OBAMA'S TAX SHIFT

Obama Claims Americans Earning Less Than $250,000 Won't See Higher
Taxes, But This Rhetoric Doesn't Match His Earlier Claims On Raising Taxes
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Today, Obama Claimed That A Family Making Less Than $250,000 Will Not See Higher Taxes Under His Plan:

Obama: "If you are a family making less than $250,000, my plan will not raise your taxes - not your income taxes, not your payroll taxes, not your capital gains taxes, not any of your taxes." (Sen. Barack Obama, Remarks On Taxes, Kaukauna, WI, 6/12/08)

NOTE: Earlier Today, Obama Campaign National Co-Chair Sen. Claire McCaskill (D-MO) Contradicted Obama, Saying Americans Earning "Under $150,000 A Year Would See No Tax Increase Of Any Kind":

Sen. McCaskill Said Americans Earning Less Than $150,000 Wouldn't See Higher Taxes - Not The $250,000 That Obama Claims. "[Sen. Claire] McCaskill called Obama middle-class tax cut 'massive' and stressed that those making 'under $150,000 a year would see no tax increase of any kind' -- not payroll tax, not capital gains, 'not a single tax,' [New Hampshire Congressman Paul] Hodes said." (Domenico Montanaro, "Obama V. McCain On Middle Class," MSNBC's "First Read" Blog, firstread.msnbc.msn.com, 6/12/08)

Obama Has Provided Varied Numbers On Who Would See Higher Tax Rates:

This Week, Obama Told Reporters He Would Raise Taxes On The Top 5 Percent Of Earners. "Speaking to reporters in St. Louis, he said he would eliminate the capital gains tax 'for the small businesses and startups that are the backbone of our economy.' His income tax plans, Obama said, would cut taxes for 95 percent of U.S. workers, while rolling back the Bush administration's tax reductions for the highest-earning 5 percent." (Matt Apuzzo and Charles Babington, "McCain, Obama Trade Jabs On Economy, Taxes," The Associated Press, 6/11/08)

In 2005, The Cut Off For The Top 5 Percent Of Earners Began At $145,283 - Well Below Obama's $250,000. "Including all tax returns that had a positive AGI, those taxpayers with an AGI of $145,283 or more in 2005 constituted the nation's top 5 percent of earners." (Gerald Prante, "Summary Of Latest Federal Individual Income Tax Data," www.taxfoundation.org, 10/5/07)

Obama Said Americans Earning $100,000 Or Less Don't Deserve To Pay Higher Taxes; Implied Americans Earning More Could See Higher Taxes. Obama: "And what I have said is, I will institute a middle-class tax cut. So, if you're making $75,000, if you're making $50,000 a year, you will see an extra $1,000 a year offsetting on your payroll tax." CNN's Wolf Blitzer: "Define middle class." Obama: "Well you know I think the definitions are a little bit rough, but let's just take it this way, if you're making $100,000 a year or less then you're pretty solidly middle class and you deserve relief right now as opposed to paying higher taxes. On the other hand, if you're making more tha n $100,000, and certainly if you're making more than $200,000 or $250,000, then you're doing pretty well." (CNN's "The Situation Room," 5/8/08)

During The Philadelphia Debate, Obama Said Americans Earning $200,000 -- $250,000 Would Be Subject To Higher Taxes. ABC's Charles Gibson: "Senator Obama, you both have now just taken this pledge [not to raise taxes] on people under $250,000 -- and 200-and-what? $250,000?" Obama: "Well, it depends on how you calculate it, but it would be between $200,000 and $250,000." (ABC Democrat Presidential Candidates Debate, Philadelphia, PA, 4/16/08)

Obama Has Called For Lifting The Earnings Cap On The Payroll Tax, Which Would Raise Taxes On Americans Earning Over $102,000:

Obama: "The best idea I think, is to raise the cap on the payroll tax. Now, let me explain. Right now you only pay on the first $102,000 that you earn. After that you don't pay payroll tax. What that means is, is that for 95 percent of the people, you pay payroll tax every dime you earn, you're paying payroll tax. But for that top 5, 6 percent of the people who earn more than that, they're getting a little bit of a break. And my friend Warren Buffet who earned - I don't know what he earned last year he had a good year last year, year before that he earned about $46 million -- it means he's paying payroll tax on only a fraction of his income. Now that's not fair. So what I've suggested is, we look at the possibility of raising the cap so that it applies to more of the income of very wealthy people." (Sen. Barack Obama, Remarks At A Campaign Ev ent, New Albany, IN, 4/23/08)

Obama Is Comfortable Raising Payroll Taxes On Americans Earning $102,000 A Year Or More. Obama: "And in terms of raising the payroll tax, raising the cap on the payroll tax, right now everybody who is making $102,000 or less pays 100 percent, payroll tax on 100 percent of their income. There are about 3 - 4 percent of Americans who are above $102,000 in income every year. So if you want to talk about who's middle class, me giving cuts to folks making $60,000, $70,000 and potentially asking more from friends of mine like Warren buffet who I have no idea what he made last year, you know, that's a debate I'm happy to have with John McCain." (Fox News' "Fox New Sunday," 4/27/08)

Obama Called For A Higher Capital Gains Tax, And Argued That The "Average Person" Wouldn't Be Affected:

Obama Said He'd Raise The Capital Gains Rate To 20 Percent Or Higher, And Said That Wouldn't Impact The "Average Person." Obama: "In terms of capital gains, I've suggested we might go back up to 20 (percent), because..." Fox News' Chris Wallace: "You had suggested 28 (percent)." Obama:

"Well, what I've said is I certainly would not raise it higher than it was under Ronald Reagan, but the fact is that I'm mindful that we've got to keep our capital gains tax to a point where we can actually get more revenue. But that's not something that's going to affect the average person with a 401(k) when people start talking about how, 'Well, there are, you know, millions of Americans who own stock,' most of them own stock in 401(k)s where their taxes are deferred and they pay ordinary income taxes when they finally cash out." (Fox News' "Fox New Sunday," 4/ 27/08)

Obama Claimed That The Argument That Middle Income Americans Would Be Hurt By A Capital Gains Tax Increase Is "A Phony Argument." CNN's Wolf Blitzer: "Because they're arguing already that you want to increase capital gains taxes for example, on investments and stocks and things like that. A lot of middle class people have those kinds of accounts." Obama: "If they have -- Wolf, if they have a 401(k) then they are going to see those taxes deferred and they're going to pay ordinary income when they finally cash out. So that's a phony argument and this is something that you've seen the Republicans consistently do is they try to make this broad-based argument about he's going to raise your taxes as a cover for them eliminating taxes for people like myself and you who can afford to pay a little bit more." (CNN's "T he Situation Room," 5/8/08)

NOTE: It Wasn't Until This Week That Obama Definitively Clarified That Middle Income Americans Would Be Exempted From His Capital Gains Tax Hike. Obama: "You know, I generally define well off as people who are making $250,000 a year or more, and that means, for example if we raise the capital gains tax, I would exempt people who are essentially small investors and really capture those who have done very, very well over the last two decades." (CNBC's "Your Money, Your Vote: McCain Vs. Obama," 6/10/08)

Obama's Health Care Plan Calls On Employers That Don't Provide Insurance To Forfeit A Percentage Of Their Payroll, Which Is Really Using The Employer To Collect Taxes From The Workers:

Obama's Health Care Plan Calls On Employers That Don't Provide Insurance To Forfeit A Percentage Of Their Payroll. Obama For America: "Employers that do not offer meaningful coverage or make a meaningful contribution to the cost of quality health coverage for their employees will be required to contribute a percentage of payroll toward the costs of the national plan." (Obama For America Website, www.barackobama.com, Accessed 1/8/08)

According To University Of Pennsylvania Professor Mark Pauly, "The Employer Mandate Is Really Using The Employer To Collect Taxes From The Workers..." (Sara Lubbes, "Perils And Pluses Of 'Play Or Pay' Insurance Mandates," CQ HealthBeat News, 9/18/07)

The Cost Of Government-Mandated Health Insurance Would Likely Be "Passed On To The Employee In The Form Of A Wage Cut." "But more likely, the cost of the government-mandated insurance would be passed on to the employee in the form of a wage cut, said Mark Pauly, a professor of health care systems at Wharton School at the University of Pennsylvania." (Sara Lubbes, "Perils And Pluses Of 'Play Or Pay' Insurance Mandates," CQ HealthBeat News, 9/18/07)

Obama's Plan "Would Result In Lower Wages For Some Employees." "Mandates that require employers to provide health benefits or pay a percentage of their payrolls as a tax -- a proposal backed by Sens. Hillary Clinton and Barack Obama -- would result in lower wages for some employees." (Guy Boulton, "Better Benefits Or Higher Wages?" The Milwaukee Journal Sentinel, 5/5/08)

Small Businesses Would Be Hardest Hit. "The biggest impact would be on small businesses, which are less likely to offer health benefits, and industries that employ more low-wage workers." (Guy Boulton, "Better Benefits Or Higher Wages?" The Milwaukee Journal Sentinel, 5/5/08)

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