outdoors, here is your opportunity--a trillion dollars not paid for, a
trillion dollars that we are going to go out and borrow from the Chinese
and Japanese. That makes absolutely no sense. I urge my colleagues to
vote no.LEGISLATIVE OUTCOME:Amendment rejected, 47-51
Voted NO on raising the Death Tax exemption to $5M from $1M.
CONGRESSIONAL SUMMARY:To protect small businesses, family
ranches and farms from the Death Tax by providing a $5 million
exemption, a low rate for smaller estates and a maximum rate no higher
than 35%.SUPPORTER'S ARGUMENT FOR VOTING YES:Sen. KYL:
This amendment is a reprise of what we did last year in offering to
reform the estate tax, sometimes referred to as the death tax. Now, in
the budget itself, there is a provision to allow the death tax to be
changed from the current law to a top rate of 45% and an exempted amount
of $3.5 million, and there are some other features. My amendment would
reduce that top rate to no higher than 35% so that if you had more than
one rate, at least the top rate could not exceed 35%, and both of the
two spouses would have a $5 million exempted amount before the estate
tax would kick in. Now, the reason for my amendment is: current law [is]
getting up to a high rate of 55% and an exempted amount of either $2
million or
$1 million, probably $1 million--a continued unfair burden on primarily
America's small businesses and farms.OPPONENT'S ARGUMENT FOR VOTING NO:Sen. CONRAD: This amendment would virtually eliminate the estate tax. Let me say why. Let me first say there is no death tax in the country. Of course, if you poll people and you ask them: Do you want to eliminate the death tax? they will say sure. But you are not going to pay any tax when you die unless you have $2 million. There is no death tax in America. There is a tax on estates. At today's level of $2 million, that affects only 0.5% of estates. When the exemption reaches $3.5 million in 2009, 0.2% of estates will be taxed. If the amendment is agreed to, we would be borrowing money in the name of 99.8% of the American people, borrowing primarily from China & Japan, to give it to the Warren Buffets, the Paris Hiltons, & others of enormous wealth in this country.
LEGISLATIVE OUTCOME:Amendment rejected, 50-50
Voted NO on repealing the Alternative Minimum Tax.
Amendment would accommodate the full repeal of the Alternative Minimum
Tax, preventing 23 million families and individuals from being subject
to the AMT in 2007, and millions of families and individuals in
subsequent years. Proponents recommend voting YES because:This amendment repeals the AMT. Except for the telephone tax, the alternative minimum tax is the phoniest tax we have ever passed. The AMT, in 1969, was meant to hit 155 taxpayers who used legal means to avoid taxation, under the theory that everybody ought to pay some income tax.
This very year, more than 2,000 people who are very wealthy are not paying any income tax or alternative minimum income tax. So it is not even working and hitting the people it is supposed to hit. Right now, this year, 2007, the year we are in, there are 23 million families that are going to be hit by this tax. It is a phony revenue machine, over 5 years, $467 billion dollars. We are going to have to have a point of order this year to keep these 23 million taxpayers from paying this tax. We might as well do away with it right now, once and for all, and be honest about it.
Opponents recommend voting NO because:
The reality of the budget resolution is this may not have anything to do with eliminating the alternative minimum tax. The one thing it will do is reduce the revenue of the Government over the next 5 years by $533 billion, plunging us right back into deficit. Look, we can deal with the AMT. We have dealt with it in the underlying budget resolution for the next 2 years. There will be no increase in the number of people affected by the AMT for the next 2 years under the budget resolution, and that is paid for. Unfortunately, this amendment is not paid for. It would plunge us back into deficit. I urge my colleagues to vote no.
Voted NO on raising estate tax exemption to $5 million.
An amendment to raise the death tax exemption to $5 million; reducing
the maximum death tax rate to 35%; and to promote economic growth by
extending the lower tax rates on dividends and capital gains.Proponents recommend voting YES because:It is disappointing to many family businesses and farm owners to set the death tax rate at what I believe is a confiscatory 45% and set the exemption at only $3.5 million, which most of us believe is too low. This leaves more than 22,000 families subject to the estate tax each year.
Opponents recommend voting NO because:
You can extend all the tax breaks that have been described in this amendment if you pay for them. The problem with the amendment is that over $70 billion is not paid for. It goes on the deficit, which will drive the budget right out of balance. We will be going right back into the deficit ditch. Let us resist this amendment. People could support it if it was paid for, but it is not. However well intended the amendment is, it spends $72.5 billion with no offset. This amendment blows the budget. This amendment takes us from a balance in 2012 right back into deficit. My colleagues can extend those tax cuts if they pay for them, if they offset them. This amendment does not pay for them; it does not offset them; it takes us back into deficit. It ought to be defeated.
Voted NO on supporting permanence of estate tax cuts.
Increases the estate tax exclusion to $5,000,000, effective 2015, and
repeals the sunset provision for the estate and generation-skipping
taxes. Lowers the estate tax rate to equal the current long-term capital
gains tax rate (i.e., 15% through 2010) for taxable estates up to $25
million. Repeals after 2009 the estate tax deduction paid to states. Proponents recommend voting YES because:The permanent solution to the death tax challenge that we have today is a compromise. It is a compromise that prevents the death rate from escalating to 55% and the exclusion dropping to $1 million in 2011. It also includes a minimum wage increase, 40% over the next 3 years. Voting YES is a vote for that permanent death tax relief. Voting YES is for that extension of tax relief. Voting YES is for that 40% minimum wage increase. This gives us the opportunity to address an issue that will affect the typical American family, farmers, & small business owners.
Opponents recommend voting NO because:
Family businesses and family farms should not be broken up to pay taxes. With the booming economy of the 1990s, many more Americans joined the ranks of those who could face estate taxes. Raising the exemption level and lowering the rate in past legislation made sense. Under current law, in my State of Delaware, fewer than 50 families will face any estate tax in 2009. I oppose this legislation's complete repeal of the estate tax because it will cost us $750 billion. Given the world we live in today, with clear domestic needs unmet, full repeal is a luxury that we cannot afford.
To add insult to this injury, the first pay raise for minimum wage workers in 10 years is now hostage to this estate tax cut. We are told that to get those folks on minimum wage a raise, we have to go into debt, so that the sons and daughters of the 7,000 most fortunate families among us will be spared the estate tax. We must say no to this transparent gimmick.
Voted NO on permanently repealing the `death tax`.
A cloture motion ends debate and forces a vote on the issue. In this
case, voting YES implies support for permanently repealing the death
tax. Voting against cloture would allow further amendments. A cloture
motion requires a 3/5th majority to pass. This cloture motion failed,
and there was therefore no vote on repealing the death tax. - Proponents of the motion say:
- We already pay enough taxes over our lifetimes We are taxed from that first cup of coffee in the morning to the time we flip off the lights at bedtime. If you are an enterprising entrepreneur who has worked hard to grow a family business or to keep and maintain that family farm, your spouse and children can expect to hear the knock of the tax man right after the Grim Reaper.
- In the past, when Congress enacted a death tax, it was at an extraordinary time of war, and the purpose was to raise temporary funds. But after the war was over the death tax was repealed. But that changed in the last century. The death tax was imposed and has never been lifted.
- The death tax tells people it is better to consume today than to invest for the future. That doesn't make sense.
- Opponents of the motion say:
- Small businesses and farms rarely--if ever--are forced to sell off assets or close up shop to pay the tax. Under the current exemption, roughly 99% of estates owe nothing in estate taxes. By 2011, with a $3.5 million exemption, only two of every 100,000 people who die that year would be subject to the estate tax.
- Today's vote is on a motion to proceed to a bill to repeal the estate tax. Not to proceed to a compromise or any other deal--but to full repeal. I oppose full repeal of the estate tax. Our Nation can no longer afford this tax break for the very well off. Permanently repealing the estate tax would add about $1 trillion to our national debt from 2011 to 2021.
Voted YES on $47B for military by repealing capital gains tax cut.
To strengthen America's military, to repeal the extension of tax rates
for capital gains and dividends, to reduce the deficit, and for other
purposes. Specifically, a YES vote would appropriate $47 billion to the
military and would pay for it by repealing the extension of tax cuts for
capital gains and dividends to 2010 back to 2008. The funds wuold be
used as follows:- $25.4 billion for procurement
- $17 billion for Army operation and maintenance
- $4.5 billion for Marine Corps operation and maintenance
Voted NO on retaining reduced taxes on capital gains & dividends.
Vote to reduce federal spending by $56.1 billion over five years by
retaining a reduced tax rate on capital gains and dividends, as well as.
- Decreasing the number of people that will be required to pay the Alternative Minimum Tax (AMT)
- Allowing for deductions of state and local general sales taxes through 2007 instead of 2006
- Lengthening tax credits for research expenses
- Increasing the age limit for eligibility for food stamp recipients from 25 to 35 years
- Continuing reduced tax rates of 15% and 5% on capital gains and dividends through 2010
- Extending through 2007 the expense allowances for environmental remediation costs (the cost of cleanup of sites where petroleum products have been released or disposed)
Status: Bill passed Bill passed, 66-31
Voted NO on extending the tax cuts on capital gains and dividends.
This large piece of legislation (418 pages) includes numerous
provisions, generally related to extending the tax cuts initiated by
President Bush. This vote was on final passage of the bill. The specific
provisions include: - Extension Of Expiring Provisions: for business expenses, retirement savings contributions, higher education expenses, new markets tax credit, and deducting state and local sales taxes.
- Provisions Relating To Charitable Donations, and Reforming Charitable Organizations
- Improved Accountability of Donor Advised Funds
- Improvements in Efficiency and Safeguards in IRS Collection
- Opponents of the bill recommend voting NAY because:
- Health care for children (among many other things) should come before tax cuts for the wealthy.
- The 2-year cost of the extensions on capital gains tax cuts for the wealthiest Americans is $20 billion. So if we defer the tax break the administration is pushing for the wealthiest people in America, we would have enough money to provide basic health insurance for every uninsured child in America, and we would eliminate 20% of the uninsured Americans with that single act alone.
- Proponents of the bill recommend voting YEA because:
- The largest provision in the bill--about $30 billion of tax relief--amounts to half of the net tax package and is designed to keep 14 million people out of the Alternative Minimum Tax. The AMT is terrible and should be repealed.
- College tuition benefits for families who send their kids to college -- by definition, this benefit goes to middle-income families.
- The small savers' credit -- for low-income folks that save through an IRA or pension plan.
- Many small businesses use the small business expensing benefit to buy equipment on an efficient after-tax basis. It is good for small business. It is good for economic growth.
Rated 100% by the CTJ, indicating support of progressive taxation.
Obama scores 100% by the CTJ on taxationissues
OnTheIssues.org interprets the 2005-2006 CTJ scores as follows: - 0% - 20%: opposes progressive taxation (approx. 235 members)
- 21% - 79%: mixed record on progressive taxation (approx. 39 members)
- 80%-100%: favors progressive taxation (approx. 190 members)
- Fair taxes for middle and low-income families
- Requiring the wealthy to pay their fair share
- Closing corporate tax loopholes
- Adequately funding important government services
- Reducing the federal debt
- Taxation that minimizes distortion of economic markets
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