I see in an article today that Obama is expected to re-suggest a cap of 28% on the value of a deduction for rich people making over $100k a year. He feels it is 'unfair' that someone in the 39.6% tax bracket to actually get a deduction valued at that rate rather than at 28% like someone in the 28% tax bracket would get. Maybe I am missing something but is it only worth 39.6% because they are taxed at 39.6% rather than the 28% bracket. Suggestion: Lower the tax bracket to 28% then the rich would only get a 28% value like everyone else. Then we all can agree that a given tax deduction is worth the same for everyone. Then rich people would not be getting an unfair advantage. BTW - when did the definition of a rich person get lowered to $100,000 from say $1 million dollars like it was many moons ago. Should not the definition be going up with inflation?
Friday, April 5, 2013
Thursday, March 27, 2008
Obama Calls for Overhaul of Financial Regulations
According to an article on stocks and the economy, democrat Barack Obama said the government must overhaul the rules governing banks and other financial institutions in the wake of a collapse in the subprime mortgage market that has shaken confidence in the U.S. economy. Saying the nation has lost a "sense of shared prosperity,'' the presidential candidate called for giving the Federal Reserve greater supervisory authority when it acts as a lender of last resort, strengthening the capital requirements for financial companies and streamlining the collection of overlapping regulatory agencies that oversee Wall Street.
"Our free market was never meant to be a free license to take whatever you can get, however you can get it,'' Obama said in an address at New York's Cooper Union for the Advancement of Science and Art. "The American economy does not stand still, and neither should the rules that govern it.''
A deepening slump in the housing market and declines in business investment, consumer spending and construction are prompting sparring among Obama, Hillary Clinton, his rival for the Democratic nomination, and Republican presidential candidate John McCain over how to pull the U.S. back from the brink of a recession and deal with the risks exposed by the credit crisis. All three have delivered speeches on the economy this week.
McCain spokesman Tucker Bounds said in a statement after Obama's speech that the Illinois senator is endorsing the "failed liberal policies of the past.'' In his own economic speech March 25, McCain, an Arizona senator, urged revisions focused "solely on preventing systemic risk'' and not assisting speculators.
Clinton, a New York senator, has called for spending more on job training and for a $30 billion program to help homeowners and communities hit by rising foreclosures to stimulate the economy. Neera Tanden, a Clinton spokeswoman, said Obama was offering "vague principles'' rather than "concrete solutions to provide Americans with greater confidence in the market or keep them in their homes.''
Campaigning today in North Carolina, Clinton added to her economic proposals with a plan for spending $12.5 billion over five years to help displaced workers with training programs and grants for education.
She and Obama criticized McCain, 71, saying he was offering an extension of the economic policies of Republican President George W. Bush.
"I don't think we can afford four more years of that kind of inaction,'' Clinton, 60, said in Raleigh.
Addressing what he said was a flawed regulatory system, Obama blamed both Democratic and Republican administrations for peeling back rules put in place in reaction to the Depression of the 1930s without adapting to changes in the financial marketplace.
"The result has been a distorted market that creates bubbles instead of steady, sustainable growth; a market that favors Wall Street over Main Street, but ends up hurting both,'' Obama said.
He cited the repeal in 1999 of the Glass-Steagall Act, which separated commercial and investment banking and one of the hallmark laws of the late President Franklin Roosevelt's New Deal economic program. While that allowed banks and securities firms to compete more directly, the absence of a replacement reflecting changes in financial markets led to excesses.
"Instead of sensible reform that rewarded success and freed the creative forces of the market, too often we've excused and even embraced an ethic of greed, corner cutting and inside dealing that has always threatened the long-term stability of our economic system,'' he said.
Obama proposed six areas to revamp regulations.
The Federal Reserve should have basic supervisory authority over any institution to which it may make credit available as a lender of last resort, Obama said. "Taxpayers have every right to expect that these institutions are not taking excessive risks,'' he said.
Second, requirements for capital, liquidity and disclosure should be strengthened for all financial institutions, especially for "complex financial instruments like some of the mortgage securities that led to our current crisis,'' he said.
Obama said the government needs to restructure the overlapping and competing regulatory agencies because today's financial institutions no longer fit within specific categories created decades ago.
Related to that, regulations need to change to apply to what institutions do, not their title, he said. Homeowners weren't protected in part because commercial banks and thrift institutions were subject to guidelines on subprime mortgages that did not apply to mortgage brokers and companies.
"It makes no sense for the Fed to tighten mortgage guidelines for banks when two-thirds of subprime mortgages don't originate from banks,'' Obama said. "When it comes to protecting the American people, it should make no difference what kind of institution they are dealing with.''
Lastly, Obama called for the creation of a financial market oversight commission to identify unanticipated systemic risks to the financial system. The commission, he said, would meet regularly with the president, Congress and regulators and brief them on the state of financial markets and risks.
Obama, 46, is offering a "credible approach,'' former Federal Reserve Chairman Paul Volcker, an Obama supporter who attended the speech, said in an interview. "You can't solve this problem overnight, but you've got to have a thoughtful review of it and accept the logic that regulatory authority has to be extended and strengthened.''
William Donaldson, former chairman of the U.S. Securities and Exchange Commission and an Obama supporter, said the economy needs "some 21st century reorganization'' to prevent future crises in housing and financial markets, "all of which were sort of driven through a hole in regulation.''
The Commerce Department reported today that the U.S. economy grew at an annual pace of 0.6 percent from October though December, another sign that the U.S. economy may be close to or already in a recession. Orders for durable goods unexpectedly fell in January as companies became more hesitant to invest, the Commerce Department said yesterday. Sales of new homes dropped to a 12-year low.
Thursday, February 21, 2008
McCain's 'No new taxes' redux
According to an article on income taxes on dallasnews.com, has made the same promise that George Bush 41 made in 1988: “No new taxes”…
As he received former President George H.W. Bush's endorsement in Houston, John McCain noted that they had two things in common: Both were naval pilots, and both were shot down.
A day earlier, however, the presumptive Republican nominee added a third similarity, when he echoed Mr. Bush's most ill-fated 1988 campaign promise: "No new taxes."
On ABC's This Week with George Stephanopoulos, Mr. McCain pledged that under "no" circumstances would he increase taxes. He reiterated his support to make permanent the 2001 Bush tax cuts he once opposed, adding that he'd also like to eliminate the Alternate Minimum Tax.
It's a multibillion-dollar promise that Mr. McCain could rue if he wins the White House – and one more example of how appeals to various groups in primary campaigns can create problems down the road for a winning candidate.
The problem is not confined to the Republicans. Barack Obama and Hillary Clinton have promised to increase federal programs beyond what they may be able to deliver. Mr. Obama also says he'd withdraw all U.S. combat troops from Iraq within 16 months.
According to the Center on Budget and Policy Priorities, a liberal think tank, making permanent both the Bush tax cuts and the AMT fix would cost the government $3.6 trillion in revenues over the next decade. Repealing the AMT would cost even more.
Upper-income taxpayers would be prime beneficiaries of both moves.
A recent NBC-Wall Street Journal poll showed those surveyed evenly split on the economic merit of tax cuts. In an Associated Press/Ipsos poll, respondents put tax cuts below pulling out of Iraq and increasing federal domestic spending when asked what would help fix the economy significantly.
Reciting the tax-cut mantra may help Mr. McCain overcome some GOP doubts about his fealty to conservative principles, but it could cause him grief if he wins.
