The Candidates
This is pretty unbelievable:
“What I believe is the starting place is to go back to the Clinton levels,” Mr. Edwards told reporters after addressing the 2,000 delegates to California’s state Democratic Party convention.
Edwards explained that raising taxes “back to their levels under the Clinton administration is a floor, not a ceiling, and he would consider even higher tax increases.”
Just as a reminder to everyone… here’s what the tax brackets looked like before Clinton got his hands on them:
15% - $0 to $35,800
28% - $35,800 to $86,500
31% - above $86,500
Oh, to return to the simpler times of tax brackets… *sigh* Here’s Clinton’s idea of good tax rates:
15% - $0 to $36,900
28% - $36,900 to $89,150
31% - $89,150 to $140,000
36% - $140,000 to $250,000
39.6% - above $250,000
And Edwards wants rates even higher than those! And finally, here’s what we’ve managed to do with the brackets currently:
10% - $0 to $15,650
15% - $15,650 to $63,700
25% - $63,700 to $128,500
28% - $128,500 to $195,850
33% - $195,850 to $349,700
35% - above $349,700
You can see how devastating going back to the Clinton tax brackets would be. For example, a family making $40 grand a year (pretty close to national average) would fall in the 15% bracket currently, but the 28% bracket under Edwards’ plan! Small businesses that are in the 33% bracket currently would fall into the 39.6% bracket under an Edwards administration.
Of course, I’ve gotta give credit to John Edwards for being up front with his plans and letting everyone know what he intends to do. We know all the Democrats (with the possible exception of Bill Richardson) would raise our taxes but most of them just lie about it. So kudos to Edwards for being honest. And for showing us exactly why we cannot elect him President.
April 30th, 2007 at 7:20 pm
[...] post by HeavyM and software by Elliott [...]
April 30th, 2007 at 7:20 pm
This will be displaying my historical ignorance, but I’ve got to ask.
What previous presidential candidates have made nearly doubling taxes on the lower and middle class part of their campaign platform?
April 30th, 2007 at 7:25 pm
Walter Mondale
April 30th, 2007 at 7:25 pm
I think..
April 30th, 2007 at 7:29 pm
Well,
Edwards is being realistic here. How else will America be able to afford his haircuts when he’s in office unless we raise taxes.
April 30th, 2007 at 7:33 pm
This exactly why Edwards’ “electability” aura, is going to dissipate before the general election. We’re seeing buyer’s remorse here. Voters no longer like Bush, but Kerry hasn’t done anything to endear himself to voters since then, so they displace their buyer’s remorse onto Edwards. It won’t last. He’s too colossally ignorant, obscenely liberal, and generally inexperienced to maintain any sort of lingering positive feelings beyond the end of the primaries. Edwards is perhaps more electable then Hillary, but not by much. And he’s likely to perform a least a point or two behind Obama.
April 30th, 2007 at 7:48 pm
I’m not sure if Mondale wanted to double the tax rates, but anytime the Democrats want to go back to the Mondale strategy of campaigning is fine by me. First they say the economy is bad (which it isn’t) and then they want to tax us back to fiscal solvency??? I don’t understand, from a strictly campaigning point of view, why any candidate thinks telling voters he’s going to raise taxes by any amount is a good idea. Just makes no sense to me.
April 30th, 2007 at 7:53 pm
Of course, the Clinton tax rates raised sufficient revenue to balance the federal budget while this country experienced its greatest period of economic growth, and the lower income groups experienced their first increase in income (in inflation-adjusted dollars) in a long time.
The Bush tax rates have led to massive budget deficits, as did the Reagan tax cuts.
Oh, btw - for those speaking of “doubling the tax rates”, I would suggest contemplating what the word “marginal rate” means, and running a few numbers before you really make fools of yourselves.
There is no such thing as a tax cut when the federal government runs a deficit.
It is only a tax deferral - having your children pay the debt that you are unwilling to.
April 30th, 2007 at 7:53 pm
I can’t remember Mondale’s exact rates. I just remember the Saturday Night Live skit.
April 30th, 2007 at 7:56 pm
Tano, Tano, Tano…
The Bush tax rates have led to massive budget deficits, as did the Reagan tax cuts.
No, actually, the Reagan and Bush tax cuts led to record high government income. The out of control spending by Congress, and the unwillingness to veto spending bills, is what led to massive budget deficits.
This country used to be funded on a 7% tax bracket as the highest income bracket, and now we’re supposed to believe that a bottom bracket of 10% is too low? C’mon…
April 30th, 2007 at 8:41 pm
Heavy.
Sorry, but that is just silly. Whether you consider the spending excessive or not is not the issue. The spending is the result of what legislators and the president (of both parties) approved, in line with their calculations of what the people want. Tax rates should be sufficient to pay for what the people want in terms of spending.
To do otherwise is not to somehow undo the spending - it merely places the burden on the next generation who must pay off the accumulated debt, with interest.
We have an enormously larger, and more complex society which expands the scope of governmental responsibility. You may wish to go back to the 18th century, but it aint gonna happen.
The Bush and Reagan administrations are responsible for massive debt which must be paid off. No amount of sophistry will erase that fact. The Clinton administration led us to a balanced budget - even a small surplus for a year or two.
The issue is simple. Do we pay our own way, or require our children to do it?
April 30th, 2007 at 8:48 pm
It’s also worth noting that the budget deficit as a percentage of GDP (the most relevant measure) is smaller than the deficit that Reagan inherited (ie pre-tax cut), and is among the smallest currently being run be advanced industrial economies. This notwithstanding the fact that we’re fighting two wars, added a massive new entitlement program, etc. (as Heavy M points out). Without those, we’d probably be running a pretty hefty surplus. Hell, without the GWOT, the budget deficit would be a paltry $30B, a rounding error in a budget of the current size.
“There is no such thing as a tax cut when the federal government runs a deficit.
It is only a tax deferral - having your children pay the debt that you are unwilling to.”
Well, yes, but as any financial planner will tell you, deferring taxes ain’t a bad thing, assuming you use the money for things that will make you richer in the future. Personally I’m glad that my grandparents and (my friends’) great-great-great grandparents engaged in massive deficit spending to win, say, WWII or the Civil War, and quite frankly I’m glad that we’re spending it for the wars in Iraq and Afghanistan (of course, I’d rather we not have started the Iraq War, but that’s another debate entirely.
But Tano is correct about the difference between marginal tax rates and actual tax burden. Still, I’d like to hear exactly how high that populist thug (Edwards, not Tano) wants to take tax rates.
April 30th, 2007 at 8:50 pm
“Tax rates should be sufficient to pay for what the people want in terms of spending.”
Why? Why shouldn’t spending be tied to the tax rates that people find acceptable? I’m not saying you have to reach that conclusion, but its certainly not “silly.”
April 30th, 2007 at 9:10 pm
France has a debt 200% of it’s GDP. Ours is around 75%. As Sean points out, practically every major modern nation has a debt as high, if not higher, as a percentage of GDP. I agree that our budget deficit is a huge problem. And I agree that we’re going to pay for it in later generations. But to pretend that we’re committing some sort of unprecedented travesty, is intellectually dishonest.
April 30th, 2007 at 10:45 pm
Tano…
The deficit is caused by the drunken Republicans’ high spending…which is partly why they are no longer the majority party. Not lower tax rate.
Low taxes are great if spending also decreases.
April 30th, 2007 at 11:10 pm
^ make that only great if spending also decreases. Otherwise, you’re just hiding taxes, while still technically increasing them.
May 1st, 2007 at 12:25 pm
Tano: Oh, btw - for those speaking of “doubling the tax rates”, I would suggest contemplating what the word “marginal rate” means, and running a few numbers before you really make fools of yourselves.
What would we do without you, Tano? Of course you’re right. I pay more in FICA and entitlement programs than I do in Federal taxes. But the spirit of what I’m saying is the same…not many candidates make huge tax hikes a central platform to their campaign.
And, as usual, I find myself in agreement with Nusrat and Tano with regards to deficits being nothing more than hidden taxes. Of course the ideal solution is cutting taxes AND spending. Cutting taxes while suffering ballooning deficits (see the current Congress and Rudy’s previous Mayorship) is not fiscal conservatism.
May 1st, 2007 at 12:52 pm
“I find myself in agreement with Nusrat and Tano with regards to deficits being nothing more than hidden taxes.”
That is not — and should not be — the end of the inquiry. The question is what you are buying with the deficits.
To use an everyday example, my student loans for law school totalled over $100K. In a static world, this would have been a suicidal idea , given my $25,000 a year income at the time I applied to law school, which decreased to near-zero while I was in law school. But we don’t live in a static world, and so the “spending cuts” that I’ve had to “endure” as a result are more than made up for by the increased income that debt has bought me.
Similarly, all other things being equal, I’d prefer to see spending cuts to match the tax increases. But again it doesn’t automatically follow that if your spending exceeds your income, you should either forego your spending or increase your income, unless you believe means for increasing your income are painless. In the instant case, the deficits we ran in the early-to-mid 00s were worth it, to my mind, because it (a) ensured that the recession that we had in early ‘01 was one of the mildest on record and (2) helped pay for the war on terror.
The national debt has never been below $33,000 (in the 1830s) — we still carry some debt from the American Revolution (refinanced several times, of course). The major run-ups in debt have largely come as the result of wars — the Civil War, WWI, WWII, the Cold War, and now, the GWOT. Those are significant investments in future generations, who will both benefit from that debt and be better able to pay it (just as most of our houses are now worth more than the entire national debt that the government couldn’t pay off in the 1830s. That’s why I don’t get too worked up about the deficit — except for the part that’s due to new transfer payments (like the Prescription Drug Benefit).
May 1st, 2007 at 1:01 pm
Maybe he want to pay back some of Bush’s debts, theres a lot of it..
And maybe (I am just guessing here), he want to rise the public welfare levels..
May 1st, 2007 at 4:40 pm
Sean,
I happen to agree with you that deficit spending is not ALWAYS a bad idea. WWII is a good example. Your student loans are another good example (especially considering you pay 0% interest while in school).
However, there is nothing I can see which justifies the lack of budgetary discipline in the last few years, especially considering the hundreds of billions whichcould be trimmed from budgets by cutting pork and innefficiency.
May 1st, 2007 at 10:04 pm
murphy,
Don’t get me wrong, I would love to enact the spending cuts needed to balance the budget. If I were king, I could do it with my eyes closed, and the country would hardly know the difference. And some type of spending cuts were needed — Bush’s tax cuts in their totality were worth about $200 billion a year (not just the ones for the ‘rich’); given the $400 billion deficit we had a few years ago it wouldn’t have come close to being in balance without spending cuts.
Point is, with spending cuts not an option, I’d rather take the deficit and keep the tax cuts and the solid economy, rather than balance the budget but ensure slow growth.
Unfortunately, btw, you only pay 0% on the first $8500 of loans for each year, which was about 1/4 of my annual loan burden. Just now paying off the interest that accumulated in law school and my clerkship (5 years later).