Watch excerpts of Sen. Obama's tax policy speech.
WASHINGTON (CNN) – Barack Obama unveiled his tax cut plan Tuesday in Washington. Some would call it a Robin Hood approach, taking from the rich and giving to the poor. (Related: Obama tax plan: $80 billion in cuts, five-minute filings)
"At a time when Americans are working harder than ever, we are taxing income from work at nearly twice the level that we're taxing gains for investors," said the Democratic presidential candidate.
Obama said the current tax system is working against most Americans and he wants to fix it, arguing, "I'll restore simplicity to the tax code and fairness for the American middle class. It's time to stand up to special interest carve outs.”
Obama said his plan calls for “cutting taxes for working people, homeowners, and seniors."
Among the specifics: a tax cut of up to one thousand dollars for 150 million working Americans, a tax credit for homeowners that don't itemize their deductions, eliminating the income tax for seniors making less than 50 thousand dollars annually, and a simplified tax filing process
The Illinois senator said that he’ll pay for all this by “shutting down corporate loopholes and tax havens. We'll also turn the page on an approach that gives repeated tax cuts to the wealthiest one percent of Americans even though they don't need them and didn't ask for them."
That sounds similar to Obama’s Democratic rivals, including Sen. Hillary Clinton, D-New York, and former Sen. John Edwards, D-North Carolina. They rolled out their tax plans earlier this year – with Clinton calling for “rolling back some of President Bush's fiscally-irresponsible tax breaks for the highest income Americans," and Edwards pledging to “get rid of Bush's tax cut for people who make over two hundred thousand dollars a year."
Tuesday’s announcement in Washington is part of an economic policy push by Obama. On Monday, he was at the NASDAQ headquarters in New York City, chastising Wall Street executives for looking out for themselves rather than helping the middle class.
– CNN Deputy Political Director Paul Steinhauser
One of the comments reads "do you really think it is the government's responsibility to take from those who have worked hard and have earned the success of hard work and give some of their earnings to those who will, generally speaking, not appreciate it and not actually better themselves?
Distribution of wealth, is that your plan? Are you a socialist, sir?"
What this comment ignores is that the poor also have to work hard but because they have not been given the same opportunities, have not had the same education that the wealthy can afford, they may lack not only the wealth but also an understanding of how to keep and accumulate wealth.
The solution to that is more education for the poor, not abandoning them. As Bill Gates in his recent commencement speech at Harvard said:
“From those to whom much is given, much is expected” and "reducing inequity is the highest human achievement"
Why is it that every time a politician tries to advance policies that might be detrimental to the very rich, they are labeled as a socialist? Are all the European countries that offer free health care and free education socialists?
All those bashing Obama, any new ideas from your Republican candidates or just more of the same? We all agree the system is broken yet you guys only want to engage in political dance
Currently, if you earn $100 through sweat as a worker, you get taxed nearly double than if you make $100 simply through gains from the stock market.
Same income, different tax rates. Seems unfair, right?
This system was put in place, mostly by Republicans, to have wealth "trickle-down" from the rich to the poor. Their theory is that the rich would be benevolent enough to share the wealth via more investing for more creation of jobs. The only problem is, investors don't have to be benevolent–they could simply keep the extra money for themselves. And this is what happened.
On the opposite end of the spectrum, if you tax investors more than the workers, you get less productive workers which leads to less overall jobs for the workers.
The golden egg is trying to reach the perfect balance. So far nobody has been successful.
But now here's Obama. He simply wants to make it even: No matter how you earn that $100, you get taxed the same. A hundred is a hundred, right? Simple. It actually just might work. And it seems a lot more fair than what we have right now.
Some of what Sen. Obama says makes sense.
Assume two people go into business together, with one person putting up the money and the other person doing the work. Now imagine that at the end of the day they each make $1000.00. Is it really fair that the "investor" gets to pay a lesser tax rate than the "laborer?" Of course not. Both labor and capital are essential elements to capitalism, and Sen. Obama is right on the mark when he says that our current tax code incorrectly values wealth over work. I do not begrudge the wealthy their money nor do I wish to punish them for their success, but I don't believe a regressive tax serves our society.
However Sen. Obama ~misses~ the mark, as do many Democrats, when he seeks to provide tax cuts to the lower economic classes. The fact is, if you are married with a couple kids and make $50K or less, then you already pay little or no income tax, and in many cases you actually qualify for Federal subsidies in the form of the Earned Income Credit and the Additional Child Tax Credit. Now, just as I don't begrudge the wealthy their success, neither do I begrudge the poorest among us for not contributing to our collective expenses - I appreciate how difficult it can be to exist and raise a family on nominal amounts of money. However, if we wish to assist the lower classes, additional tax cuts are going to have little or no effect. We would be better served to invest in increasing access to and affordability of healthcare, higher education, and retirement savings.
The group that TRULY needs tax breaks is the middle class - those households making $50K to $200K. These are the people who are paying the heaviest amount of taxes as a percentage of their income - most of them earn their living through their labors, therefore they are subject to the progressive tax rates (and in many cases the self-employment tax), and because of their income level, many credits and deductions are not available to them.
I have a lot of respect for Sen. Obama, but he has disappointed me here. He has always impressed me as someone seeking quality solutions to America's problems, but with this tax plan he hasn't come up with anything particularly original, and some of his supposed "big ideas" are going to have little or no value, while the people who need help the most continue to be ignored.
There is nothing noble about socialism or redistribution of wealth. It's theft plain
He wants to put a heavier tax burden on those of us that already pay the lion's share
of taxes and have those who pay little pay even less! What's even worse is that it
doesn't even take into consideration regional cost of living expenses. 200k a year in
the Peoples Republic of Maryland isn't the same as 200k a year in a low cost of
living state like Alabama.
If he was at all serious about making the tax code FAIR he'd push for a flat tax
across the board. Same tax percentage for everyone regardless of income.
But that would make him a bad socialist wouldn't it?
What do you mean that the rich are working harder so they deserve their money ... the scam is that they are paying other people lousy wages to work hard for them while they enjoy the fruits of all their workers. Let's not forget that without those workers/employees, He/She might actually have to do the work themselves.
Workers have a vested interest in the success of their employer and will always work best when they also get to bask in the success of the company. Instead, they work hard for nothing to put out a wonderful product, and are rewarded with nothing but contempt.
Can't we stop positioning ourselves to either extreme of center and instead come together with compromises that return us to a society that really takes care of everyone and has a little compassion that sees beyond profits and war?
Rich people work for their money too. How can people think this is fair? This plan is idiotic.
Yeah, do that. We'll all be on welfare.
I'm sick of politicians demonizing wealthy Americans, acting like they didn't do anything to earn their fortunes, and therefore it's acceptable to simply take their money away and give it to other people. And here I was somehow thinking that Obama was a fairly moderate Democrat... please don't vote for this guy!
"WASHINGTON (CNN) – Barack Obama unveiled his tax cut plan Tuesday in Washington. Some would call it a Robin Hood approach..."
Some would say CNN is following FOX.
Ok....so I took the time to read Obama entire economic plan, and now I'm wondering what the hell this so-called "Robin Hood" nonsense is about.
Why can't CNN resist the urge to smear Obama at every instance? There is nothing remotely close to a Robin Hood theme in Obama's economic plan....shame on CNN.
I can hear the republics screaming their tiny little heads off now. Close the loopholes, make the big corporations pay their fare share. Bush the Socialist has been taking from the poor and giving to the rich, this will be a nice reversal of fortune now won't it.
Robin Hood is a fiction, just as is most of the "news coverage" by CNN. In trying to compete with Fox Fake News, CNN has once again provided the right wing noise machine with a cute and entirely inaccurate sound bite rather than offering a reasoned and sensible presentation with a serious intro.
I don't think our tax system should impoverish the rich or enrich the impoverished. But the rich don't play fair. We need an entirely new, simple, progressive tax system with no loopholes or deductions for anyone, period. How about a 25% tax rate for every income over $300,000 a year, progressing precipitously downward so that the rate is 0% for anyone under $75,000? A guy making $50 million would pay $12.5 million in taxes and would be forced to get by on only $37.5 million. I could live with that, couldn't you? Such a plan would probably triple the amount the govt. takes in, with the rich paying most of the bill, which is only fitting.
Obama is making sense as usual. It's as if somebody dropped a talent bomb on the rest of Washington and he was the only one in the bunker that didn't get hit. Everything the dude says resonates... because it's true and its what the vast majority of America has been thinking.
I spent my 300 dollar tax cut in about a week, and now I watch kids go to school without textbooks. Does that make sense?
What really doesn't make sense is that the richest people in this nation get tax cuts they didn't ask for and use the money almost entirely overseas, pulling their money out of our economy.
This is wrong, wrong, wrong. How can we have the costliest war in history, have schools without text books and a healthcare system ranked 46th in the world, beside third world countries, and the highest infant mortality rate in the industrialized world, and STILL be giving Paris Hilton a tax break?
Screw that. I'm so totally relieved to find a sane politician for a change. But this isn't Robin Hood economics Obama is talking. It's just common sense, as with most things Obama says.
What is pure highway robbery is what King George and the neocons of Nottingham have done to our country in seven years. They've wrecked us. Sherwood Forrest is a toothpick factory filled with Chinese sweat shop labor. Our bridges are collapsing and the neocons are laughing all the way to the bank. It's an even bigger joke than their idea of "small government, which is really just code for "government that does nothing and takes everything for their golf buddies."
Every time they want a tax refund check in the mail they cry "war on terror" and rack up another 200 billion in oil profit. Meanwhile, good men and women are having limbs blown off and dying and coming back to hospitals that don't even have decent sanitation for crying out loud in buckets!
Barack Obama represents the best hope we have of actually regaining some sense of responsibility and sanity. He has integrity, which appears to be a dirty word in Washington. He doesn't deal with lobbyists, which is also code for "bandits in the woods."
I sincerely don't believe anyone else can change the greedy, corrupt, pig sty that is the Washington beltway but Barack Obama.
Can you smell what The Obama is cookin'?
Yesterday's pig is tomorrow's bacon. Sizzle. Robin Hood is in town with a vengence and he's here to stay.
Watch out, it's BBQ time.
Obama 08. Don't be late. Stop the hate.
The rich get richer and the poor get poorer. It is a proven fact that you can't build anything from the top down. I've read these comments (both good and bad) about Senator Obama, and if you who think for a minute that working people making more money is a bad thing wrap your head around this. If working people are making more than they absolutly need to survive they might buy a new car or not loose teir house. They will buy some things to improve there lifestyle improving the economy making the wealthy more money. What I'm trying to say is if you give the poor man a decent paycheck, he will spend it maybe save some back (heaven forbid he could pay for his kids college or daughter's wedding without taking out a second morgage) and evertbody wins, not just a select few. GO OBAMA 08!! Ross in Davenport. Yeah that's in Iowa.
There's a reason you're poor. It's because you aren't too smart, you don't actually work hard, or any number of other reasons that aren't the fault of the government. Nothing will change that. Stop looking for a handout and work harder.
Has anyone ever heard of tax policy that is based on traditional American principles of fairness? Bravo Barak for advocating tax policy that acknowledges the indirect benefits and responsibility of those who inherit wealth yhat was created largely by the efforts of the less fortunate who did not! Wealth promotes greater access to opportunity and tax policy MUST be based on that fact.
I'm not big on this tax plan as I think it is by its very nature, unfair. Why should taxes be based on what we earn? We should be rewarded for what we earn, not punished by means of taxation. A more equitable means of taxation would be to tax based on consumption. The more we purchase, the more we pay in taxes. This would encourage savings and spread the tax burden over the income levels more evenly.
So all you naysayers, what's the alternative? More of the Bush/Cheney tax cuts that benefit only the wealthiest 1 percent? Are we supposed to keep hoping for a little of that "trickle down" that never seems to trickle down?
No matter what, greedy CEOs are still going to take advantage however they can. Tax loopholes, writing off yachts and new luxury cars, outsourcing, etc. And the middle class still gets stuck with the tax bill.
The rich don't pay taxes because they have lawyers and accountants and don't have to. The poor don't pay taxes because they don't have any money. So who does that leave to shoulder everything? Yes, the working poor middle class.
Tax the wealthy. That sits fine with me. They have more money, they can pay more taxes. The alternative is to continue to beat the middle class out of existence, until very rich people and very poor people are that's left.
Go Obama, you're on your way to earning my vote.
Love the ditto-heads sobbing over the plight of the enormously wealthy.
Obama is making some desparate promises with no teeth to them. This country is mortgaged to China. Tax cuts are not the answer. It deepens debt. Take the CEO's of major corporations, cut their future bonus package and return it to the workers. Careful on making promises you can't keep. Though it sounds good it is the same as tax cuts for the wealthy the Bush administratin kneels to.
"Robin Hood" tax plan. Right. Guess that makes Bush's tax policies the "Prince John" tax plan.
The notion that taxation is in some manner equivilent to theft is a favorite right wing extremist theme that the press, and particularly the mindless press that is CNN, have apparently internalized.
It's not theft. Its progressive taxation. Once upon a time, the rich and powerful in this country understood that they had the biggest stake in the society and that ten thousand bucks in taxes means a lot less to a guy making a million a year than it does to a guy making thirty thousand a year. Now, all they do is whine about having to pay any taxes at all and, especially, about the horrible injustice of their heirs having to pay taxes on their inheritances.
For God's sake people, wake up! When Warren Buffet's effective top marginal rate is less than that of the lowest-paid secretary in his office, something has gone badly wrong with our society.
Worse, in ever prior war this country has ever fought, the country's wealthy stepped up and took a hit for the team (and, of course, got a lot of it back in profits from war industries.)
Now, however, we are cutting taxes on rich people and financing it with money borrowed from our most powerful global comptitor and potential enemy. That is absolutely insane.
Rose Hann, London CT,
It does not seem like you read the entire speech. Barack has detailed his plan accordingly and this is a very good proposal. I know you have been frustrated by empty promises before but I believe that Obama is genuine and true. He is not bending towards tax cuts for the rich but tax cuts for the wealthiest. This will relieve the middle class and the poor. Good job Barack! With you as POTUS, America will dare to dream and hope once more!
ooops. I meant he is proposing tax cuts for the middle class and poor.