WASHINGTON, Aug. 12, 2008
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
-
Democratic presidential candidate Sen. Barack Obama, D-Ill., speaks to the media in the driveway of the home where he is staying Kailua, Hawaii, Aug. 11, 2008. (AP Photo/Alex Brandon)
-
Photo Essay Barack Obama A look at the life and meteoric rise of the president-elect.
-
Interactive U.S. Taxes Find out more about where your dollars go, and take a quiz on filing with the IRS.
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."
Quote
Center on Budget and Policy Priorities
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.Given all the problems and needs the nation faces, targeting relief to this group isn't a priority.
Robert Greenstein,Center on Budget and Policy Priorities
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.
© MMVIII The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.
The secrets of tennis legend 
- 1
- 2
- 3
- 4
... - 31
- next
See all 604 Comments---------------------
----------------------------------------
-------------------
Posted by lgarcia85 at 09:55 AM : Aug 13, 2008
I don''t believe I addressed your major concern, sorry. The money you''re refering to is from individual employees. The major oil companies themselves have given much more money to the RNC, than the DNC, but the point still is, they will give money to both so they can continue to have access.
If Obama is so hell bent on reducing our dependence on oil and thinks large oil companies are so evil, why is he accepting any money from them to begin with?
--------------------------------------------------------------------------------
Posted by lgarcia85 at 09:55 AM : Aug 13, 2008
That''s a real simple one buddy; the oil companies are projecting an Obama presidency and want to have access when he is elected. Better get used to saying PRESIDENT Obama. That has a better ring to it than President McBush.
In Youngstown, Ohio, this week Obama said that McCain is "offering $4 billion more in tax breaks to the biggest oil companies in America -- including $1.2 billion to Exxon-Mobil...a company that, last quarter, made the same amount of money in 30 seconds that a typical Ohio worker makes in a year."
In Lansing, Michigan, Obama said Exxon-Mobil "is the company that, last quarter, made $1,500 every second. That%u2019s more than $300,000 in the time it takes you to fill up a tank with gas that%u2019s costing you more than $4-a-gallon. And Senator McCain not only wants them to keep every dime of that money, he wants to give them more. So make no mistake %u2013 the oil companies have placed their bet on Senator McCain."
But based on data downloaded electronically from the Federal Election Commission on July 29, 2008, reports CRP: "Through June, Exxon employees have given Obama $42,100 to McCain''s $35,166. Chevron favors Obama $35,157 to $28,500, and Obama edges out McCain with BP $16,046 vs. $11,500."
If Obama is so hell bent on reducing our dependence on oil and thinks large oil companies are so evil, why is he accepting any money from them to begin with?
Barack Obama is criticizing John McCain''s contributions from big oil while ignoring the fact that the employees of those same companies have donated more money to his campaign than McCain''s.
From ABC News'' Jake Tapper.
McCain has received three times more money from the oil industry in general -- $1.3 million for McCain compared to approximately $394,000 for Obama. But that said, Obama has received more campaign cash than McCain has from the employees of some of the biggest oil companies -- Exxon, Chevron and BP.
Obama and Clinton both promise to reverse Bush''s tax cuts for wealthier taxpayers, but the Democratic budget they''ll be voting for would allow income tax rates to go up on individuals making as little as $31,850 and couples earning $63,700 or more.
FUNNY DIDNT HE SAY HE WANTS TO LOWER TAXES FOR THE MIDDLE CLASS?? WELL THATS NOT WHAT HIS VOTING RECORD PROVES
Arizona GOP Sen. John McCain, Republican presidential nominee-in-waiting, voted for the full roster of Bush tax cuts. Rivals Hillary Clinton, D-N.Y., and Barack Obama, D-Ill., both voted against them.
Posted by drivelphobe at 11:26 PM : Aug 12, 2008
*************************
How does this IDIOT think that revenue will be replaced?
I suggest elimination of all income tax on capital gains for anyone over the age of 65. This would promote savings for investment at retirement, reduce demand for Social Security increases, allow the elderly retired individuals to have the hope for financial improvement through their own investment prowess, and keep people off the Medicaid roster. This would allow more money to pass at death, subject to the estate tax. Seems like a win win to me.
Considering the Social Security problems that many retierees will face in the future, and which Republicans are screaming about; considering the mortgage and credit crisis eating this country from the inside, Obama''s proposal makes all the sense in the world.
During the three upcoming debates Obama is going to have with McCooCoo he''s going to show Americans what he''s all about and let everyone see McCooCoo for the Bush clone that he is.
Thank you.
Posted by WellHell3
Actually, if Tinkerbelle floated the idea, it would still be worthy. A good idea is a good idea. Great things started with good ideas. A macintosh computer started with a great idea. the Automobile started with a great idea. Democracy itself started with a great idea. All these ideas were dismissed when presented, but eventually became real. Just because something is hard to do doesn''t make it not worth doing. And just because someone has an idea that doesn''t seem likely now doesn''t mean that it''s not likely later. That''s why a good idea is worth something all by itself. We NEED this kind of progressive thinking. WE NEED IDEAS. Why? Ideas lead us to the next level. Ideas help us grow, make things better. Ideas keep us alive!
--------------------------------------------------------------------------------
Posted by mrmazerati at 08:26 PM : Aug 12, 2008
+ report abuse
A senior with a 48K income and a paid off house, (which is rare) has probably been middle class their whole working life. As such they have paid a huge amount of taxes and social security over the last 30 years. They have always been the shafted middle American. Give them a break.
--------------------------------------------------------------------------------
Posted by zcOtter at 08:03 PM : Aug 12, 2008
You all are talking like you really think this is going to happen! ROFL
Vote for TINKERBELLE! You would have more chance of getting it!
Now I didn''''t say anything about hating my country. I love this land, but with everyday, it''''s getting more and more difficult doing so. And yes,,if you are not filled with thoughts of doom and gloom, you are not in the real world at all.
Try to catch up ,,will ya! We''''ll wait,,but not for long. We don''''t have that much time left!
--------------------------------------------------------------------------------
Posted by slim1h2o at 07:42 PM : Aug 12, 2008
Guess I must be living on Pluto! I''m actually enjoying my life! And intend to go on doing so!
Seems I don''t blame the government for every little thing that happens in life! Nor do I wait around for the government to provide my needs! HELL, I''d still be waiting around LIKE YOU ARE!
Knowing that these blog postings do get read by Sen. Obamas campaign people (Hi Michelle S.)and also having called Sen Obamas Senate office and campaign headquarters to offer my help and recieving no response can only lead me to two conclusions. Senator Obama isn''t audacious and is not about Change at all. In my opinion Senator Obama is trying to sweet talk his way into The White House just based on his charm and political promises and we all know how much they are worth. Every day he is seeming more and more like Paris Hilton or Britney Spears. Senator Obama is leaving the homeless helpless, the poverty stricken hopeless, the Blacks behind and the Seniors sorry. Michelle, you may delete this posting from this site but it will be copied onto mine and others around the web, The Benefactor Project.com
Disappointedly Yours,
Tom Canavan
Try to catch up ,,will ya! We''''''''ll wait,,but not for long. We don''''''''t have that much time left!
Just for clarification as to who I was talking to. In case somebody got confused.
Slim a lot of us feel it is no use they will do what they want, and no one seems to care, but we can do something for sure, go and vote, and vote the bums out
- 1
- 2
- 3
- 4
... - 31
- next
See all 604 Comments