American Shareholders Association

Barack Obama Takes, Breaks Tax Pledge...In the Course of Five Minutes!

Clinton and Obama Propose Massive Social Security Tax Increase on Entrepreneurs

At the Philly debate, both Clinton and Obama pledged to not raise taxes on people making less than $250,000 per year.

Hillary kind of kept her word.  She advocated a "donut hole" where Social Security's FICA tax of 12.4% would stop being collected at $100,000 of wage and self-employment income, and would start up again at $250,000 (and presumably be uncapped from there).  That would result in a self-employed tax rate of 54.9%--the highest level since the Carter Administration.

Obama broke his "pledge" almost as soon as he said it:

First, his "pledge":

MR. STEPHANOPOULOS: An absolute commitment, no middle-class tax increases of any kind.

MR. GIBSON: Senator Obama, would you take the same pledge [not to raise taxes on those making less than $250,000]?

SENATOR OBAMA: Well, I not only have pledged not to raise their taxes, I've been the first candidate in this race to specifically say I would cut their taxes...

Then, the flip-flop:

SENATOR OBAMA: What I have proposed is that we raise the cap on the payroll tax, because right now millionaires and billionaires don't have to pay beyond $97,000 a year. That's where it's kept. Now most firefighters, most teachers, you know, they're not making over $100,000 a year. In fact, only 6 percent of the population does. And I've also said that I'd be willing to look at exempting people who are making slightly above that. But understand the alternative is that because we're going to have fewer workers to more retirees, if we don't do anything on Social Security, then those benefits will effectively be cut, because we'll be running out of money.

MR. GIBSON: But Senator, that's a tax. That's a tax on people under $250,000.

SENATOR OBAMA: Well, no, look, let me -- let me finish my point here, Charlie. Senator Clinton just said she certainly wouldn't do this; this was a bad idea. In Iowa she, when she was outside of camera range, said to an individual there she'd certainly consider the idea. And then that was recorded, and she apparently wasn't aware that it was being recorded. So this is an option that I would strongly consider, because the alternatives, like raising the retirement age, or cutting benefits, or raising the payroll tax on everybody, including people who make less than $97,000 a year --

MR. GIBSON: Those are a heck of a lot of people between $97,000 and $200(,000) and $250,000. If you raise the payroll taxes, that's going to raise taxes on them.

Obama Trashes the Laffer Curve on Capital Gains: The Audacity of Bad Math

More unbelievable stuff from the Philly debate.  Who knew Charlie "Jack Kemp" Gibson would be so on?

MR. GIBSON: You have however said you would favor an increase in the capital gains tax. As a matter of fact, you said on CNBC, and I quote, "I certainly would not go above what existed under Bill Clinton, which was 28 percent."   It's now 15 percent. That's almost a doubling if you went to 28 percent. But actually Bill Clinton in 1997 signed legislation that dropped the capital gains tax to 20 percent.

SENATOR OBAMA: Right.

MR. GIBSON: And George Bush has taken it down to 15 percent.

SENATOR OBAMA: Right.

MR. GIBSON: And in each instance, when the rate dropped, revenues from the tax increased. The government took in more money. And in the 1980s, when the tax was increased to 28 percent, the revenues went down. So why raise it at all, especially given the fact that 100 million people in this country own stock and would be affected?

SENATOR OBAMA: Well, Charlie, what I've said is that I would look at raising the capital gains tax for purposes of fairness. We saw an article today which showed that the top 50 hedge fund managers made $29 billion last year -- $29 billion for 50 individuals. And part of what has happened is that those who are able to work the stock market and amass huge fortunes on capital gains are paying a lower tax rate than their secretaries. That's not fair.  And what I want is not oppressive taxation. I want businesses to thrive and I want people to be rewarded for their success. But what I also want to make sure is that our tax system is fair and that we are able to finance health care for Americans who currently don't have it and that we're able to invest in our infrastructure and invest in our schools. And you can't do that for free, and you can't take out a credit card from the Bank of China in the name of our children and our grandchildren and then say that you're cutting taxes, which is essentially what John McCain has been talking about. And that is irresponsible.  You know, I believe in the principle that you pay as you go, and you don't propose tax cuts unless you are closing other tax breaks for individuals. And you don't increase spending unless you're eliminating some spending or you're finding some new revenue. That's how we got an additional $4 trillion worth of debt under George Bush. That is helping to undermine our economy, and it's going to change when I'm president of the United States. 

MR. GIBSON: But history shows that when you drop the capital gains tax, the revenues go up.

SENATOR OBAMA: Well, that might happen or it might not. It depends on what's happening on Wall Street and how business is going. I think the biggest problem that we've got on Wall Street right now is the fact that we've got a housing crisis that this president has not been attentive to and that it took John McCain three tries before he got it right.
And if we can stabilize that market and we can get credit flowing again, then I think we'll see stocks do well, and once again I think we can generate the revenue that we need to run this government and hopefully to pay down some of this debt.

Hillary Clinton Wants to Raise the Capital Gains Tax: Maybe To As High As 28%

From the debate last night in Philly:

MR. GIBSON: I'm going to go to a commercial break. But I just want to come back to one thing you said, and I want to be clear. The question was about capital gains tax. Would you say, "No, I'm not going to raise capital gains taxes"?

SENATOR CLINTON: I wouldn't raise it above the 20 percent if I raised it at all. I would not raise it above what it was during the Clinton administration.  [N.B the capital gains rate was 28% when Clinton entered office.  The GOP Congress forced him to cut it to 20% in 1997.]

MR. GIBSON: "If I raised it at all." Would you propose an increase in the capital gains tax?

SENATOR CLINTON: You know, Charlie, I'm going to have to look and see what the revenue situation is. You know, we now have the largest budget deficit we've ever had, $311 billion. We went from a $5.6 trillion projected surplus to what we have today, which is a $9 trillion debt.

Obama Caves, Joins the Investor Class

We're pretty humble here at the American Shareholders Association (well, not really).  However, it isn't every day you can introduce the most left-wing presidential candidate since George McGovern to the investor class.

I think we just did.

This morning, the Obamas released their 2007 income tax return.  For the first time, they actually indicate that Barack Obama (but not Michelle) contributed to either a SEP-IRA or a self-employed 401(k) plan.  $45,000 was put in (the maximum allowed).  Let's hope he invests in solid companies with growing profits.  That's the American way.

This contribution could have been made as late as Tuesday, April 15th.  The fact that the heat had been turned up on them by ASA and others made no small difference, we can hope.

Now that Obama is a member of the burgeoning new investor class, maybe he will stop his insane crusade to drive down shareholder wealth with a potent brew of protectionism, tax increases, and massive new regulation.

Tax Day Pic (ASA Participated)

McCain Proposes Economic Growth Plan

And it's very pro-investor.  Highlights for shareholders include:

• Keeping in place the 15% capital gains and dividends tax rate.  Hillary and Obama want to raise the capital gains tax to 20% (and higher), and the dividends rate to 39.6% (for starters)
• Cutting the corporate income tax rate from 35% (the second-highest in the developed world) to 25% (the average rate of our European competitors).  This will transform America from a jobs and growth repellant to a capital magnet
• Replace long and complicated depreciation of business assets with full, first year expensing for equipment and machinery purchases

These three items together would boost GDP and shareholder wealth to record levels.  The rest is ok, too.

Flat Tax vs. National Sales Tax

IRS Audits Going Up

Read it and weep.  If you make more than $100,000 or so (and especially if you have non-corporate income), hold onto your wallet.