Thursday, June 11, 2009

Taxation and Politician Promises

In this case, it's Obama's repeated statements during campaigning that people making less than $250k/yr would not have their taxes raised. Personally I think it is pretty obvious that he was talking only about their marginal income tax rate. A friend of mine, however, uses that as a benchmark against any tax increases that would apply across the board (like a higher gas tax or cap and trade pass down or change in deduction schemes).

He is not technically wrong in that any such tax would go against the stated promise of our new president. I, obviously, do not agree with that, and I know that if any of those other forms of taxation increase then Obama will be hit with it as breaking a promise. Two things:

One: taxes are not bad, but people do not like them so no matter how much better their lives may end up with higher taxes, it is political death to talk about raising them. Even with Obama only talking about raising taxes a small amount on a very small percentage of the population, he was hit hard and often about his raising taxes. The whole truth of those arguments don't seem to matter to many on the right, but the whole truth of Obama's promise sure as hell will.

Two: even absent splitting hairs on what it means to keep the promise it is a moot point when the world changes. I am fully aware that Bush Sr (the smart one) likely lost due to his proper decision to sign into law a tax increase (we had a war to pay for after all), but that doesn't change the fact that the promise was made prior to shit that happened. It is not possible to anticipate the future, and while I do think politicians need to be held accountable for their actions once elected (you know, when they run for reelection) it is a worse thing to be unwilling to bend to changing situations than it is to break a promise made while campaigning and while the situation was different.

3 comments:

Michael L. Heien said...

Jacob,

I would like to respond to your post (this is my first point), but I would like to see if you are willing to have a discussion in good faith.

You state:

In this case, it's Obama's repeated statements during campaigning that people making less than $250k/yr would not have their taxes raised. Personally I think it is pretty obvious that he was talking only about their marginal income tax rate.

Obama said (http://www.realclearpolitics.com/articles/2008/09/obamas_remarks_in_dover_new_ha.html):

“I can make a firm pledge, under my plan, no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes. My opponent can't make that pledge, and here's why: for the first time in American history, he wants to tax your health benefits ”

Is he only talking about the "marginal income tax rate?" I think it's clear his promise is a little more broad than that. I also think it's not "splitting hairs" to take words at face value. How else can we have an honest discussion?

What is interesteing is he even hit McCain on his plans for health care (taxing benefits). I direct you to this article.

http://www.nytimes.com/2009/06/14/us/politics/14address.html?_r=1&hp

More to come later, but I would like to start off by asking if he meant more than just income tax rates in the statement.

Jacob said...

Yes, income tax is too damned complicated to roll into the marginal rate, but I did, because I all the rest are variations on the theme.

I think of the marginal rate as including all deductions and non-taxed benefits. Basically someone's total income tax won't go up. In large part because of the complications, I think it is a dumb promise, but a necessary one to get elected.

My problem w/ McCain's plan wasn't the taxing of benefits, which I could maybe go along with, but the fact that he didn't have an answer to the real problem ($2500/yr does not buy health insurance).

But, to your question, everything he mentioned pertains to income taxes. He mentions several specifics but does not touch upon any taxes that are not part of income tax.

Michael L. Heien said...

I would just like to have an intellectually honest conversation.

It is a fact that "not your payroll tax, not your capital gains taxes, not any of your taxes." is a little more broad than just "income tax." Capital gains taxes are not income taxes, neither are payroll taxes (regressive by nature). "Any of your taxes also sounds pretty broad, an impartial observer would not think this is being limited to income taxes.

That may not matter, because my point is this: the more cynical amoung us knew that this pledge was a lie. There is no way that the pledges made during the campaign could be true; in my mind it's a question of when that promise gets broken. You can say "situations change, that's why he broke the promise, he is adapting to changes on the ground." Well, I think that's not intellectually honest. If you take your rationalization a step further, then anything anyone says is meaningless (ie you're giving him a pass). If you want higher taxes, just say so. But don't pass a bill, making me pay $800 a year more for energy, plus $3000 a year more (inderectly) for my supplies in a Global warming bill and not call it a "tax increase." If the goverenment is collecting more of my money by a bill which was passed, it's a tax increase.

I was ridiculed prior to the election for stating I did not believe Obama's promise; they told me he would lower my taxes. That extra $13 a week I am getting will not mean much if I have to pay more in another form (the net result is the same).