Obama: Recession Could Delay Rescinding Bush Tax Cuts

WASHINGTON — Democrat Barack Obama says he would delay rescinding President Bush's tax cuts on wealthy Americans if he becomes the next president and the economy is in a recession, suggesting such an increase would further hurt the economy.

Nevertheless, Obama has no plans to extend the Bush tax cuts beyond their expiration date, as Republican John McCain advocates. Instead, Obama wants to push for his promised tax cuts for the middle class, he said in a broadcast interview aired Sunday.

"Even if we're still in a recession, I'm going to go through with my tax cuts," Obama said. "That's my priority."

What about increasing taxes on the wealthy?

"I think we've got to take a look and see where the economy is. I mean, the economy is weak right now," Obama said on "This Week" on ABC. "The news with Freddie Mac and Fannie Mae, I think, along with the unemployment numbers, indicates that we're fragile."

Obama was referring to the two mortgage companies taken over by the federal government Sunday in what could become a huge taxpayer bailout. The nation's unemployment rate climbed to 6.1 percent in August from 5.7 percent the month before, the government said last week. It was the first time in five years that the unemployment rate had topped 6 percent.

Obama and McCain have sparred over tax policy for months. Obama says McCain wants to continue Bush administration policies, noting that McCain had voted against the Bush tax cuts but then embraced them as he campaigned for the Republican presidential nomination.

"John McCain likes to talk about fiscal responsibility, but there is no doubt that his proposals blow a hole through the budget," Obama said.

McCain has repeatedly hammered Obama over taxes in an attempt to paint him as a typical tax-and-spend liberal. McCain wants to make permanent the Bush tax cuts, which are set to expire at the end of 2010.

"We can get this economy back on it's feet," McCain said in an interview aired Sunday on "Face the Nation" on CBS. "Don't raise their taxes. Get it going again. Americans are hurting in a way that they have not hurt for a long time."

The Tax Policy Center, a think tank run jointly by the Brookings Institution and the Urban Institute, concluded that Obama's tax plan would benefit middle-income taxpayers more than McCain's. However, Obama would raise payroll taxes on taxpayers with incomes above $250,000, and he would raise corporate taxes. Small businesses that make more than $250,000 a year also would see taxes rise.

McCain's plan cuts taxes across all income levels. It would cut taxes for those in the top 1 percent by more than $125,000, raising their after-tax income an average 9.5 percent, the center concluded.

Comments

[ully]

Obama like hip hop! also his program,nothing clear! too many wrong words he repair! too many untrustable program! just vote Mcain and Palin!

[amessenger]

Tax Cuts Shmax Cuts! Too much too little to late. The Oil Monsters would have us believe that the money is going to Saudi and Middle East Sheiks and to some extent, (with our 70% dependency rate) that is accurate, except they get at least 45% of it all. But Truth? NOT AT ALL! Through an off-shore Oil Futures Trading Co. called I.C.E., (this all from ABC) they trade in futures with Goldman Sax and Santos Hedgies as the brokers. The deals are cut on London and DuBai's Exchanges
with currency exchanges in Georgia and NYC using U.S. Money. They drive the price up, trading back and forth and the International price of a barrel of crude oil is set in,....ready? Crawford, Texas. They could easily afford to absorb all the increases we have endured, which have resulted in trickle down oil-onomics effecting every good and service in America. If Futures Trading was suspended on the NYSE and dis-allowed by I.C.E. (off-shore to avoid S.E.C. regulation and oversight) we could be back in the black in 60 days. These thugs are manipulating the national security of the nation through their greed and avarice.
I am not ready to give-up on Barack and Joe. If it comes to it, I guess we'll all have to put our hats on, march to Washington, get tough and throw all the tea in the Potomoc!

[Huffingtonposter231]

Was that a Flip or a Flop?

And so Obama goes one item after another time and time again. Has the left figured it out yet? IF he wins they are going to be VERY disappointed once Obama starts doing nothing.

[ockraz]

Obama doesn't flip flop. Obama waffles. The difference is that a flip flop is a clear reversal, whereas a waffle attempts to obscure what is happening so as to camouflage the reversal. Does anyone remember adding "secure Iraq" to withdrawal or the DC handguns or public financing or drilling via gang of ten? Waffles are an attempt to stand up and say, 'you didn't parse me correctly when you say I've changed.'

[Pamela1961]

Who knew that when Obama spoke of change, he meant changing his mind all the time. And yes waffle is a better discription that a flip flop.

[isis]

I'm glad he has the brains to make some corrections to his policy if needed. The stock market did really poorly today and much of my retirement is in stocks. At least there is Social Security. Oh wait, Reagan spent it.

[OlderBudWeiser]

The economy according to McCains croneyism and ignorance.

http://www.baltimorechronicle.com/2008/051908Leopold.shtml

[nosemajd]

What a load of crap. The top 5% are doing very well--even in this recession. Instead of rescinding the taxes on the super rich, he should roll them back to the 1970 level and then use the money to invest in the infrastructure. That would put people to work who would then pay taxes and buy things that would in turn put more people to work. The super rich are not going to invest their tax refunds in actually putting American's back to work, but they will invest in undermining democracy. Remmember according to the supremes money = free speech. So the more money you have the more free speech you have. No wonder the rich hate the blogs!

[profproof]

the top 1 percent of earners pay 50 percent of taxes. the bottom 50 percent pay less than 3 percent. i'm going to go out on a limb and assume you are in the bottom 50 percent that pays almost no taxes. get yourself in gear and go get what you want instead of waiting for someone to give it to you.

[All57States]

BHO admitting raising taxes hurts the economy.

[wayoutleft]

a flip on rescinding bush tax cuts for the rich. imagine my surprise. does anybody even care anymore?
when he did the fisa double-flip into the water barrel at center-ring, scores of apologists spent all night trying to explain it away with researched legal arcana. there were a few 3000 comment threads before it was over. now he could come out for invading canada, executing pot smokers, and issuing handguns to students and no one would care. if you care now it's just because you hate bush- and that alone will probably be enough despite all.

[bbbbmer]

Obama seems like he's caving on Iraq, caving on energy, caving on taxes, caving on EVERYTHING that was included in his speech!!! WHAT'S GOING ON????? This is NOT the way to win!!!!!

[mero909]

Leave the tax cuts. How about reducing the amount of $$$ the government spends? Then you wouldn't need to lower or raise taxes and you can keep the tax cuts.

[Sportkrzr]

Looks like Obama recently got a course in Economy 101. Raising taxes is no answer. Redistributing wealth...taking money from the rich and giving it to the middleclass...is no answer. Reduce government spending is the only answer...maybe he should take a Home Economics class next.

[mero909]

Thank you! Finally someone with a realistic point of view.

[looneybin]

yeah I agree, but wait that is what John McCain said he is going to do.....hmmmm.

[ILibertine]

You know, I am not bothered by a candidate that changes a position based upon dynamic circumstances. I've had enough of stubborn rigidity in policy matters and well-reasoned flexibility is simply wise on economic and political matters, if providing superficial campaign fodder for the opposition. That said, I fail to see how perpetuating tax breaks for the wealthy is going to affect the economy. They are in no manner as profoundly affected by the price of energy or consumer goods (notably food); stock porfolios perhaps. I also raise question about this arbitrary $250K as indicative of wealth and think it extends too far down the income scale into the middle class - or what the middle class may require in order to be able to merely maintain its downward real income slide very soon. The wage earner has been snookered for the benefit of high income recipients and businesses and that needs to be rectified promptly.

[icechaos]

http://www.counterpunch.org/gowani09012008.html

[markkraft]

We're down now, yes. We know that we are fighting powerful corporate interests that have made BILLIONS, while American families owe about $30,000 of federal debt, from wars and tax cuts for the rich.

Can your family afford *ANOTHER* $30,000 worth of failure? Can your country afford years more of neglect?

*WE* cannot afford failure.... and we can't afford to lose hope. THESE are the times that try men's souls. Yes. We are being bombarded with lies. Yes, we're down. But we're underdogs. We stand up for Americans, and don't shrink from a fight.

Whether you supported Barack or Hillary, Joe or John, Bill or Dennis, we, as Democrats, have always stood up to defend Americans, and when we're knocked down, there's one thing we do.

WE RISE. So, what are you all waiting for? Rise up! Get on your feet! FIGHT!

Throughout this race, when Democrats seem on their last legs, they stand up! We do *BETTER* as underdogs, because its in our nature to stand up for the unemployed steel worker, or the mother with cancer who worries about her kids! Our message triumphs when we stand for Americans, throw off doubt and fear, and start saying YES, WE CAN. We've come too far to stop before the mountaintop. YES WE CAN and YES WE WILL!!

Go to http://www.barackobama.com and donate today. And be sure to let all your friends know you're taking a stand, what you're fighting for, and ask them to join us!

[hotwire]

I'm waiting for the Star Spangled Banner and Fireworks, when do they start?

[josie1969]

I personally don't feel that it is fair that the people who got a good education and worked hard all their lives to make a good life for them and their families, to be punished and taxed even more because many didn't. Obama's economic package will raise almost every tax there is. How will that help anyone? The ones who make the big money are the ones who provide jobs, give their employees raises, benefits... That will all drop off if they have to pay more to the government.

[frappe]

What country are you living in?

[ibsteve2u]

frappe asked: "What country are you [josie1969] living in?"

I would answer that josie1969 is quite obviously living in one of the countries other than the U.S. where the corporations and the wealthy elite are investing their tax savings so as to take advantage of both the more "business friendly" (i.e., cheap labor and no environmental laws) climate and higher ROI.

Look around...those tax savings sure aren't being reinvested in America.

[PigLipstick]

. . . and when they lose, they get a trillion dollar bailout from the government that we will be paying for over the next 2 to 3 decades rather than educating our kids or having access to affordable healthcare !

[markkraft]

You view it as a punishment, but you ignore the fact that those who are wealthy already got about a decade of lower taxes, while the middle class shrank!

If there's one thing we've seen, it's that trickle-down economics don't work! Reagan had to reverse his tax cuts and actually increase taxes when the budget deficit grew, and Bush?! He just refused to do a thing, so that now we have the largest deficit in history!

What *DOES* work is giving the lower and middle class more money, so that they'll spend it, rather than giving the wealthy more money to save, which usually helps create bubble economies.

The money spent by the middle class goes directly into US businesses, and has a much more significant effect than money given to the rich, because it increases demand and kickstarts the economy. Bush's tax cuts, however, had a negative effect, because it didn't raise demand for goods and help businesses significantly. Instead, the tax cuts went, often as not, into investments not in businesses or the US stock market, but into real estate and commodities speculation and investment in overseas companies.

The money saved from tax cuts for the wealthy oftentimes went where they could make the biggest returns on investment... and that helped create a housing bubble, more overseas competition, and higher commodities / goods prices for ordinary Americans.

[icechaos]

The middle class shrank because the underclass grew.

http://www.csmonitor.com/2006/0516/p01s02-ussc.html

50-60 percent drop out rates. As the US becomes more diverse it becomes poorer and weaker.

[profproof]

you say the money doesn't go into business because the rich invest it? what the hell do you think investing and the stock market is? it's businesses!

[Victoryin2008]

Obama is keeping all of Bush's tax cuts for people making $250,000 or less but will do away with taxes for people making more. People making more than $600,000 would see their taxes go up about $93,709, while McCain would REDUCE their taxes by $48,860. People making $19,000 or less would see a tax reduction of $567, but with McCain's plan the reduction would be $21. For middle income people ($37,600-$66,400) the tax break will be $1118 under Obama's plan and $325 under McCain's plan. Giving mulitbillion dollar INTERNATIONAL corporations billion dollar supplements and decreasing their taxes does NOT trickle down to us. When America's economy was dependent on small and moderately sized companies and when manufacturing was the mainstay of American politics, trickle down was possible. This is not the 1950's...it's an INTERNATIONAL MARKET WITH CORPORATE MONOPOLIES. These people do NOT trickle their money down to us.

[profproof]

you forgot to mention the other tax increases he wants. if you have a pension or 401k your taxes will go up. if you sell a home, stock or bond your taxes will go up. if you work for or by anything from a business that is going to have their taxes raised then you will pay more for everything you buy.

[TurangaLeela]

Everybody but the wealthiest people in the country are paying more than their fair share of taxes and are paying higher prices for EVERYTHING else thanks to Bush economic policies. It's rather ignorant to imply that everybody who is struggling right now just isn't educated or working hard enough. Tell that to educated professionals who've lost their jobs thanks to "corporate downsizing". You know, when big corporations use their tax breaks to open companines overseas and ship jobs out. Not the fairy tale you've described.

[hotwire]

Wrong. the top 1% of wage earners pay over 40% of taxes, bottom 50% pay no taxes. You have fed taken out, but get it all back unless you file single. And even then it's minimal. I know, I pay FICA and State you say, but every one does.

[profproof]

the top 1% earners pay 50% and the bottom 50% pay less than 3% of taxes. raising taxes on businesses just increases the cost to do business which then makes companies pass on the cost or look for cheaper places to do business. so obama's tax increases would make everything cost more and ship jobs overseas...something you say you don't want. you don't have to be a harvard economics major to understand this.