Obama & Taxes

By Nitya

Mar 28, 2008 10:48am

On CNBC’s "Closing Bell" yesterday, Sen. Barack Obama, D-Illinois, said he wanted to raise the capital gains tax rate.

Watch HERE

How much would he raise them?

He didn’t say.

More than 15%, less than 28%.

"I haven’t given a firm number," he said. "Here’s my belief, that we can’t go back to some of the, you know, confiscatory rates that existed in the past that distorted sound economics. And I certainly would not go above what existed under Bill Clinton, which was the 28 percent…. My guess would be it would be significantly lower than that. I think that we can have a capital gains rate that is higher than 15 percent."

Obama said "when I talk to people like Warren Buffet or others and I ask them, you know, what’s — how much of a difference is it going to be if it’s 20 or 25 percent, they say, look, if it’s within that range then it’s not going to distort, I think, economic decision making."

When it was pointed out that 100 million Americans own stocks today, and they are hardly all Warren Buffets, Obama suggested "you could structure something in which people with certain incomes were exempted from this increase and it would stay at 15. The broader principle that I’m interested in is just making sure that we’ve got a tax code that is fair for all Americans."

What other taxes would Obama raise?

* The Top Marginal Tax Rate

Obama said he wants to repeal the Bush tax cuts and return to a top marginal rate of 39 percent.

CNBC’s Maria Bartiromo asked Obama why he would raise taxes at all during a period of economic trouble.

"Well, look, there’s no doubt that anything I do is going to be premised on what the economic situation is when I take office," he said. "I’m not going to making these decisions based on ideology. I’m not a dogmatist. I know that some, you know, my opponents to the right would like to paint me as this wooly-eyed, you know, liberal or wild-eyed — "

"You’re not a liberal?" Bartiromo asked.

Obama didn’t answer. "My attitude is that I believe in the market, I believe in entrepreneurship, I believe in opportunity, I believe in capitalism and I want to do what works," he said. "But what I want to make sure of is it works for all America and not just a small sliver of America."

* Social Security Taxes.  “If we kept the payroll tax rate exactly the same but applied it to all earnings and not just the first $97,500, we could virtually eliminate the entire Social Security shortfall," Obama wrote in the Quad City Times last September. (Obama has also discussed the possibility of a donut hole, so that the increase would only hit those "making over $200,000 to $250,000" who "can afford to pay a little more in payroll tax.")

* A "Dirty Energy" Tax. “What we ought to tax is dirty energy, like coal and, to a lesser extent, natural gas," he told the San Antonio Express-News last month.

He also has discussed taxes on dividends, carried interests, closing corporate loopholes, and returning to the original inheritance tax rate.

And he endorsed New York Mayor Mike Bloomberg’s proposal to charge drivers a fee to commute through the busiest parts of Manhattan. 

What taxes would he cut?

* He said he wants to cut taxes for those making $75,000 a year or less, through an offset on the payroll tax worth as much as $1,000 for a family.

* "Senior citizens who are bringing in less than $50,000 a year in income, I don’t want them to have to pay income tax on their Social Security," he told CNBC

* He wants an additional 10 percent mortgage interest credit, for those who currently don’t itemize.

* He has proposed a "Making Work Pay" tax credit of up to $500 per person, or $1,000 per working family.

Sen. Clinton also some has tax proposals which I’ll look at in a later post.

- jpt

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