McCain and Obama

[tsmooth]

Great read if you have the time:

http://www.eclecticwill.com/2008/10/open-letter-to-sen-obama-from-corey-miller-the-well-driller/

These are the people we are going to take more money from for people who pay little or no tax?

 

[Rich]

The day socialism comes to America

Ken, Did you think Reagan was a socialist? Do you understand that Obama's plan would still have lower tax rates than when Reagan was President? Please give us one fact that shows Obama is going to bring Socialism to America. Instead of using fear and buzzwords, try making your point with a few facts.

 

[Rich]

These are the people we are going to take more money from for people who pay little or no tax?

ExxonMobil just had another record-breaking quarter. Higher profits than any U.S. company has ever posted! But I guess you would prefer to give them some more tax breaks so those who are working their butts off for minimum wage can pay more to support our failing infrastructure? Why is taking from the poor and giving to the rich considered capitalism, while doing it the other way around is considered socialism? They are both forms of redistribution of wealth.

 

[tsmooth]

OMG, an oil company made a profit? To bad Exxon mobile paid/will pay THREE times as much in taxes then they pulled in for profits.

2006: $39.5 billion in profits, $28 billion of that went for TAXES.

2007: $40.6 billion in profits, $30 billion of that went for TAXES.

WHO IS MAKING OUT LIKE A BANDIT?

Rich, how much should they pay? Capitalism is allowing, at reasonable levels, to keep what one has earned. Obama is not talking about redistribution of wealth, he is talking about redistribution of income. It is not the Ted Kennedy's of the world that will be paying that bill, it is the working people making over $150,000 (according now to your own Joe Biden) paying a large portion of the bill.

 

[Kevmars]

Yup, and Exxon mobile paid three times as much in taxes then they pulled in for profits.

2006: $39.5 billion in profits, $28 billion of that went for TAXES.

2007: $40.6 billion in profits, $30 billion of that went for TAXES.

WHO IS MAKING OUT LIKE A BANDIT?

Rich, how much should they pay? Capitalism is allowing, at reasonable levels, to keep what one has earned. Obama is not talking about redistribution of wealth, he is talking about redistribution of income. It is not the Ted Kennedy's of the world that will be paying that bill, it is the WORKING people making over $150,000 (according now to your own Joe Biden) paying the bill.

I'm at a loss as I am just chiming in here. But you're saying they spent 28 billion dollars to make 11.5. That doesn't compute on any scale. You haven't even talked about overhead and other up front costs. I work at a law firm and rich companies and people go to great efforts to extend and tie tax money up. I'm not really voicing an opinion either way because I'm not reading this whole thread but that just seemed interesting to me. Obama is definitely not making any friends with the "tax the rich" plan. But McCain is basically saying, get into the upper echelon or join the lower class. As he said he's trying to make the pie bigger. He doesn't care if you get a piece or not.

 

[tsmooth]

Sorry if I was unclear.

 

[Rich]

2006: $39.5 billion in profits, $28 billion of that went for TAXES.

2007: $40.6 billion in profits, $30 billion of that went for TAXES.

WHO IS MAKING OUT LIKE A BANDIT?

First of all, that is an incorrect analysis. The profits you show are after-tax profits. Their actual revenues were much, much higher. So the 40 billion in profits is free and clear profit after all taxes were paid.

Second, I don't necessarily think Exxon should pay much higher taxes. I just think they don't deserve any greater tax breaks, as McCain has proposed. Further, I think that they should pay reasonable rates for oil and gas leases. They are allowed to take our Nation's natural resources for their own profit, and they should pay reasonable royalties for that right.

What you fail to mention is that companies like Exxon receive billions of dollars in tax breaks, subsidies, and royalty relief from the federal government every year. Also, you fail to mention that Exxon's profit is really much higher, but creative accounting methods allow them to make it look smaller than it is for political reasons. This happens all the time in many industries. Especially multinational corporations are able to play with exchange rates of various countries to keep their taxable income as low as possible.

 

[tsmooth]

You are right, the first number posted was the company's net income after tax. The second number represents the taxes paid only on earnings.

This was taken from the Tax foundation from Feb, 2007:

"While they were recording record profits last year, they were also writing checks to Uncle Sam to the tune of $100.7 billion -- two and a half times what they made in net profit."

I believe that statement speaks for itself

 

[Statman]

You are right, the first number posted was the company's net income after tax. The second number represents the taxes paid only on earnings.

This was taken from the Tax foundation from Feb, 2007:

"While they were recording record profits last year, they were also writing checks to Uncle Sam to the tune of $100.7 billion -- two and a half times what they made in net profit."

I believe that statement speaks for itself

So you work in the industry? The profits are coming from somewhere, can you explain?

 

[tsmooth]

Not trying to explain, I am just under the impression that the more they are taxed the more they are going to pass that cost onto the consumer. We know they are definitely not spending that money exploring alternative enery sources. Rich, as usual, brings up a few good points as well. I am not trying to defend them, just bring up the other viewpoints you don't see in the headlines.

 

[risabet]

The day socialism comes to America


"The American people will never knowingly adopt socialism, but under the name of liberalism they will adopt every fragment of the socialist program until one day America will be a socialist nation without ever knowing how it happened."
– Norman Thomas, American socialist

Not the "socialist" boogeyman again. Bush 41 used it in his desperate attempt to get re-elected, remember his "European Socialism" statement. He got no traction from it then and McCain isn't getting any with it now. I know some people who would literally love to have some of that socialist healthcare so they wouldn't be in debt and about to lose their house.

 

[theWB]

Not trying to explain, I am just under the impression that the more they are taxed the more they are going to pass that cost onto the consumer.

Or how about not producing or making anything in or country anymore.
Including some of our own beloved ML products.

The United States has one of the highest average effective tax rates on business in the world at 38%.

Higher effective rates discourage businesses from making capital investments in new machines, structures, land or inventory.

Simply put, the additional burden of having to pay a high effective tax rate lowers an investment's risk-return to the point where many executives say "Why bother?" and look for investments with higher returns - often in foreign countries.

Anyone care to guess witch nation has the lowest average efective tax rate??


Hong Kong at just 6.1%

Singapore at just 11.5%

Or how about our neighbors to the south, Mexico at just 13.8%

Combine that with a lower working wage, is it any wonder more and more US owned companies choose to manufacture outside our own country.

 

[Rich]

The United States has one of the highest average effective tax rates on business in the world at 38%.

Higher effective rates discourage businesses from making capital investments in new machines, structures, land or inventory.

And yet we have by far the largest GDP in the world! So please explain how these high tax rates are causing businesses to leave us in droves? Hong Kong? Singapore? Their economic output is a fraction of what ours is. We have had high corporate tax rates for decades and decades in this country. And yet we still top every other country in the world on GDP! Where are the facts which support this notion that these high tax rates are forcing companies out of our country? Driving businesses to manufacture overseas? In Alabama, we have a Hyundai plant, a Mercedes Plant, a Toyota plant, A Honda plant, and Volkswagon is bringing a plant in soon. Looks to me like companies from other countries are coming here to manufacture.

I guess my point is that these are very complex issues that involve many factors, and trying to put up a one-liner answer like high taxes are driving our businesses overseas is not only factually incorrect, but it just ignores the larger complexity of a global manufacturing economy.

Combine that with a lower working wage, is it any wonder more and more US owned companies choose to manufacture outside our own country.

A US owned company will have to pay taxes in the US, regardless of where it is manufacturing its products. The reason they choose to go overseas is cheaper labor rates, lower environmental and labor regulations, and perhaps cheaper availability of raw materials. They also tend to give up a certain amount of quality when they do that, which is one reason ML has chosen not to outsource their high end lines to China like they do their lower end products.

 

[Len44]

And I for one thank-you much for it. This tax plan scares me to death. It would seem that if a corporation is being taxed at a rate that is the second highest on the planet. That corp. might find a reason to move its biz way off shore (if you know what I mean) I would say big deal except the fact that they will take those jobs with them also.

Just a couple (OK,OK -- Three) examples out of many, many references one could provide. I, for one, am NOT willing to let large corporations off the hook as they PAY NO TAXES, or pay at a rate far less than 90 percent of, uh -- what's that Republican term? Ah yes, "Real Americans" -- a rate less than 90 percent of "Real Americans" pay.

http://www.pbs.org/wgbh/pages/frontline/shows/tax/interviews/mcintyre.html

http://www.albertleatribune.com/news/2008/oct/31/big-corporations-will-pay-taxes/

http://www.huffingtonpost.com/2008/08/12/representation-without-ta_n_118455.html

I am so very sick and tired of Bush and his minions infamous and reckless "anything goes" policies. Never mind how badly if affects most of us, just so long as his super-rich big oil and big business buddies get all of their breaks so they can feed at the trough. It has been a sickening eight years.

 

[Rich]

And I for one thank-you much for it. This tax plan scares me to death. It would seem that if a corporation is being taxed at a rate that is the second highest on the planet.

Doug, please be specific. What exactly is it about Obama's tax plan that scares you to death? He is proposing bringing tax rates back to what they were during Clinton's term, lower than they were during Reagan's term. Did businesses suddenly flock away from the country after Reagan and Clinton?

Again, why can't someone explain to me . . . If these tax rates are so onerous and are going to send businesses fleeing the country . . . then why have we continued to have record GDP production in this country for the last thirty years?

Between 2000 and 2005, corporate taxes accounted for a mere 2.2% of the GDP! Why so little? Because of corporate tax shelters, tax breaks, and creative accounting methods, which actually reduce corporate taxes to down near an effective rate of 27%! (Source)

An interesting article, which discusses corporate tax shelters as one of the primary reasons for the decline in corporate tax receipts:

THE DECLINE OF CORPORATE INCOME TAX REVENUES


Despite our high tax rates, businesses find ways to avoid paying those taxes. I am thinking that closing some of these loopholes and going after shady accounting practices would probably make a bigger difference than raising the effective tax rates.

Interestingly, Obama's plan (for those who have actually bothered to look at it) does just that. He proposes eliminating tax shelters and loopholes that allow companies to hide their profits overseas and pay less tax dollars in America, and using the savings generated by that to furnish tax breaks to those businesses who invest in expanding or starting operations in the U.S.! Why would anyone be fearful of a plan like that?

If you are interested in reading an outline of Obama's plan, here it is:

Barack Obama's Comprehensive Tax Plan

 

[theWB]

I guess my point is that these are very complex issues that involve many factors, and trying to put up a one-liner answer like high taxes are driving our businesses overseas is not only factually incorrect, but it just ignores the larger complexity of a global manufacturing economy.

Rich you are 100% correct, but I thought this was a political thread and we were just suppose to throw out facts that only tell one side or half truths just to get our point across.

 

[Rich]

Rich you are 100% correct, but I thought this was a political thread and we were just suppose to throw out facts that only tell one side or half truths just to get our point across.

Good point. My bad. What was I thinking?

 

[theWB]

Good point. My bad. What was I thinking?

Actually Rich I was a bit disappointed, I thought for sure you were gonna come back with the fact that China has an average effective business tax rate of 46% which I believe is second highest in the world and we import a ton of their crap in our country. And I would have shot back about Ireland reducing their business tax rate( I believe somewhere around 11%) and drastically improving their economy, without mentioning that Canada has dropped theirs by a few points and nothings improved.

I truly believe there is noone on the planet that has all the answers when it comes to the economy, as much as we try to control and manipulate the economy you can't take all things into consideration and noone can predict how we as human beings will react to situations, because we are infinitly complex and ever changing and growing.

One thing for sure that has become very obvious over the last month, that we are truly much more of a global economy than ever before, therefore things are even more complex when it comes to trying to manipulate the economy, because so many things throughout the world are out of our control.

 

[Rich]

I truly believe there is noone on the planet that has all the answers when it comes to the economy, as much as we try to control and manipulate the economy you can't take all things into consideration and noone can predict how we as human beings will react to situations, because we are infinitly complex and ever changing and growing.

One thing for sure that has become very obvious over the last month, that we are truly much more of a global economy than ever before, therefore things are even more complex when it comes to trying to manipulate the economy, because so many things throughout the world are out of our control.

True. And economic theories are just that. They often work great on paper but fizzle out in the real world because of the unpredictability of the system. I have actually read a couple of studies about relative tax rates and their effects on capital investment. They were all somewhat inconclusive, showing some relationships, but not strong ones. One study showed that as corporate tax rates dropped, there was actually a corresponding drop in government public investment in infrastructure.

What really concerns me is that most of the intellectual analysis is brushed aside in favor of political buzzwords and scare tactics. If someone posted some studies that showed that Obama's proposed tax rates would result in a corresponding rate of x amount of businesses leaving the US and x amount of job losses, then I would say "OK, let's take a hard look at those facts and see if this is such a great idea."

But when people just scream "socialism," "leftist," "radical" and "jobs fleeing america" with no factual support, it gets old. McCain has relied on spreading fear of Obama as his main campaign tactic, and a lot of people have bought into it. But there just doesn't seem to be much fact behind the rhetoric from what I have seen.

And I have seen no real plan from McCain. No vision whatsoever for how he intends to lead America in this time of economic turmoil. The only insights I have into a McCain administration have come from some of the choices he has made, and honestly they are scary. Palin for Vice Presidency was an incredibly foolish choice. I don't think I even need to elaborate on that one. But here is an interesting quote:

"The issue of economics is not something I've understood as well as I should," McCain told the Boston Globe late last year. He said that in choosing a vice president he'd look for a person with economic experience to compensate for his own shortcomings.

Guess he forgot about that shortcoming when he picked Palin. He was more concerned about his shortcomings re: shoring up his religious conservative base.

And who did he pick as his campaign chairman and chief economic advisor? Phil Gramm! A lobbyist, special-interest shill and former congressman. But certainly not an economist. He was one of the ones who pushed the deregulation of banks and mortgage companies that helped bring us to the problems we are now experiencing. He was hired as a lobbyist for UBS, one of the banks knee-deep in the current crisis. He was finally fired by McCain when he chastised Americans for being a bunch of whiners and mocked the notion that we were entering a recession just a few short months ago. Yeah, this guy was McCain's CHIEF ECONOMIC ADVISOR! These choices give an insight into McCain's decision-making, and it is not pretty. And people are fearful of Obama? Give me a break.

I wish that people could set aside their personal biases and fears and recognize that Obama has shown the qualities of a true leader in the way that he has run his campaign, in the decisions that he has made along the way, and in the advisors he has chosen. These are the reasons people like Colin Powell, Warren Buffet, Robert Rubin, William Donaldson, and Arthur Levitt, among many others, are supporting and advising him.

 

[VanDaRo]

The only insights I have into a McCain administration have come from some of the choices he has made, and honestly they are scary. Palin for Vice Presidency was an incredibly foolish choice. I don't think I even need to elaborate on that one.

...But I sure wish you would. McCain isn't a dolt like the current Commander in Chief. I, nor anybody I know, has ever inferred that. But where you're absolutely right, Rich, is in questioning his off-the-cuff decision making on a number of issues. Palin, on the other hand, has revealed herself to be incredibly narrow-minded and intellectually lazy. She is in way, way over her head. If she wishes to effect an improvement in herself, I suggest that she read over the Constitution to get started -- something Bush failed to do too, I might add.

Although I would like this debate to be strictly about the future and all of the issues facing us, it would be irresponsible and unreasonable to overlook many of these "dolt-like" actions by the candidates ( I see that I have provided an opening for the right wing here to attack Obama's associations, but since they have so far not amounted to anything debate-worthy, I let my comment stand. ). And viewed in that light, it is fairly obvious that the Obama ticket has been on-message and retaining the high ground with near 100% consistency in this campaign. So if you vote based on the issues, the result is clearly for Obama. If you buy into the smears, rhetoric, and decades old failed thinking, then perhaps McCain is your man.

In fact, when I was debating these issues with a co-worker, he claimed that I thought GWB was a disaster simply because I didn't like his conservative views. But one doesn't really need to analyze him that deeply to dislike him. Stupid is as stupid does.... The same goes for Palin and SOME of JMs decisions. This friend of mine would have been better off [in our debate] if he had simply stated that he identified with the conservative viewpoint rather than trying to defend his candidates. Placing yourself on the defensive and on the low ground of the issues is no way to win a campaign or a water cooler debate.

~VDR