Politics Obama - Actually doing a good job?

rogue49 · May 1, 2012

Just the typical scare tactics.
These guys are just damn scarecrows.

Take a phrase...and repeat, repeat, repeat...
Got to hand it to the GOP, they do lockstep well.

Meanwhile the Dems are all running around like chickens with their heads cut off, like herding a bunch of cats.

But I get the feeling that Obama's got a whole big Hollywood presentation to spring on the nation for his campaign.
Unfortunately for the Dems, he's not sharing the wealth.

I'll be curious at the end, what will actually taken into consideration with the voters.
Are they going to sincerely evaluate the effort? Or are they just going to buy a line?

Indigo Kid · May 1, 2012

Just heard that Obama is in Afganistan and the big "announcement" is at 7:30 tonight. If he's finalizing the War there...this is great news.

I still feel & belive that he is doing a good job helping the U.S.A. My Vote will be for President Obama next November.

Baraka_Guru · May 1, 2012

Well, considering Obama took office when America was eating shit sandwiches.

He seems to have turned it into peanut butter sandwiches.

As much as people like to (and do) complain about having to eat peanut butter sandwiches in the best goddamned nation in the world, it is sure as hell better than eating shit sandwiches.

Bodkin van Horn · May 1, 2012

That's why you'll never catch me moving forward: there's too much cultural baggage associated with horizontal movement in the direction that I'm facing. I always kind of turn my body a bit, so I'm not actually going forward, but kind of off to the right a bit. Keeps me humble, reminds me to love my country.

ASU2003 · May 1, 2012

rogue49 said: ↑

Take a phrase...and repeat, repeat, repeat...
Got to hand it to the GOP, they do lockstep well.

Meanwhile the Dems are all running around like chickens with their heads cut off, like herding a bunch of cats.
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That is the problem with the Democrats (and Republicans for that matter), they have their sub-groups that don't care about the other groups. I'll admit that I do this too. Unions, gays, abortion, unemployed, and welfare issues don't concern me at all. I fall a little towards the democrats on them, but you won't see me marching in any protests. And those groups aren't exactly rallying around environmental causes which I support...

Republicans have the guns, God, and gold groups... But, they overlap a little more, and have a 24/7 TV and radio presence.

rogue49 · May 2, 2012

Ok, I've attempted to be fair minded and consider both sides.

But on this one, I'm going to call it straight-out on one side.
Obama made a good call on taking down Bin Laden. Period.

And this article, puts it in blunt terms.

Obama earned the right to tout Osama Bin Laden raid
By Richard A. Clarke
Published: Wednesday, May 2, 2012, 4:29 AM

Rather than joining the rest of the country in remembering with respect President Obama’s gutsy decision to launch the raid that killed Osama Bin Laden, some of his opponents have engaged in mock outrage that the administration dares to claim credit for the terrorist’s death.

President George W. Bush certainly touted his counterterrorism record, however faulty it may have been. Yet by criticizing this administration for what his predecessor and every other President has done (taking credit for his accomplishments), some are politicizing the issue of terrorism again.

The tactic being used today is familiar to those who have followed the activities of Karl Rove: Go directly after the other side’s strengths. Do not accept the truth or the obvious. Instead, make claims that cloud the issue. Some will believe you. Others will be confused. Your opponent’s strong point will be neutralized.

For example, in 2004, rather than just accepting the fact that Sen. John Kerry was a war hero, get people to say that he is not. Make such claims even if your own side is notoriously weak on the issue, even if your candidate worked hard not to go to Vietnam and spent months absent from his unit.

A variant of the tactic is also used when your own candidate has a glaring weakness: Insist that he has a record of great success in the field. For example, even though Bush held not a single National Security Council meeting on Al Qaeda until late on the actual day of 9/11, claim that he is the epitome of a President focused on fighting terrorism.

Should the Obama White House remain silent about its accomplishments in the field of counterterrorism, even though the Bush administration constantly promoted its less successful counterterrorism efforts?

The issue of fighting terrorism is still an important one for Americans. It is one of many valid issues on which voters should make their judgment about the future leadership of the United States.

What would be best for the country on the issue of counterterrorism is if we could somehow manage to return it to a nonpartisan matter. Unfortunately, this early in the election year, that seems unlikely. Therefore, voters should be advised to look carefully at claims that are made by both sides, and stick to the facts.

Ten facts that tell the true story:

First, the Bush administration moved assets to Iraq away from the search for Al Qaeda in Afghanistan and Pakistan.

Second, in 2006, the Bush administration closed the Bin Laden unit at the CIA in a reorganization.

Third, Bush changed his rhetoric from wanting Bin Laden “dead or alive” to publicly minimizing his importance. (Mitt Romney followed this pattern, saying in 2007, “It’s not worth moving heaven and earth spending billions of dollars just trying to catch one person.”)

Fourth, in 2007, candidate Obama said he would send troops into Pakistan to get Bin Laden, unilaterally if necessary, and was criticized by leading Republicans (Romney included) for saying so.

Fifth, after he took office, Obama directed an increased priority be given to getting Bin Laden.

Sixth, the President personally participated in repeated high-level meetings on his aggressive new strategy for getting Al Qaeda and its leaders in Pakistan.

Seventh, Obama ordered a dramatic increase in drone attacks in Pakistan, wiping out Al Qaeda leaders and making it almost impossible for Bin Laden’s senior commanders to operate there.

Eighth, the President rejected cabinet members’ advice and ordered the raid that killed Bin Laden to go ahead.

Ninth, it was the commander-in-chief who ordered that additional helicopters be made part of the operation, a decision that turned out to be crucial.

Tenth, Bin Laden is dead.

This is not to say that counterterrorism professionals weren’t hard at work in the Bush administration trying to do what they could to get Bin Laden. But it is to note that the elected and politically appointed officials of that administration did much less than they could have done to get Bin Laden both before 9/11 and after it.

Nor is it to say that the threat from Al Qaeda is over. Its franchises, particularly the one in Yemen, are still a significant danger, and the group there still wants to target the United States. Drones and Special Forces used by the Obama administration are stepping up the tempo of operations even further against Al Qaeda in Yemen.

Because the effort to eliminate Al Qaeda is not yet over, who our elected and politically appointed leaders are still matters. And so do the facts.

Clarke was a senior White House counterterrorism adviser in the Clinton and Bush administrations. He is the author of “Against All Enemies: Inside America’s War on Terror” and other books.

NEW YORK DAILY NEWS
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Baraka_Guru · May 2, 2012

ASU2003 said: ↑

That is the problem with the Democrats (and Republicans for that matter), they have their sub-groups that don't care about the other groups. I'll admit that I do this too. Unions, gays, abortion, unemployed, and welfare issues don't concern me at all. I fall a little towards the democrats on them, but you won't see me marching in any protests. And those groups aren't exactly rallying around environmental causes which I support...

Republicans have the guns, God, and gold groups... But, they overlap a little more, and have a 24/7 TV and radio presence.
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It seems to me that you're overlooking the fact that there are gay environmentalists, that there are unionized environmentalists, that there are pro-choice environmentalists, that there are unemployed environmentalists, that there are environmentalist welfare recipients. Just because you don't see marches such as"Gay for a Green Future" or "Free Choice for a Free Earth" it doesn't mean that there isn't any crossover between issues for people. (And let's face it: the unemployed and those on welfare likely have more immediate concerns than the environment.) The thing about protests and marches is that they tend to focus on one issue for simplicity and the concentrated thrust of a message.

It's my observation that liberals and socialists tend to have multiple issues of concern, rather than just one or even two.

rogue49 · May 3, 2012

Baraka_Guru said: ↑

It's my observation that liberals and socialists tend to have multiple issues of concern, rather than just one or even two.
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Actually, I've met gay conservatives...radical Right people who fight for animal rights, Left leaning demagogues that believe in the Death Penalty...and so on.
There are no absolutes...just trends.
And even more so, marketing and talking points put out by the leaders of each topic to portray a particular viewpoint or goal.

But as we see with Congress...our leaders don't really represent the population,
but more so their own biases, agendas, the party's goals, deals with other politicians and other invested interests.

The masses are a blur...their values are not clear and their opinions change. There is no real rule or category.
The leadership is just twisted ball of yarn.

That's one of the reasons I put this thread up...it's all about a person's perspective.
And you really don't know until after the fact...and who's interpreting it.

rogue49 · May 7, 2012

Now this was what I was seeing when I worked for the Executive Office/OMB last year.
Policy going out to reduce government, make it more efficient, save money...budget better...and more.

Sorry, this one I'm going to have to give to the Obama Administration.
They've really made some effort to make more efficient cost-effective government. More bang for our buck.
Not slash and burn...but truly thinking about the problem and encouraging all sectors to think where to trim but still be productive.

Government Getting Smaller in the U.S.
By FLOYD NORRIS
May 4, 2012

FOR the first time in 40 years, the government sector of the American economy has shrunk during the first three years of a presidential administration.

Spending by the federal government, adjusted for inflation, has risen at a slow rate under President Obama. But that increase has been more than offset by a fall in spending by state and local governments, which have been squeezed by weak tax receipts.

In the first quarter of this year, the real gross domestic product for the government — including state and local governments as well as federal — was 2 percent lower than it was three years earlier, when Barack Obama took office in early 2009.

The last time the government actually got smaller over the first three years of a presidential term was when Richard M. Nixon was president. That decrease was largely because of declining spending on the Vietnam War.

The accompanying charts show the gains in real G.D.P. for the first three years of each presidential administration since 1989. They also show how different parts of government have grown.

Many things other than presidential policies contribute to economic growth, of course, including whether a president has the good or bad fortune to enter office when the economy is already moving in a certain direction.

Bill Clinton took office when the economy was weak and starting to get better, while George W. Bush entered the White House just as a recession was getting under way. The most recent recession officially ended in June 2009, a few months after Mr. Obama took office, but the recovery has been slow.

Of the administrations shown, overall growth in Mr. Obama’s first three years has been the slowest. But that is largely because government spending did not accelerate as it normally does when the private sector is weak. The private sector grew faster in the first three years of the Obama administration than it did in three of the previous five administrations — the exception being Bill Clinton’s administrations, when private sector growth was more rapid. In both of George W. Bush’s terms as well as in the first three years of the George H. W. Bush administration, though, the private sector grew more slowly.

Much of the variation in government spending trends can be attributed to military spending. Adjusted for inflation, it has grown at a slow pace under President Obama despite declines in the costs of the Iraq and Afghanistan wars. Nonmilitary spending has risen at about the same pace as it did during George W. Bush’s second administration, and much more slowly than during his first.

State and local government spending on investments — new schools and highways, for example — has often been subject to abrupt cutbacks in response to a weak economy. But the continued decline in operating expenditures is new. In the past, saving money through such means as laying off teachers has generally been avoided, but the number of education employees at the state and local level has been lower in each of the last three autumns than it was a year earlier.

Floyd Norris comments on finance and the economy at nytimes.com/economix.
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rogue49 · May 13, 2012

An interesting perspective, Obama compared to Reagan...

Why The Obama Recovery Has Been Much More Impressive Than Reagan's
Joe Weisenthal | Jan. 30, 2012, 11:28 AM

The 2012 election will revolve around the economy, and somehow Obama will have to make the case that he should be re-elected with GDP growing below historical trend, and unemployment above 8 percent.

James Pethokoukis of the American Enterprise Institute has been doing a lot of work comparing the Obama recovery to the Reagan recovery, pointing out how much more robust the latter was.

In a new post, he takes aim at the suggestion that comparing the two recoveries is somehow unfair because Obama had to deal with the aftermath of the housing bust, whereas Reagan didn't.

Pethokoukis writes:

The reality: Housing is usually a key contributor to GDP growth during the early stages of a recovery. As a 2011 St. Louis Fed analysis points out, “Somewhat surprisingly, the housing component of GDP (more formally known as residential investment) tends to be a solid contributor to GDP growth during a recovery. Historically, residential investment has contributed only about 5 percent of GDP—a small share considering the consumption component is close to 70 percent. Nevertheless … it can contribute substantially to the GDP growth rate for short periods of time.”

According to Commerce Department data, residential investment added 1.33 percentage points to GDP in 1983, 0.64 in 1984. By contrast, residential investment subtracted 0.11 percentage point in 2010 and 0.03 in 2011. (See chart below.)

But here’s the thing: Subtract the housing rebound from the Reagan Recovery and GDP still grows twice as fast as during the Obama Recovery. For example, the economy grew 7.2 percent in the second full year of the Reagan Recovery. Without residential investment, it would have grown 6.6 percent vs. 1.7 percent growth in 2011, Obama’ s second full year of recovery. Score one for the Gipper … and for supply-side/Schumpeterian economics over demand-side/Keynesian economics.

The problem is that Pethokoukis is knocking over a straw man here. He's defining housing bust purely in terms of housing construction, while ignoring the real elephant in the room: The collapse in home prices, and the knock-on effects it has had on the economy. Almost nobody, when they're talking about the housing crisis, is talking about it purely in terms of residential investment (though that is one sub-area).

Lest anyone be confused about what happened, here's a look at the national House Price Index going back to 1975. As you can see, home prices didn't even notice the two early '80s recessions. They collapsed massively, however, starting late in the Bush administration.

To put it bluntly, this is A Big Deal, and a dynamic not captured at all merely looking at the residential construction's share of GDP.

The unprecedented (in post-War America) housing bust also corresponds with another thing that made this recession unique: the credit bust.

Here's a look at Consumer Credit going back to 1945. Never had the U.S. seen a meaningful decline in this measure until this current malaise.

The point here, again, is that to imagine that the key difference between the Obama recovery and the Reagan recovery is the falloff in housing construction is ridiculously narrow.

It's also worth pointing out research which shows a direct connection between household debt and deleveraging and unemployment. A study by Professors Amir Sufi and Atif Mian, which we wrote about here, uses Mastercard spending data to look specifically at what happened to unemployment in areas characterized by high home prices and high household debt before the crisis. Suffice to say, those areas got hit harder.

We also had one other thing: A financial crisis. Hopefully we don't need to put up any charts or anything to remind everyone that much of the financial system seized up in late 2008, and that we lost multiple major banks, and so on. There are at least some economists who argue that post-financial crisis economies experience unusually slow growth for years and years.

So at least right off the bat, we can easily identify some huge differences between the conditions that Obama inherited and what Reagan inherited.

But we're just getting started ...

The first, obvious, point is that soon after Reagan entered office THE U.S. WENT INTO A RECESSION!

For some reason, which we can't figure out, Pethokoukis thinks Reagan gets to start at 1983.

He writes:

Ronald Reagan inherited a Long Recession. The economy declined 0.3 percent in 1980, grew at a subpar 2.5 percent in 1981, and then plunged 1.9 percent in 1982. The lengthy downturn was really the culmination of more than a decade of bad economic policy. But the Reagan Recovery was stunning. GDP rose 4.5 percent in 1983 and 7.2 percent in 1984. It was Morning in America, and Reagan won reelection by a landslide.

If you really want an apples-to-apples comparison, it's hard to fathom why Reagan doesn't have to answer for a recession happening so soon on his watch, and why he only gets measured on those two years. What's more, as you can see in the chart above, the 1984-1988 period was pretty average, so we're really just talking about two years of really impressive morning-in-America growth.

Another thing about Reagan was that he was a deficit-lover.

Reagan presided over the largest (still) one-year annual jump in the size of the national debt. (And PS: that just happened to be right after the recession, when the economy started growing like crazy as Pethokoukis notes)

If you want to look just at annual growth of government spending, Reagan clearly had more sustained growth than Obama has had. Note that Reagan never once had a period of shrinking government spending.

Let's forget government spending though. We've already established how much Reagan loved it.

What about private investment? After all, that's the sine qua non of a strong economy, as supply siders like to argue.

Here's a look at annualized change of private spending.

Since the Recession ended, Obama has maintained growth in private investment. Reagan? He had several negative periods in there, and overall a lot more volatility on this measure. And as Pethokoukis even noted above, Obama has had to contend with weak residential investment, yet private investment is still maintaining nice growth.

We could of course go on, and point to several other factors in Obama's favor, such as the fact that tax rates had already been lowered quite a bit heading into his presidency, taking away one easy form of stimulus, or the fact that a major trading partner, Europe, has been in crisis virtually the whole time of Obama's Presidency, or the fact that Obama faced a Congress who threatened to cause the U.S. to default, or the fact that interest rates were ultra-low already, again taking away one form of stimulus from Obama.

But you get the gist: The conditions behind the Great Recession were far worse than anything Reagan inherited, and Obama has pulled off a recovery with less of a sustained growth in Federal Government spending.

It doesn't look good for The Gipper.

Business Insider 2012
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And the cool thing, if anything...it's gotten better since January.

rogue49 · May 17, 2012

OK, here's a question...

Should Obama be blamed for the inaction, incompetence & uncooperative nature of Congress???
Even the president has his authorative & organizational limits.

If they don't do anything or get it right...how does he work around it???
They make the laws, give the funds

Obama to Pressure Congress on Jobs, Economic Proposals
By Roger Runningen and James Rowley - May 16, 2012

President Barack Obama is pressuring Congress again to act on a set of proposals to help small businesses amid signs that Republican leaders are gearing up for an election-year standoff over the federal budget.

House Speaker John Boehner of Ohio, Senate Democratic Leader Harry Reid of Nevada, House Democratic Leader Nancy Pelosi of California and Senate Republican Leader Mitch McConnell of Kentucky declined to comment after leaving a White House lunch with Obama. The White House set the meeting to talk about the legislative agenda between now and the November elections that will decide which party controls the White House and Congress.

Obama is promoting his five-point “to-do” list for Congress, which includes tax incentives for small businesses to boost hiring. Before going into the meeting, Boehner derided Obama’s proposals, saying the president is “playing small ball” while ignoring “big looming problems facing our country.”

In his bid for re-election, Obama is seeking to make the case that congressional Republicans are blocking initiatives that would promote job creation and economic growth while offering a rehash of proposals on taxes and regulation that haven’t worked in the past. He has accused presumed Republican presidential nominee Mitt Romney of being a “rubber stamp” for the Republican majority in the House.

Boehner yesterday signaled that Republicans in the chamber are ready to renew a budget standoff with Obama, saying any future increase in the nation’s debt limit be matched by at least as much in spending cuts.

“Allowing the debt ceiling to go up without addressing our fiscal challenge would be the most irresponsible thing that I could do,” Boehner said in a speech yesterday before a conference in Washington sponsored by the Peter G. Peterson Foundation.

Representative Chris Van Hollen of Maryland, the top Democrat on the House Budget Committee, accused Boehner of making a “reckless” threat to keep the U.S. from paying its bills.

Boehner said today he is “not threatening default.” The Ohio Republican said he intended to press Obama to to lay out his plans “to tackle our looming debt crisis” and for preventing taxes from rising on Jan. 1.

White House press secretary Jay Carney said Obama urged the congressional leaders to avoid another “self-inflicted” fiscal crisis over the debt ceiling.

A political battle over raising the debt limit last year took the U.S. to the brink of default. After months of negotiations on federal spending, Obama signed compromise legislation to lift the debt ceiling on Aug. 2, the day the Treasury had warned the nation’s borrowing authority would expire.

The White House and Congress face a crush of tax and spending decisions at the end of this year. Income tax cuts first enacted under President George W. Bush will expire, as will a temporary reduction in the Social Security payroll tax. More than $1 trillion in automatic spending cuts are set to begin taking effect, extended unemployment benefits will run out and the government will again brush up against its $16.394 trillion legal cap on borrowing.

In a speech yesterday in Des Moines, Iowa, Romney accused Obama of contributing to a mounting deficit that he said stifles economic recovery and “threatens what it means to be an American.”

While Romney and congressional Republicans are attacking Obama on government spending and the nation’s debt, Yields on the government’s benchmark 10-year notes rose one basis point, or 0.01 percentage point, to 1.78 percent at 2:02 p.m. New York time, according to Bloomberg Bond Trader prices. Rates are about one-quarter of the 50-year annual average of 6.49 percent.

Through last week, investors had offered $3.18 for every dollar of notes and bonds auctioned this year, the most since the government began releasing the data in 1992.

The total federal debt is almost $15.7 trillion, up from $10.6 trillion on Jan. 20, 2009, when Obama was inaugurated, according to the Treasury Department.

At an event this morning, Obama was joined by Small Business Administrator Karen Mills to highlight an administration proposal that would offer a 10 percent income tax credit for small business firms that create new jobs or increase wages in 2012. It also would extend 100 percent expensing in 2012.

The five-point package also includes offering companies a tax credit for moving their manufacturing back to the U.S., making it easier for homeowners to refinance and renewing tax credits for clean energy development and creating a Veterans Job Corps to help post-Sept. 11 veterans find work as police officers and firefighters.

®2012 BLOOMBERG
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Joniemack · May 17, 2012

Actually, he probably borrowed it from MSNBC's slogan "Lean Forward" or at least, that the first thing that came to mind when I first saw it.

Baraka_Guru · May 17, 2012

Joniemack said: ↑

Actually, he probably borrowed it from MSNBC's slogan "Lean Forward" or at least, that the first thing that came to mind when I first saw it.
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Look, this thread is in the forum "Tilted Forward." You're going to be hard pressed to convince all us Maoists that it's anything other than what we know it is.

Aceventura · May 17, 2012

A picture (graph) is worth a thousand words.

Economic News and Policy - Financial & Stock Market News - IBD - Investors.com

From today's IBD, or the most despised publication regularly cited on TFP.

The top graph illustrates the relationship between investing (creating real wealth) and the increasing wealth disparity. Trickle down/supply side economics works.

Baraka_Guru · May 17, 2012

Aceventura said: ↑

The top graph illustrates the relationship between investing (creating real wealth) and the increasing wealth disparity. Trickle down/supply side economics works.
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That's a huge leap to that conclusion. Are you the first to make it? Do you deserve a Nobel for finally proving that trickle-down economics works?

Let's look at it another way: Long-term GDP growth averages ~3%. Real investment growth averages ~3.5% (which includes IT). So how do we explain wealth disparity? Have we talked about taxes yet? Income growth among top earners vs. the rest?

Household and government debt increased. Well, that's the difference between being able to save and invest vs. borrowing and spending to "keep up." Have we talked about taxes yet? Income growth among top earners vs. the rest?

I'd like to see you "show your work." How do these simple graphs prove that trickle-down economics works?

I don't quite see the connection. You'll have to fill in some gaps.

Also, in the meantime, you may want to check out this controversial video that TED finally released due to pressure:

Nick Hanauer, self-described "super-rich" entrepreneur, on how the middle-class consumers—not the super-rich—are the real job creators.

rogue49 · May 17, 2012

FTFA

But over the intermediate term, one message for policymakers is clear: Don't take investment for granted. That's an important consideration when, as the report from Fiscal Commission co-chairmen Alan Simpson and Erskine Bowles stated, a high statutory corporate tax rate "hurts America's ability to compete."

The other main message is that in a highly competitive world, the U.S. needs to do more to boost the skills of its workforce.
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I agree on both points.
Problem is in the US, we have not only Federal taxes, but State, County, City, Income and Sales tax too.
In this case, we are talking most about Federal...which is the only thing the President can "request" on. (Congress makes the rules)

This is 2005 under the GW Bush administration, before Obama took over.

And Heritage Foundation rates the US at 26.9 for it's 2012 taxes as a % of GDP, about half way down the chart. (Denmark is 2nd at 49.3) Wiki
Again, in comparison...just after the GW Bush Adminstration, at the beginning of Obama's

Now, you can see...that US corporate tax rate have not changed since 1993, when Clinton was inaugurated.

I'd say Congress has more to answer for than any President. (and that's Dem or GOP for either branch)

If you can get lower taxes passed, great...but we have to figure out how to pay for it or we'll increase the debt.
And if you'd like to invest more into Education, go for it.

But it doesn't look like so far either Obama or Romney have a good plan...

Where President Obama and Mitt Romney stand on lowering small business taxes
By Associated Press, Published: May 15 2012

The Associated Press is looking at the positions that President Barack Obama and Republican presidential candidate Mitt Romney have taken on small business issues.

BACKGROUND: Many small business advocates say the current tax structure favors so-called C corporations, such as General Motors Co., Microsoft Corp. and other large companies, which are taxed at the corporate rate on the money they earn. But most small companies aren’t taxed directly. Under federal tax law, their income is “passed through” to their owners, who report it on their personal 1040 tax returns. That results in many sole proprietors, partners and owners of so-called S corporations paying higher taxes on their business earnings because individual tax rates are higher than corporate rates. Under the Obama Administration’s proposed budget, the corporate tax rate would drop to 28 percent from its current 35 percent; manufacturers would pay 25 percent. But households making more than $250,000 a year would face a tax rate of as much as 39.6 percent — and many small business owners and their spouses have income above that level. Romney is proposing a 25 percent corporate tax rate and a top individual rate of 28 percent.

Here’s what the Obama and Romney campaign staffs have to say about where the candidates stand on taxes:

THE QUESTION: You are proposing to cut the corporate tax rate. How would you create parity for sole proprietors, partners and S corporation owners who are often subject to higher tax rates because they report income on their personal tax returns?

ROMNEY’S POSITION: “As president, Gov. Romney will make a permanent, across-the-board 20 percent cut in marginal rates. This will bring the top individual rate down from 35 to 28 percent. With 54 percent of private sector workers employed outside of corporations, individual rates define the incentives for job-creating businesses. This bold stroke reduces the tax on the next dollar of income earned for all individual taxpayers - especially small businesses.”

FACT CHECK ROMNEY: C corporations would still get a more favorable tax rate under Romney’s plan than many small business owners— 25 percent vs. 28 percent.

OBAMA’S POSITION: “The President has put forward a framework for corporate tax reform that is specifically designed to simplify and cut taxes for America’s small business; he cut taxes for small businesses 18 times since he took office. Indeed, the President’s plan for corporate tax reform ensures that small businesses, including small pass-throughs, receive a net tax cut. As part of this plan, the President proposes allowing small business to expense up to $1 million in investments, and allowing cash accounting on businesses with up to $10 million in gross receipts. In the Budget, the President proposed providing tax cuts for small businesses that increase their hiring or make new investments, doubling the deduction for startup costs, and reforming and expanding the health insurance tax credit for small businesses.”

FACT CHECK OBAMA: While the campaign says Obama “cut taxes for small businesses 18 times,” some of the cuts were temporary. One was a $500,000 limit on deductions for equipment purchases; the maximum deduction was lowered to $125,000 this year. His latest proposal does provide for an increase in that deduction, to $1 million. But under the plan, C corporations would still get a more favorable tax rate than many small businesses.

ANALYSIS:

The National Small Business Association, a group that lobbies for small businesses on federal issues, says Romney’s proposed cut in marginal tax rates “will, in fact, help a number of small businesses, the overwhelming majority of which (83 percent) are structured as pass-through entities.” But the NSBA also noted that Romney’s plans could result in some pass-through business owners paying a higher rate than corporations. Looking at Obama’s proposal, the NSBA repeated its position that “corporate tax reform cannot be passed without some kind of individual tax reform.” It noted positive points such as: the increase in the deduction for equipment purchases; the doubling of the $5,000 deduction for startup costs and a provision allowing cash accounting for some businesses. But it said that the President’s proposal “fails to ensure parity between small and large business, which would only exacerbate the competitive disadvantages small businesses face.”

“Both candidates are emphasizing the importance of entrepreneurs because startups are critical to the recovery and long-run health of the US economy,” said Robert Litan, an economist who studies entrepreneurship and public policy at the Brookings Institution and the Ewing Marion Kauffman Foundation. “It is difficult to compare the net impact of each plan because they differ in so many respects. Also, given where taxes are - far below prohibitive levels - it is not clear how much of a differential impact the changes offered by either candidate would be on new business formation and growth, except to say that, on balance, each plan would help.”
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redux · May 17, 2012

Bush is still drinking the supply side Kool-Aid as well and coming out with a book this summer on his "strategies for economic growth"

...despite the fact that under his watch, growth in investment, GDP, and employment (monthly job growth) were the lowest of our lifetime, and household income growth was negative for the first cycle since tracking began in 1967.

... and that "success" all for the low price of well over $1 trillion added to the US debt (and another $3-4 trillion more to come to make those tax cuts for the top one percent permanent).

Yep...pass the Kool-Aid!

Baraka_Guru · May 17, 2012

Oh, hey, and corporate profits are higher than ever!

Aceventura · May 17, 2012

Baraka_Guru said: ↑

That's a huge leap to that conclusion. Are you the first to make it? Do you deserve a Nobel for finally proving that trickle-down economics works?

Let's look at it another way: Long-term GDP growth averages ~3%. Real investment growth averages ~3.5% (which includes IT). So how do we explain wealth disparity?
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First, we should measure living standards rather than just income. Income measures can be miss leading, as pointed out in the past. For example if Family earns $250,000 per year and pays $300,000 to send three children through college over 6 years - there income was $1.5 million during that period. If family B earning 150,000 per year, or $900,000 in the 6 years got free tuition for their three children valued at $300,000 - there is a 40% disparity in income but the disparity in living standards is 25%. It is clear, adjustments have to be made for goods and services that are subsidized.

Have we talked about taxes yet? Income growth among top earners vs. the rest?
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Not yet. Do we agree on the above point?

Baraka_Guru · May 17, 2012

Aceventura said: ↑

First, we should measure living standards rather than just income. Income measures can be miss leading, as pointed out in the past. For example if Family earns $250,000 per year and pays $300,000 to send three children through college over 6 years - there income was $1.5 million during that period. If family B earning 150,000 per year, or $900,000 in the 6 years got free tuition for their three children valued at $300,000 - there is a 40% disparity in income but the disparity in living standards is 25%. It is clear, adjustments have to be made for goods and services that are subsidized.
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Where are these examples from? Are these actual case studies? Can we not simply look at cost of living/inflation numbers?

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