Reality Check: Helping Small Businesses

CBS Evening News: Neither Obama Nor McCain Has A Truly Persuasive Plan For Immediate Job Relief

(CBS)  This story was written by Wyatt Andrews.

As both candidates try to win over the working middle class, they're both claiming to have the plan that creates new jobs -- and does so right away.

Senator Barack Obama often says that “we need an immediate rescue plan for the middle class.” Senator John McCain has laid claim to be the candidate who most helps small business.

McCain's appeal to Joe the Plumber rests on a claim he will cut taxes, including business taxes and in the process create new jobs.

“We will cut business taxes to help create jobs, and keep American businesses in America,” he said this week.

The fact is none of McCain's tax plans help Joe the Plumber right away and his main tax pledge changes nothing at all.

Here's why:

McCain's claim that his tax cut is the "real thing" is based on his pledge to keep all of the Bush tax cuts. Fine, but those are on the books and part of the law for the next two years anyway. Nothing changes here if McCain gets elected, and no extra money goes to Joe.

How about those "business taxes" McCain says he will cut. This is verbal sleight of hand.
McCain is indeed proposing a corporate tax cut, in fact a bold one: 35% down to 25% phased in over five years. But almost no small businesses file taxes as corporations.

In other words, experts tell CBS News, Joe the Plumber, small businessman, isn’t getting these business tax cuts either, because they are corporate tax cuts.

“There would be no direct benefit for small businesses because most small businesses don't pay corporate taxes,” according to tax policy expert Martin Sullivan.

As for Obama, he claims that he can create new jobs by giving employers a $3000 tax credit for every new worker they hire. “I've proposed a new American jobs tax credit for each new employee that companies hire here in the United States over the next two years,” he says.

That proposal was tested in the Carter Administration and was not a great success at creating new jobs. According to Sullivan, it won’t work this time either, because of the slowdown in growth.

“$3000 is a small marginal incentive in an employer’s hiring decision,” he said. “It's a benefit on the margin, it doesn't hurt but it is unlikely to create a major stimulus for employment,” said Sullivan.

In fairness to both candidates, they both propose varying cuts and/or elimination of capital gains taxes for business, and in some cases this would help small business owners. Most neutral economists will tell you capital gains tax cuts, viewed over the long term, do tend to stimulate jobs, and while they are a huge hit to the deficit, capital gains cuts are arguably good investments. Give both candidates credit here.

Similarly, both candidates promise to ramp up the energy economy and create millions of new jobs in the sectors of renewable and nuclear power. But again, these are long term investments. Neither candidate, based on their public claims, has a truly persuasive plan for the immediate job relief needed in the economy.

[jschmidt27]

http://www.usnews.com/blogs/capital-commerce/2008/10/23/would-obama-dems-kill-401k-plans.html
With Obama as Pres and Democrats running Congress this the type of policies you''ll get to take choice away from investors and create a huge slushfund for the Dems to say they balanced the budget.
House Democrats Contemplate Abolishing 401(k) Tax Breaks
Workforce Management ^ | October 16, 2008 | Sara Hansard

House Democrats recently invited Teresa Ghilarducci, a professor at the New School of Social Research, to testify before a subcommittee on her idea to eliminate the preferential tax treatment of the popular retirement plans. In place of 401(k) plans, she would have workers transfer their dough into government-created %u201Cguaranteed retirement accounts%u201D for every worker. The government would deposit $600 (inflation indexed) every year into the GRAs. Each worker would also have to save 5 percent of pay into the accounts, to which the government would pay a measly 3 percent return. Rep. Jim McDermott, a Democrat from Washington and chairman of the House Ways and Means Committee%u2019s Subcommittee on Income Security and Family Support, said that since %u201Cthe savings rate isn%u2019t going up for the investment of $80 billion [in 401(k) tax breaks], we have to start to think about whether or not we want to continue to invest that $80 billion for a policy that%u2019s not generating what we now say it should.%u201D

[jschmidt27]

Obama said in April that only those making less than 75k would get tax relief. http://www.businessweek.com/magazine/content/08_15/b4079017876246_page_2.htm The WSJ article says below that taxing the over 250k crowd will not pay for Obama''s programs.http://online.wsj.com/article/SB122463231048556587-email.htmlIn 2006, the latest year for which we have Census data, 220 million Americans were eligible to vote and 89 million -- 40% -- paid no income taxes. According to the Tax Policy Center (a joint venture of the Brookings Institution and the Urban Institute), this will jump to 49% when Mr. Obama''s cash credits remove 18 million more voters from the tax rolls. What''s more, there are an additional 24 million taxpayers (11% of the electorate) who will pay a minimal amount of income taxes -- less than 5% of their income and less than $1,000 annually.In all, three out of every five voters will pay little or nothing in income taxes under Mr. Obama''s plans and gain when taxes rise on the 40% that already pays 95% of income tax revenues.The plunder that the Democrats plan to extract from the "very rich" -- the 5% that earn more than $250,000 and who already pay 60% of the federal income tax bill -- will never stretch to cover the expansive programs Mr. Obama promises.What next?

[jschmidt27]

Obama tax plans-continued-A core group of Obama enthusiasts -- those educated professionals who applaud the "fairness" of their candidate''s tax plans -- will soon see their $100,000-$150,000 incomes targeted. As entitlements expand and a self-interested majority votes, the higher tax brackets will kick in at lower levels down the ladder, all the way to households with a $75,000 income.

[tjzchouse]

I have been self-employed since 1992. I left the "corporate world" so that I could both provide an income for our family and raise our children without putting them in daycare.

My typical work day lasts 12 hours. I have not had a paid vacation or a paid sick day for 16 years. In fact, I''ve had no down time longer than a 3-day weekend whatsoever for the past 5 years. My husband is able to provide family health insurance through his job, so at least that''s not an issue.

What do I get in return for working so hard? Self-employment tax. I can bring my taxable income down to zero--it doesn''t matter how many deductions I can qualify for because self-employment tax comes directly off Schedule C. I didn''t mind nearly so much when I was able to make a good income, but now companies who outsource their technology work force overseas can undercut my prices to a degree that I can''t hope to compete with while living in the Washington DC metro area with its high cost of living. I have been able to maintain long-term clients who place a high value on quality, but attracting new clients is not something that I count on at this point.

We have two sons, a freshman and a senior in high school. My goal is to survive for 8 more years so that we can get them both through to an undergraduate degree. After that . . .

[todgul]

Do you prefer redistribution of wealth to CEOs, oil companies or to the middle class ?
http://therealmccain.com/

[atoh1]

Instead of delving in what could happen - i.e. he will raise taxes after he gets elected (referring to Obama of course) we need to consider that the same ''possibility'' is just as true of Mccain. My point is, there is no point in delving in conjecture and fear...both candidates have provided us with their tax plans...and it is clear that John mccain is doing everything he can to push a tax plan we cannot afford to pay for. Let''s take the joe story into consideration....

If Joe the Plumber thinks he can''t afford to buy the business under Obama''s tax plan then he really needs to consult a good accountant. Obama''s plan lowers taxes on the first $250,000 Joe makes. On the money over $250,000, Joe would pay 39% under Obama, instead of the 36% he now pays. That''s 3% more taxes, not exactly break-the-bank if you have already made $250,000 at a low rate. In fact, if Joe makes $280,000 then his taxes will only go up $900 a year (that''s 3% of $30,000, the amount over $250,000). Plus, Obama will give him a $1,000 tax credit for every job he creates, and tax credits for every employee that he provides health insurance for. Under Obama''s plan, Joe''s business will actually pay LESS TAX than it does now, as long as he has even just one employee.

It is interesting to see McCain make an argument based on an empty case.

[thinkabouti7]

neither candidate will be able to implement all that they promise. The realities of the situation will not allow them to.
Taxes under either candidate won''t be such that they''ll make you or break you, so you have to think about their judgment.
McCain proponents say he has the most experience, but noticing how he has ran his campaign and the choices he has made, including his choice of a running mate (who has no discernible judgment, is an outright liar, and has been found to violate the ethics of her gubernatorial position), leaves me to very much doubt his judgment. You would think that after 26 years as a senator, and running a previous campaign for president, he would have made better choices. It seems to me that his life experience has not taught him anything. He still flies by the seat of his pants without thinking through his plans. Hell, he doesn''t even seem to have a plan. One week its drama (I''m suspending my campaign to rescue the economy and I am not showing up to the debate either!), the next is personal attack lies (Obama pals around with terrorists).
Obama has no experience. Yet he has shown steady judgment.He has throughout his life, and this campaign, made the right choices and has come out on top. His handling of this campaign may even give him previous Republican strongholds. Hell, even the Republicans are vouching for him!
Thank you, but I will stick with the steady thoughtful judgment Obama has shown.

[thinkabouti7]

neither candidate will be able to implement all that they promise. The realities of the situation will not allow them to.
Taxes under either candidate won''t be such that they''ll make you or break you, so you have to think about their judgment.
McCain proponents say he has the most experience, but noticing how he has ran his campaign and the choices he has made, including his choice of a running mate (who has no discernible judgment, is an outright liar, and has been found to violate the ethics of her gubernatorial position), leaves me to very much doubt his judgment. You would think that after 26 years as a senator, and running a previous campaign for president, he would have made better choices. It seems to me that his life experience has not taught him anything. He still flies by the seat of his pants without thinking through his plans. Hell, he doesn''t even seem to have a plan. One week its drama (I''m suspending my campaign to rescue the economy and I am not showing up to the debate either!), the next is personal attack lies (Obama pals around with terrorists).
Obama has no experience. Yet he has shown steady judgment.He has throughout his life, and this campaign, made the right choices and has come out on top. His handling of this campaign may even give him previous Republican strongholds. Hell, even the Republicans are vouching for him!
Thank you, but I will stick with the steady thoughtful judgment Obama has shown.

[thinkabouti7]

neither candidate will be able to implement all that they promise. The realities of the situation will not allow them to.
Taxes under either candidate won''t be such that they''ll make you or break you, so you have to think about their judgment.
McCain proponents say he has the most experience, but noticing how he has ran his campaign and the choices he has made, including his choice of a running mate (who has no discernible judgment, is an outright liar, and has been found to violate the ethics of her gubernatorial position), leaves me to very much doubt his judgment. You would think that after 26 years as a senator, and running a previous campaign for president, he would have made better choices. It seems to me that his life experience has not taught him anything. He still flies by the seat of his pants without thinking through his plans. Hell, he doesn''t even seem to have a plan. One week its drama (I''m suspending my campaign to rescue the economy and I am not showing up to the debate either!), the next is personal attack lies (Obama pals around with terrorists).
Obama has no experience. Yet he has shown steady judgment.He has throughout his life, and this campaign, made the right choices and has come out on top. His handling of this campaign may even give him previous Republican strongholds. Hell, even the Republicans are vouching for him!
Thank you, but I will stick with the steady thoughtful judgment Obama has shown.

[thinkabouti7]

neither candidate will be able to implement all that they promise. The realities of the situation will not allow them to.
Taxes under either candidate won''t be such that they''ll make you or break you, so you have to think about their judgment.
McCain proponents say he has the most experience, but noticing how he has ran his campaign and the choices he has made, including his choice of a running mate (who has no discernible judgment, is an outright liar, and has been found to violate the ethics of her gubernatorial position), leaves me to very much doubt his judgment. You would think that after 26 years as a senator, and running a previous campaign for president, he would have made better choices. It seems to me that his life experience has not taught him anything. He still flies by the seat of his pants without thinking through his plans. Hell, he doesn''t even seem to have a plan. One week its drama (I''m suspending my campaign to rescue the economy and I am not showing up to the debate either!), the next is personal attack lies (Obama pals around with terrorists).
Obama has no experience. Yet he has shown steady judgment.He has throughout his life, and this campaign, made the right choices and has come out on top. His handling of this campaign may even give him previous Republican strongholds. Hell, even the Republicans are vouching for him!
Thank you, but I will stick with the steady thoughtful judgment Obama has shown.

[es48]

Reality check?

This is what you call a reality check.

http://ewebsmith.com/Pictures/lunch

[robert2237]

FromTexwLove- Oh well you know you will have cheaper labor there. I am trying to decide if I lay off about 10 or move to Mexico or Canada. Anyway those who think that the obama''s taxing is going to help them they should think again. If I am taxed in my business more guess who gets to pay it. Thats right the customer and if he can''t pay the extra cost then I lay people off and if needed close and go to the beach and live the rest of my life having fun. I will not work 12 to 14 hrs a day to make less than I do now because the obama wants to give the non working money so they will vote for him. No thanks I can have more fun on the beach.

[robert2237]

atoh1- It is plain you have no ideal what you are talking about. Read the plan, again more than likely you have not read anything about it, you just used the obama calulator and came up with some bs numbers. Next if you think a $1,000 or $3,000 (have read both) tax credit is going to help me out when a new employee cost around $65,000 to $100,000 the first year then you really need to make sure you have someone else keeping track of your check book. Most people as it seems you to do not realize that a new employee is just a expense the first few months, then if you are lucky they will start pulling their weight. Next you got vac. sick, holidays, SS Taxes (business have to pay 1/2 of it and the employee pays 1/2 so if you have $100 taken out of your check the employee has to pay $100 also) same is true with medicare. Then you have the workers comp. insurance not cheap at all. Lets see then training and on and on. and the obama is trying to fool everyone with a small tax credit if you create a job give me a break. You will find out that with the obama plan jobs will be leaving the US fast. Maybe some major companies will move to another country, I would bet on it.

[ttmo2]

You left out the most important part of the picture. Obama''s plan gives tax cuts to all those making 250k, which includes 98% of all small businesses. McCain is attempting to hoodwink small business owners with "verbal sleight of hand", as the article clearly states. Don''t be fooled by this charlatan. With McCain you will get the same economic policy as with Bush, tax breaks for the wealthy and crumbs for everyone else. I''m still waiting for those tax cuts to the wealthy to trickle down. How ''bout you?

[ttmo2]

oops; make that less than 250k on my last post

[misha128-2009]

Posted by FromTexwLove

Sorry, the idea that 25 crack dealers will lose their jobs is not enough to change my vote. See Ya!

Posted by iam4honesty at 07:46 AM

Just a couple days ago Tex was a pre-law student. Yesterday he says he drives from Illinois to Indiana to see his child. Now he runs a business -- Busy man there Tex from Illinois.

[gjennings55]

How is it that Obama can run illegally. He is deffently not a born U.S. citizen.That is the main thing running for President. I believe this race has been illegal from the begining ,vote frauds and all.I have read the federal laws and you deffently have to be born a U.S. citizen to run. Obama was born in Kenya and adopted Indoniesia.Does this country change the contitution and federal laws for this certain canidate. This is illegal as hell.If this is the case a terroist could come over here in run.Thats an example. I think Obama should be suspened and HRC should be legally the nominee.This is all wrong.CNN is covering alot of illegal corruptions that Obama is in.

[leo261]

McCain was born in Panama.

[fbla1805]

Make no mistake, the policies of deregulation, begun under Reagan, continued by Bush and Cheney, and supported for 26 years by John McCain, have set America on a long slide down into second rate status. Like bombshells falling on a battlefield, the disastrous consequences of these bankrupt Republican policies explode around us daily.

And make no mistake, the policies of John McCain and Sarah Palin, were they to be elected to office, would lock us into this downward spiral - no American who loves our country could possibly want to see that happen!

Voters considering casting a ballot for McCain/Palin should first think about how well they''ll do in a new Great Depression, because that is what McCain Palin will bring us.

[fbla1805]

Sadly, %u201CJoe the Plumber%u201D turns out to be just another McCain gimmick. Yet he%u2019s making %u201CJoe the Plumber%u201D the centerpiece of his campaign.

Too bad for McCain that he didn%u2019t vet %u201CJoe the Plumber%u201D any better than he did Sarah Palin!

Turns out Samuel J. Wurzelbacher (alias McCain%u2019s %u201CJoe the Plumber%u201D) doesn%u2019t have a plumber%u2019s license. Nor did his boss know he was selling his own business to Sam (%u201CJoe%u201D)!

That business is apparently worth less than $100,000, nowhere close to the $250,000.00 %u201CJoe%u201D claimed it was worth in his conversation with Obama (in other words, he barefaced lied).

Truth is, Samuel (%u201CJoe%u201D) makes about $40,000 a year, has a state tax lien from Ohio for nearly $1,200.00, a second lien for $1,261.00.

Not being able to keep up with his own bills, he''s buying a business, as he claimed to Obama on camera, right?

Turns out that good ol%u2019 Samuel (%u201DJoe%u201D) prominent on the local right-wing radio station, and a financial donor to McCain. He%u2019s also famous for posting youtube rants attacking Social Security.

In other words, Joe is just a mole, a shill. So maybe we should just stop calling him Samuel %u201CJoe the Plumber%u201D and refer to him as %u201CJoe the McCain Mole%u201D.

Weirdly, McCain still believes he can sneak this fraud by the American people, even in this day and age with the internet and 24/7 news cycles.

Who would have thought?

[bigjoe-24]

@Posted by OneAmerican7

You have a video? if not go to hell!

[bigjoe-24]

@Posted by FromTexwLove

I guess you''re doing extremely well now... like making a lot of $$$$

[bigjoe-24]

Just a couple days ago Tex was a pre-law student. Yesterday he says he drives from Illinois to Indiana to see his child. Now he runs a business -- Busy man there Tex from Illinois.

Posted by misha128 at 08:36 A
...................

Talk about a backward "B" situation:)

[fbla1805]

So is the fake Plumber, and the fake McCain gal was trying to heat up racism, and who''s now charged with the crime of reporting a crime she invented, doing ploys, doing stunts, or doing slime?

No matter, in just 10 days, the politics of ploys, stunts, slime, deceitful mailings, sleazy robocalls, & culture war will be on the ballot!

On Nov. 4th, the politics of Bush/Cheney, McCain/Palin, Karl Rove/Steve Schmidt, and Rupert Murdoch%u2019s Fox News Channel, will be defeated because Americans in the millions are fed up with this brand of McCain/Palin politics.

Americans, remember! We need a huge turnout and a landslide victory, because as we can see already today, the Republicans are again trying to steal this election at the polling stations, just like in 2000 & 2004!

People, vote with strength and courage, elect Obama/Biden in overwhelming numbers, and return honesty, decency, and integrity to our American politics!

Starting Nov. 5th, we%u2019ll begin the hard work of repairing the immense damage these Republican Party thieves and scoundrels have done to our economy, our country, & our people.

May God bless us all.

[jhy190]

This is to those who accuse Democrats of %u201Csocialism%u201D.

What%u2019s bigger government spending today than this war with Iraq that never attacked us? Isn%u2019t it what the %u201Ccommunist%u201D Soviet kept doing towards its economic demise?

[pollroller1]

In my humble opinion, both candidates are full of--- well you know. Both of them are telling us what they think we want to hear. I however do believe that Barack Obama is the lesser of the two evils. That is why I voted for him. I guess time will tell if I voted for the right man.

[nanv102]

It does not matter who is in the office. If they do not fix the bankrupt education system, the USA economy will not be the same. After politicized the education system for a long time, teachers can not teach in the classroom and gave grades to satisfy parents. Parents want their children to get good grades with less work. Students play more than spending time to study hard sciences. How can they compete in the global work force? If they can not compete, do you expect them have a good life over the rest of the world as in the past century. Common, wake up America!

What can Obama do? What can Mccain do? So they have to say what you want to hear. Nothing can be changed about economy.

[nanv102]

Affirmation action is a good thing, but US has to have a system that encourages and maintain excellency too. Do not let "real" gifted students bored in the classroom. NSF should have more money for this important activity too. Does either Obama or Mccain think of this? I do not hear from them yet.
Do you think foreign scientists will stay in US for ever to save US? If not, please pay attention to children (our homegrown products). Please really love USA, both candidates. You do not have to win because your Democrats or Republicans. Honestly, serve for the survival of our country.

[nanv102]

For people who want to have jobs back in USA, please limit in buying imported merchandises. Think twice when you buy. Is it really necessary to buy this imported items? If you can live without it, do not buy. I think that we have more than enough to survive for few years with that limiting buying plan in mind.
I do not think Toyota is better than Buick, or GM cars. It depends on you feeling rather than the truth. I have two GM cars. One lasts for 250,000 miles and the other lasts 300,000 miles. I have one Toyota lasts about 120,000 miles,then its engine is in bad shape.
Save your jobs, buy more US products(maybe a little more expensive but last much longer)