Fiscal Conservative Edition

"I never give them hell. I just tell the truth and they think it's hell."

--Harry Truman

So I had dinner the other night with some good friends, one of whom self-identifies as conservative (Yes Reagan, No Bush-shrub, No Hillary, Maybe Barack) and after listening to the usual ranting from California-based liberal types who love to go on about McCain, he asked a very good question. "But what exactly is it you think Obama is going to do?"

Well, honestly, I haven't read everything on Obama's plan for the future to know enough. Frankly, just getting though the recent NY Times article on Obamanomics took far too long for me to even get through. But I'm curious now. Am I putting my money where my mouth is?

I would so love it if we could get past the absurd and meaningless culture wars to the point where we are comparing the details of each candidate's platform in order to make our decisions. So, in honor of Mr. Fiscal Conservative (whom I suspect is actual far more Socially Liberal than he might even want to admit) I'd like to devote the next few editions to digging out some specific policy points that might help me intelligently answer Mr. FC's question. I'd like to compare the two candidates (both their records and proposals for the future) on what I consider key areas, including foreign policy, national security, economic policy, healthcare, energy policy, education, gun control and immigration.

Think of it as Presidential Debate preparation. Yeah, yeah, I know...well, you can always scroll down to the fun stuff at the bottom of the page....

This week's topic: It's the Economy, Stupid

As we begin, bear in mind that although I make a mean pizza, I'm no economist. Paul Krugman is, though, and here is his early assessment (around January '08) of Obama's proposals: "similar to those of the other Democratic candidates, but tilted to the right. For example, the Obama plan appears to contain none of the alternative energy initiatives that are in both the Edwards and Clinton proposals, and emphasizes across-the-board tax cuts over both aid to the hardest-hit families and help for state and local governments. I know that Mr. Obama's supporters hate to hear this, but he really is less progressive than his rivals on matters of domestic policy."

Yeah, but how does he compare to McCain? Krugman reminds us about "John McCain's admission that economics isn't his thing. 'The issue of economics is not something I've understood as well as I should,''he says. 'I've got Greenspan's book.' His self-deprecating humor is attractive, as always. But shouldn't we worry about a candidate who's so out of touch that he regards Mr. Bubble, the man who refused to regulate subprime lending and assured us that there was at most some 'froth' in the housing market, as a source of sage advice?"

Okay, for this edition, specifics about taxes:

The nation should have a tax system that looks like someone designed it on purpose.

--William Simon

What do they plan to do about taxes and tax reform?
Most of this comes from the non-partisan Tax Policy Center (in-depth analysis on their site)

• Obama:
  
• permanently extend certain provisions of the 2001 and 2003 tax cuts primarily affecting taxpayers with incomes under $250,000
• would cut taxes by $80 billion a year for workers, retirees, homeowners, savers, students, and new farmers by enacting new and expanded targeted tax breaks.
• Give credits to working families;
  
• eliminate income taxes for elderly workers making $50,000 or less.
  
• Keep estate tax.
  
• increase the maximum rate on capital gains and qualified dividends;
• Reduce corporate tax loopholes by enacting basis reporting for capital gains, taxing carried interest as ordinary income, and enacting sanctions on international tax havens that don't cooperate with enforcement efforts, but he would also need additional as-yet-unspecified policies to achieve his revenue target for base broadening
• McCain:
  
• would make the Bush tax cuts (2001 and 2003) permanent.
  
• Eliminate alternative minimum tax.
  
• Raise the personal exemption for taxpayers supporting dependents from $3,500 to $7,000 per dependent.
  
• Cut estate tax rate to 15 percent and exempt estates under $10 million.
  
• Cut the federal corporate tax rate to 25 percent from 35 percent and allow corporations to immediately deduct the costs of new equipments and technology.
  
• Establish a permanent tax credit for companies that is equal to 10 percent of wages spent on research and development.
  
• Require three-fifths vote in Congress to increase taxes.
  
• Propose an alternative tax system, while keeping the current one in place for those who want to use it, with "two tax rates and a generous standard deduction."
  
• Pay for cuts by eliminating earmarks, implementing "a one-year pause in discretionary spending increases, with the necessary exemption of military spending and veterans benefits," and overhauling programs like Social Security and Medicare.
• Reduce corporate tax loopholes, targeting eight breaks for oil companies but, other than that, is short on details for his pledge to eliminate "corporate welfare."

What are the effects of reduced tax revenue?

• Both candidates have at times stressed fiscal responsibility, their specific non-health tax proposals would reduce tax revenues by $3.6 trillion (McCain) and $2.7 trillion (Obama) over the next 10 years, or approximately 10 and 7 percent of the revenues scheduled for collection under current law, respectively. Furthermore, as in the case of President Bush's tax cuts, the true cost of McCain's policies may be masked by phase-ins and sunsets (scheduled expiration dates) that reduce the estimated revenue costs. If his policies were fully phased in and permanent, the ten-year cost would rise to $4.0 trillion, or about 11 percent of total revenues.

I mean what are the effects for us normal people?

• The two candidates' plans would have sharply different distributional effects.
  
• Senator McCain's tax cuts would primarily benefit those with very high incomes, almost all of whom would receive large tax cuts that would, on average, raise their after-tax incomes by more than twice the average for all households. Many fewer households at the bottom of the income distribution would get tax cuts and those whose taxes fall would, on average, see their after-tax income rise much less. McCain would lift after-tax incomes an average of about 3 percent, or $1,400 annually, for middle-income taxpayers by 2012. But, in contrast to Obama, he would cut taxes for those in the top 1% by more than $125,000, raising their after-tax income an average 9.5 percent.
  
• In marked contrast, Senator Obama offers much larger tax breaks to low- and middle-income taxpayers and would increase taxes on high-income taxpayers. The largest tax cuts, as a share of income, would go to those at the bottom of the income distribution, while taxpayers with the highest income would see their taxes rise. The Obama plan would reduce taxes for low- and moderate-income families, but raise them significantly for high-bracket taxpayers (see Figure 2). By 2012, middle-income taxpayers would see their after-tax income rise by about 5 percent, or nearly $2,200 annually. Those in the top 1 percent would face a $19,000 average tax increase—a 1.5 percent reduction in after-tax income.

POINTLESS ASIDE: Is it an accident that when I went onto the McCain site and tried to click around to the various parts of his "On the Issues" that I got the following error message "You Are Not Authorized to View this Page"? Can other people see the issues pages? Or is it just that they don't want ME to know...?

Where am I getting my information?

• BarackObama.com (Economy positions)
  
• John McCain (Economy positions)
• Tax Policy Center (with an analysis from June 2008 of each candidate' proposals)
  
• New York Times resource on candidate positions
• On the Issues.org
  

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Okay, and now for something completely different....

Poll numbers are out, and according to the Gallup Daily poll, McCain's convention bounce (5 points) has kicked in. I was initially depressed by the news, since Obama's convention bounce (6 points) was pretty much deflated by the Palin nonsense and the fact that no one answers pollsters on Labor Day Weekend. But then I read this piece from the AP about the "Get out the vote" effort-- Dems are working hard to register new voters. "Since the last federal election in 2006, volunteers like Graham combined with the enthusiasm generated by the Obama-Clinton struggle to add more than 2 million Democrats to voter rolls in the 28 states that register voters according to party affiliation. The Republicans have lost nearly 344,000 thousand voters in the same states."

If you're like me, and you love to scan polls incessantly, check out this graph, which shows an aggregate of polls (if the poll shows Obama leading there's a point above the center line, if McCain leads, it's a point below the line.) Although there are blips far above and far below the line, I feel that the majority cluster at or above the line. What do you think? Political Arithmetik also points out that we should take into account if the poll shows LIKELY voters as opposed to REGISTERED voters.

You might also enjoy trolling fivethirtyeight.com, which breaks down the electoral vote possibilities in more ways than you ever imagined possible.

An outsider's view of the RNC, from the London Times (who've become pretty punchy under Rupert Murdoch' watchful eye!). "Someone comments that Palin should drop McCain from the ticket. He stands there, stiff and twitching, with his skull grin, a good man, a decent, humane and committed man, fated by bad luck. It is his destiny to be in the wrong place at the wrong time, to fall from a great height into the hands of bad people."

From the Heart update: Although 80s rockers Heart can't do anything about Sarah Palin using their song 'Barracuda," since the GOP paid the appropriate licensing fees, Heart guitarist Roger Fisher announced that his part of the royalties will be donated right to the Obama campaign, so go ahead Sarah, use it all you like.

And where, oh where, do you really stand, Johnny Mac?? Brave New Films has a new segment out in which McCain is hoisted with his own petard, or with his own words, as it were. And through the magic of file tape and assiduously working interns, the Daily Show's Jon Stewart has put together a similar segment. I'd laugh...if I weren't crying....

Speaking of speaking, Factcheck.org has another good assessment of the newest McCain ad comparing Obama and Palin (hey, who's running against whom here??)

And my ranting wouldn't be complete without a Sarah Palin gaffe-awe. I guess I shouldn't be embarassed by my lack of economic expertise. Palin was apparently unaware that Fannie Mae and Freddie Mac were privately run companies. "Speaking before voters in Colorado Springs, the Republican vice presidential nominee claimed that lending giants Fannie Mae and Freddie Mac had 'gotten too big and too expensive to the taxpayers.'" Um, yeah, they did...today.

Well, forget mortgages, Palin's much better at handling her own finance perks. According to the Washington Post, Palin "has billed taxpayers for 312 nights spent in her own home during her first 19 months in office, charging a "per diem" allowance intended to cover meals and incidental expenses while traveling on state business. The governor also has charged the state for travel expenses to take her children on official out-of-town missions. And her husband, Todd, has billed the state for expenses and a daily allowance for trips he makes on official business for his wife. Palin, who earns $125,000 a year, claimed and received $16,951 as her allowance, which officials say was permitted because her official "duty station" is Juneau, according to an analysis of her travel documents by The Washington Post."

And what would these troubled times be without a dollop of Michael Moore? His Slacker Uprising, will be available to download for free on September 23. Watch the trailer here.

And finally, Michelle Obama dancing on the Ellen DeGeneres show, because I am, after all, a dance critic..