Obama's Plan To Un-Tax Seniors Draws Fire

Tax Policy Experts Give Democrat's Proposal To Nix Income Tax For Some Seniors Low Marks

(AP)  If you're a senior citizen and make less than $50,000 a year, Barack Obama has a deal for you: the rest of your life free of federal income tax.

Sounds appealing, right? Maybe to many seniors. But tax policy experts in Washington are giving it bad reviews. They see it as another subsidy for senior citizens, who already get federal help through Social Security and Medicare and often have economic advantages over other demographic groups.

Seniors typically have paid off their mortgages. Many have investments and usually don't pay taxes on their Social Security benefits. The kids are usually grown, so they're not saddled with day care or college costs.

"The odds are the retired folks - they're getting pensions, they're getting Social Security, they have investment assets, they own a house - so ... they're better off than somebody who is 30 or 40 years younger who's trying to buy a house (and) trying to start saving," said Clint Stretch, managing principal of tax policy for Deloitte Tax.

The Obama campaign says the idea would give tax cuts averaging $1,400 to 7 million seniors who are battling inflation with mostly fixed incomes. The campaign also says the plan would relieve millions of older people from having to file complicated tax returns.

"If you work hard and pay into the system, you've earned the right to a secure retirement," says a description of the plan on the Obama campaign's Web site. "But too many seniors aren't getting that security, even though they've held up their end of the bargain. Lower- and middle-income seniors are struggling as their expenses on health and energy skyrocket while their incomes do not keep pace."

Some of Obama's allies in Washington think he's onto a bad idea.

"Most low- and moderate-income seniors already owe no income tax. Among seniors with incomes below $50,000 who do owe income tax, a significant number have modest incomes because they are retired but possess substantial assets," said Robert Greenstein, who heads the Center on Budget and Policy Priorities, a liberal think tank. "Given all the problems and needs the nation faces, targeting relief to this group isn't a priority."

The Tax Policy Center, a think tank run jointly by the Brookings Institution and the Urban Institute, gave the idea bad grades in a recent study of the two presidential candidates' tax plans.

Seniors already get preferential treatment in the tax code. They get to claim an additional standard deduction and only a portion of their Social Security benefits are taxed. Many don't pay payroll taxes because their income is from investments rather than wages.

"The proposal would exempt comparatively well off, though not affluent, senior citizens from tax and give them a benefit not generally available to working Americans," said the Tax Policy Center paper. It "helps only those low-income seniors who currently pay income taxes. Those too poor to owe any tax - arguably those most in need - would get no benefit."

Even the powerful seniors' lobby AARP doesn't seem excited about Obama's idea. An AARP bulletin on the presidential candidates' tax plans barely mentions it, saying that Obama's proposal could partly offset additional taxes that Obama would impose on seniors through higher tax rates on dividends and capital gains.

Tax experts across the political spectrum also fault the Obama plan's abrupt $50,000-a-year threshold. As described by the campaign, seniors making, say, $48,000 would pay no income tax, while someone with income slightly more than $50,000 could pay several thousand dollars in income taxes. Seniors nearing the $50,000 threshold would have incentive to quit working.

Congress likely would add a phaseout, according to tax experts. "Everyone knows there would never be this $50,000 cliff," said Ben Harris, a senior research associate at Brookings.

The proposed new tax break for seniors is one of about a dozen tax changes proposed by Obama, including raising rates on people making more than $250,000 a year; extending most of the rest of President Bush's tax cuts; subsidizing Social Security and payroll taxes for low-income workers; and boosting income and child care tax credits for low-income workers.

[puritan9]

It makes sense for seniors over 65 not to pay income tax if they make $50,000 or less. Most corporations do not pay federal income tax either and no one seems to be worried about that. For the majority of the people who have little money to keep paying taxes while the rich, super-rich and ultra-rich get away without paying a dime in taxes is not the American way. The only reason government wants people it seems is to send them to wars and get their taxes. It may sound convoluted, but it seems that the corporate owned government today is anti-American. It sees people as a resource to be used and abused for the benefit of the rich and powerful. It is time for ordinary citizens to take the country back from the private interest groups and put it to use for public good. After a lifetime of working and paying taxes, it makes sense to have relief especially if you are barely making ends meet. If you have some assets and are living of their income, that is not illegal or immoral, one should not be penalized for making money in retirement especially if it is only $50,000 or less. If a retiree is making some money that person is not a burden on the society, we have to help rather than screw people.

[siobama]

We chose a government not to lie to us, not to take away our homes and jobs, not to kill us in war that is a lie, not hear our private conversations... We give power to our government to protect our rights and to give back the money we pay in taxes in benefits for the whole country and not for themselves.
Republicans only think in retaining power. They do not care about the people, nor their needs.
We need a president for the people and by the people.
We need a young, intelligent, mature, honest, Christian, moral, strategic and ethical presidential candidate.
We need Obama.

[dtownpolack]

obama is pandering to everybody. he has no intention of giving seniors that tax break. also hear the dems are trying to get more convicted felons the vote. and people wonder why some call obama the anti-christ? look where he''s going for his vote.

[johnbush2-2009]

Stop your pandering Mr Hussein. Are you really that desperate????

[johnbush2-2009]

I repeat. Stop your pandering Mr Hussein. Voters can see that you are a fraud. You are really making a big fool of yourself.

[johnbush2-2009]

Now that you know how strongly voters feels against this, please do another of your flip-flop. We have come to expect this from you.

[johnbush2-2009]

STOP YOUR PANDERING, MR HUSSEIN. ENOUGH IS ENOUGH.

[trrrorislamx]

HUSSEIN TO BUY YOUR VOTE,,,

[nextgenman]

STOP YOUR PANDERING, MR HUSSEIN. ENOUGH IS ENOUGH.

Posted by johnbush2 at 05:45 AM : Aug 12, 2008
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Do you have anything serious comments to add? Say, for example, why this tax relief is a bad idea? Or a good idea? Or what its impact would be? Or if its good, why? Or bad, why?

This continual republi-screeching is just tiring and serves no purpose to Our Nation.

[nextgenman]

HUSSEIN TO BUY YOUR VOTE,,,

Posted by trrrorislamx at 05:49 AM : Aug 12, 2008
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Does terrorislamx know you''ve copied his screen name and are now posting nonsense like a blog troll?

[jedi080808]

Do you have anything serious comments to add? Say, for example, why this tax relief is a bad idea? Or a good idea? Or what its impact would be? Or if its good, why? Or bad, why?

This continual republi-screeching is just tiring and serves no purpose to Our Nation.


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Posted by nextGenMan at 05:50 AM : Aug 12, 2008
+ report

As of right now I am still for Obama but my faith in him is shrinking. I used to think he was different then other poloticians but alas he is the same. He has no intention of giving this tax break to Seniors, he is only throwing it out there becasue he is behind in the plus 60 demographic. This is just bs pander talk

[raycombs]

Are you rich? I know I''m not. I still pay taxes. And I will continue to pay taxes when the new POTUS takes office. So for any of you to say that just because Obama wants to give senior citizens a break that only the rich will pay taxes...Please. Get a life. What''s so wrong with giving them a break? Haven''t they earned it? You wouldn''t be here if not for a senior citizen. Taxes are going to increase regardless of whether or not senior citizens pay taxes or not. All of you "antichrist" talkers need to get educated. I''d rather pay more taxes than get into another war (Iran/Russia/N.Korea). If McCain has his way, we''ll have troops in every country in Europe. Then, who''ll be here to protect the country? The senior citizens?

[imme534333]

This proposal, if it became law would save me a couple of thousand dollars a year. This is certainly good for me. That only leaves two questions. Is it good for the country and is it fair. If I get two yeses then I will support it.

[obama8years]

Obama is grasping at straws, trying to make a Hit with the American People. This proves he will say anything and do anything. How About Drilling for Oil Obama, wouldnt that be a start.

[raycombs]

Is it good for the country? Yes. Maybe you''re a senior. 9.8 billion dollars. That''s $1400 from 7 million seniors. Think of what that number can do for the economy.

Is it fair? That''s a rhetorical question. Is it fair that millions of seniors can barely pay for their medical care even with the help of Medicare? Is it fair that thousands of seniors lose their lifetime of investments in a matter of months because they can''t pay hospital bills? It''s not a matter of being fair. It''s a matter of doing what''s right. I am 34 years old. This will not help me for another 30+ years, but I think it''s something we should do. Most seniors who I know don''t have jobs and are unable to work due to illness and health concerns. They are on a fixed income. So, how do you pay for rising healthcare when your income stays the same? You sell everything that you''ve worked 40 years to get. Then you still pay taxes, and you still pay for your healthcare. It''s ridiculous.

[raycombs]

To obama8years, drilling for oil is not the solution. We need alternative methods of energy. Eventually, the oil is going to run out. Then what?

[rafterman1]

===How About Drilling for Oil Obama, wouldnt that be a start.===
Posted by obama8years

How about telling the oil companies to drill in the 70 million acres of land they already have leased. How about that?

[carlylaine]

Use your heads...if you can. If the seniors (I am one of them) gets a free tax write off...then you younger whippersnappers will be saddled with the deficit.

This is not right; it''s not fair...and it''s a grabbing-at-straws ruse. Can''t any of you Osama supporters see that? He can talk but it won''t happen. Do you really think the government would give up money to help make people comfortable..

H*E*L*L* NO...the government''s job is to intrude and make us miserable. That''s what they do best.

Fuque the government and Obama''s cute tricks.

[real1413]

Bu$h "bought" votes with the $300/$600 tax rebate scam in ''01
Your ignorant posts are giving the impression that all republicans are stupid,brainwashed,and paranoid.....


HUSSEIN TO BUY YOUR VOTE,,,

Posted by trrrorislamx at 05:49 AM : Aug 12, 2008
+ report abuse

[skyk-2009]

H*E*L*L* NO...the government''''s job is to intrude and make us miserable. That''''s what they do best.

Fuque the government and Obama''''s cute tricks.

Posted by CarlyLaine at 06:42 AM : Aug 12, 2008

I have never seen people so uneducated in my life. We are talking about seniors who make less than 50,000 per year here. They are just managing to get by and are having to pay more and more from their Social Security Checks to Medicare because of a failed Health Care System. Yes this is needed and would benefit so many who have given so much to our nation already. Dumping on the old is something the Radical Right has started to do in their drive to turn Social Security over to the Wall Street Crowd. It has to stop.

[skyk-2009]

Obama is grasping at straws, trying to make a Hit with the American People. This proves he will say anything and do anything. How About Drilling for Oil Obama, wouldnt that be a start.

Posted by obama8years at 06:18 AM : Aug 12, 2008

No that would be the other guy in this thing... you know the guy who''s been on BOTH sides of the Drilling question and back again! The guy who would and then wouldn''t increase taxes to pay for Social Security. LOL No this sounds like a plan to help Seniors and you will just have to deal with that... after all aren''t you Neocon''s the ones who ALWAYS want to Cut Taxes?? LOL

[armydog2]

This makes sense, seniors are having a difficult enough time paying for medical care and heating bills and putting food on their tables. No free ride here, these are our citizens who have busted their butts all their lives and it is our responsibility to care for them. get rid of the tax breaks the big oil companies have and that should cover this nicely.

offshore drilling will not solve our energy crisis, it will only put more money into the oil companies pockets. you want to lower oil prices get rid of the ENRON LOOPHOLE. brought to you by mccain and his economic advisor.

[jedi080808]

No that would be the other guy in this thing... you know the guy who''''s been on BOTH sides of the Drilling question and back again! The guy who would and then wouldn''''t increase taxes to pay for Social Security. LOL No this sounds like a plan to help Seniors and you will just have to deal with that... after all aren''''t you Neocon''''s the ones who ALWAYS want to Cut Taxes?? LOL


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Posted by skyk at 06:51 AM : Aug 12, 2008

McCain switched on the drilling because of gas prices and safety improvments.

In my view their has really only been one major flip and that was Obama on the spying program. You can''t deffend that flip and flop

[usais11]

Obama is a dope- and those who don''t see how stupid are just as stupid.

[peterp111]

Obama has no record of his own, except for a pathetic 143 days of US senate experience. With no national history of his own, his only option is to keep slamming the other guy.

This is a Commander-In-Chief election in a world which is growing more dangerous. Obama is unfit and unqualified.

[gangesdak]

Tax policy experts, your simplified tax system is testimony to your expertise! Your latest message- stick it to grandpa. Seniors have earned their break. Let Obama have his way.

[dinkydog1]

Thats right, allow the ultra rich to accumulate millions tax free by abolishing estate taxes, lower capitol gains to 15% so rich will pay less tax than those who work for thier money and then gripe because middle class retirees get a break. Sometimes I believe the American people are so stupid they deserve McCain.

[gangesdak]

Mcviagra has no message on economy. On his foreign affairs expertise, I will admit, he knows all the rest stops in Bhagdad.

[trrrorislamx]

EXPERIENCE,,, WE DON''T NEED NO STINKING EXPERIENCE,,,

"I think that I have a lifetime of experience that I will bring to the White House. Sen. John McCain has a lifetime of experience that he''d bring to the White House. And Sen. Obama has a speech he gave in 2002." Hillary Clinton
http://latimesblogs.latimes.com/washington/2008/03/hillary-clinton.html

[cbsblogger]

The people that really need to pay their fair share of taxes to help get the USA back on track, are the ultra rich that have accumulated far more wealth at tax rates less than Wal-Mart employees. How much money does a person need to live very well $10 million or $100 million? How about billions, that''s far more than anyone needs and is not healthy for the country for individuals to have that much wealth and power. I agree the estate tax is the fairest tax of all.

[nextgenman]

there is nobody named mcviagra running for president

Posted by jamesm12341 at 07:41 AM : Aug 12, 2008
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His name is McLiverspot. Face it, nobody will vote for a turkeyneck with onset Alzheimer''s, anger management issues and recurring cancer.

[broncfan1661]

This is the first thing Obama came up with that I have to agree with. But I would rather see Medicare and Social Security preserved for our future generations of seniors.

[broncfan1661]

His name is McLiverspot. Face it, nobody will vote for a turkeyneck with onset Alzheimer''''s, anger management issues and recurring cancer.
Posted by nextGenMan at 07:43 AM : Aug 12, 2008
__________________________________
I am not a McCain supporter, but this kind of statement by Obama supporters is exactly why he is not doing as well as he should. You are just showing your arrogance and ignorance.

[jmurrieta1]

"Seniors nearing the $50,000 threshold would have incentive to quit working. "


Yeah, Grannie and Gramps, get down in that ditch and start digging!

The financial services sector and self-proclaimed "tax experts" think you''re not doing enough to make the Bushites even richer. Now that the tax shelters in the Caymans and in Switzerland have lost their luster, these poor little rich people are suffering!

And you old people just aren''t doing enough to keep the capitalist elite in the style they''ve become accustomed to under the Bush-cheney regime.

So start swinging that shovel! And quit whining! John McCain''s senior campaign advisor said so!

[nextgenman]

This is the first thing Obama came up with that I have to agree with. But I would rather see Medicare and Social Security preserved for our future generations of seniors.



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Posted by broncfan1661 at 07:43 AM : Aug 12, 2008
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I would agree. The problem has always been that the SS Fund has never been made untouchable by Congress. They play games with it - and Presidents as well - and it put us all at Risk.

They did the same thing with the FULLY solvent Federal Retirement system. Now its FERS and it''ll go down with the rest of the retirement schemes that are continually siphoned by the immoral sleaze that pursue politics.

[ofbyfor1]

Stop your pandering Mr Hussein. Are you really that desperate????

Posted by johnbush2 at 05:41 AM : Aug 12, 2008

Stop your ceaseless whining johnbush2. Are you really that desperate????

[nextgenman]

I am not a McCain supporter, but this kind of statement by Obama supporters is exactly why he is not doing as well as he should. You are just showing your arrogance and ignorance.

Posted by broncfan1661 at 07:47 AM : Aug 12, 2008
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And you show your sanctimony and self-righteousness. The real issue here is this: McCain REALLY does have serious anger management issues, McCain REALLY does have issues with recurring cancer, McCain REALLY does show the signs of onset Alzheimer''s. The man repeatedly cannot remember key issues.

Sorry you don''t like the delivery, but frankly, its irrelevant. When push comes to shove in November, Obama will be President. I''m not a giant fan of Obama, but I''m finished with tired old men and women running America with Yesterday''s Ideas.

[nextgenman]

and showing how juvenile he is

Posted by jamesm12341 at 07:51 AM : Aug 12, 2008
---------------

This coming from you?! HAAHAHAHAHAHA!!!

[imprisonkarl]

Gee, the fact that "most seniors typically don''t pay income tax" should come as surprise to my 91-y.o. mother -- who has to budget and plan ahead for months just to pay her quarterly IRS payments.

[toldyouso12]

am not a McCain supporter, but this kind of statement by Obama supporters is exactly why he is not doing as well as he should. You are just showing your arrogance and ignorance.

Posted by broncfan1661 at 07:47 AM : Aug 12, 2008

Nope--Obama is not doing as well as he should, because he is black and many of us are too prejudiced to vote for him, even if the alternative is a huge pile of white, steaming horse puke. Many will concentrate on the "white" part and ignore the putrid stench that it is puke. This is just a fact.

[mr2258]

Obama will say anything to get a vote.When something sounds to good to be true.IT IS...Obama has no way to pay for all of the things he offers.It''s not going to happen.Just a lie to get your vote.

[carjenbe]

Another example of the social democrats sharing the wealth to detriment of the lowere and middle class. Does he really believe the Rockefellers and Kennedys would not suddenly quality for the no tax on seniors. Pull your head out of your arse Mr. Senator, I want to hear what that sounds like.

[adillon70]

Since the government raided social security funds (and then had to raise the "tax" on our wages) there is little protection for the upcoming seniors. Social Security is NOT a tax, it is an entitlement, and the money in the fund came from OUR WAGES EARNED matched by OUR EMPLOYERS. I doubt that most seniors get enough social security to live on. Medicare comes OUT of the social security check so is not an "extra." I collect social security but have to work full time to make ends meet and they still take out social security and income tax from my paychecks. I have to pay for supplemental insurance because Medicare is sadly short in benefits. Our social security fund is further depleted by giving benefits to foreigners who never worked in this country, drug and alcohol addicts, etc. I like Obama''s plan. Seniors have worked hard all their lives and shouldn''t have to pay income tax on what little they can earn.

[dinkydog1]

I agree the estate tax is the fairest tax of all.


Posted by cbsblogger at 07:40 AM : Aug 12, 2008

...........................

I agree too, when you consider 93% of all taxed estate assetts examined by the congressional budget study consisted of funds and assets that were neaver taxed previously it looks like Americans would be outraged that the ultra rich get off tax free. Instead the Republicans lable the estate tax the "Death Tax". Thier constituancy being simple minded as they are actually believe there is a tax on death.

[ofbyfor1]

Senior citizens making less than $50,ooo a year should NOT be taxed. These are the people least likely to have assets, pensions or investments. Does anyone remember stories about seniors having to resort to eating cat food. Is THAT what you want for dear old Grandma and Grandpa? Not to mention that a portion of their Social Security is from money that they previously earned and were already taxed on.

If you want fairness in taxation, go after the hedge fund scvmbags who make millions a year and yet don''t have to declare it as ''income''! Disgusting!

[nextgenman]

Posted by broncfan1661 at 07:47 AM : Aug 12, 2008

Nope--Obama is not doing as well as he should, because he is black and many of us are too prejudiced to vote for him, even if the alternative is a huge pile of white, steaming horse puke. Many will concentrate on the "white" part and ignore the putrid stench that it is puke. This is just a fact.

Posted by toldyouso12 at 07:58 AM : Aug 12, 2008
------------

My guess is that broncfan1661 really IS a McCain supporter, and probably sitting at McLiverspot HQ. They KNOW that their biggest problem with McLifeAlert''s Image is the fact that he''s very old.

And America is tired of OLD Ideas.

So their only hope is to try and prevent people from bringing up the fact the McDepends is very Old, probably suffering the onset of dibilitation that comes with Old Age. He clearly has many serious personality and health issues.

[mr2258]

If elected Obama will begin a systematic destruction of America.You will be lucky to live in a tent.

[jmurrieta1]

Again, Obama shows he will introduce a fairer tax plan than the tax giveaway to billionaires we''ve had under the Republican regime.

George Bush and John McCain think giving huge tax cuts to people who make more than $250,000 a year is the way to go. The ultra rich now pay less tax than they have in some time. And McCain''s late campaign chairman, as a director of UBS, helped the Bush Billionaires hide even more of their assets from taxes.

Obama wants to provide middle-class tax relief, while making the Bush Billionaires pay their fair share, for once.

Obama, ''08!

[mr2258]

Obama''s failure has nothing to do with his color.It has to do with his Anti-American record.

[nextgenman]

Obama''''s failure has nothing to do with his color.It has to do with his Anti-American record.

Posted by mr2258 at 08:09 AM : Aug 12, 2008
-----------

Yawn.