If, as shown yesterday (at NewsBusters; at BizzyBlog), media reporters can't even get basic things like the fact that $1.74 x 3.5 doesn't equal anything close to $4 right, you would think that it's way too much to expect them to understand the difference between income and net worth.
You would be correct.
The coverage of last week's Social Security tax-increase proposal by Democrat Barack Obama included this representation by the candidate:
To extend the life of Social Security, Obama proposed applying a payroll tax to annual incomes above $250,000, affecting the wealthiest 3 percent of Americans. The Democrat also proposed eliminating income tax for any retiree making less than $50,000.
A targeted payroll tax such as the one the Illinois senator is proposing goes after the highest earners of salaries, wages, and self-employment income, who are often but nowhere near always among "the wealthiest 3 percent," at least some of whom receive all or almost all of their income from investments.
It's not surprising that Obama would make the obvious income/net worth error noted above, since, as I noted on Tuesday, he doesn't seem to even understand the difference between income and net worth. He told the same Columbus, Ohio audience that Warren Buffett had "income" of $56 billion, which is, of course, the Omaha investment legend's net worth. Buffett's total 2006 income of over $46 million is less than 1/1000th of his net worth, and the wage/salary component of his income is probably a small percentage of that $46 million. Oh well; focus groups probably don't mind going after someone's wealth as much as they would object to siphoning away that person's income.
It turns out that even the claim that "only" 3% are "affected" may also be a bogus.
I estimate, based on reviewing 2005 IRS data (Table 1.4, downloadable at this link) and 2006 Census Bureau information (Table AVG1, downloadable at this link), that the percentage of those "affected" (i.e., socked with a ginormous tax increase) is more correctly seen as about 2%.
There appear to be just about 3.0 million taxpayers who would be have to pay additional payroll taxes under Obama's proposal (some interpolation and inflation estimating was necessary to come up with this number). That 3 million would be:
- 3.3% of all taxable tax returns (90.6 million).
- 2.2% of all tax returns filed (134.4 million).
- 2.0% of all tax returns filed, plus an estimated 15 million (midpoint of the 10-20 million estimate here) legal nonfilers (149.4 million).
- 2.6% of all households, per the Census Bureau (114.4 million).
Which percentage should be used? I believe, unless you start adjusting for household or family size, that the 2.0% of all returns filed plus non-filers is the best approximation of all "Americans." I guess it all depends on what you mean by "affected" and "Americans." Maybe a reporter who reads this post might considering asking the candidate what he meant.
I have mixed feeling in bringing all of this up. The Obama campaign, once corrected, might decide that going after only 2% or so of Americans to further prop up everyone else instead of 3% isn't a bug, but is instead a feature.
Also open for discussion: What is a "retiree" for the purposes of Obama's $50,000 exemption from federal income tax? The answer is not as simple as you might think. Just for starters, are you a "retiree" if are 55, have officially retired from one company, and started work at another? If not, why not?
Cross-posted at BizzyBlog.com.
—Tom Blumer is president of a training and development company in Mason, Ohio, and is a contributing editor to NewsBusters
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Comments Policy
O BOOB
June 20, 2008 - 14:24 ET by CTThis guy really is a BOOB. Minor errors, miss statements, memory lapses and omissions are one thing, but O BOOB seems to have a genuine knowledge deficit. What's up with all this, not part of Harvard's curriculum or a community activist job description?
These days all fields are so
June 20, 2008 - 14:52 ET by Dan The Man 2These days all fields are so specialized and one has to really be into that sort of thing. So the abilities of a good President should be picking key personel to get him the right information in a timely fashion. All the more reason for criticizing him for his choice of associates.
Nuke em til they glow then shoot em in the dark.
Not good enough Dan
June 20, 2008 - 15:16 ET by CTYou have to know what's behind the statistics and the simple math required here to know what you are looking at. ECON 101 is all about graphs and statistics and how they can be made to imply anything you want. If O BOOB can't follow the math here he isn't packing very much. What he has done is demonstrate once again he hasn't a clue what he is talking about and the fawning MSM couldn't or wouldn't see it.
A President Needs A Broad Base of Knowledge
June 20, 2008 - 15:34 ET by geoff.galeA president has to have enough knowledge about a variety of topics to understand whether his/her selected expert advisors are giving him an accurate assessment and reasonable recommendations. One cannot just presume that a person with X degree from Y institution really knows what they're talking about.
This is one of the major contributing factors behind the climate change alarmism. People who don't understand the scientific method and understand statistical analysis even less are reporting on and making policy decisions about matters they don't understand. Ask Andrea Mitchell or Barbara Boxer to explain the difference between correlation and causation and watch their eyes roll back as they try to spin their way out of looking ignorant.
"All that is necessary for the triumph of evil is that good men do nothing."
- Edmund Burke (1729 - 1797)
www.conservativeboot...
As you say "One cannot just
June 20, 2008 - 15:58 ET by Dan The Man 2As you say "One cannot just presume that a person with X degree from Y institution really knows what they're talking about" and this is all the more reason to look at a the associates and advisors a Presidential canditate picks. As far as this statement "A president has to have enough knowledge about a variety of topics to understand whether his/her selected expert advisors are giving him an accurate assessment and reasonable recommendations" it is true, but how much knowlege? It all boils down to what do you trust to be factual.
Some of the libs on this site have their facts and the con have thiers. So who's facts are right? It is sorta like time passing is relative to which side of the bathroom door you are on. Arguments can be made for all sides.
Now hard and fast facts such as statements one has made are harder but not impossible to twist to your side.
So all in all I stand by my assertion that Presidents should be experts in picking teh right people and they don't have expertise in teh field. But they do have to know how to tap into the knowlege, sorta like being able to look up a word in a dictionary.
Nuke em til they glow then shoot em in the dark.
Sorry. No Sale ....
June 20, 2008 - 16:07 ET by Tom BlumerA Prez needs to have enough grounding in critical areas to separate the BS from good advice, to ensure that his policies are being carried out as promised, and to detect the scam artists every admin gets a few of.
Obama is, by far, more clueless and semi-literate/nearly illiterate in more areas than any candidate I've ever seen. That includes Gore, which is saying something.
Thanks For Tying The Ribbons On It
June 20, 2008 - 18:02 ET by geoff.galeMy thoughts exactly. The president has to be more than just a good judge of advisors, (s)he has to be able to pick the wheat from the chaff when it comes to the products of those advisors, and that takes broad-based knowledge and depth of experience.
That's why we've had this whole debate about Obama's lack of experience raging for the past 6-7 months. Not only has Obama had questionable relationships throughout his career, he doesn't have the broad-based knowledge and depth of experience that would tell him when he's off-track.
"All that is necessary for the triumph of evil is that good men do nothing."
- Edmund Burke (1729 - 1797)
www.conservativeboot...
Minor errors, miss statements, memory lapses and omissions
June 20, 2008 - 16:51 ET by Big WallyAre never to be repeated. Because his election as POTUS will prove to the world that America is "fill in the Blank"!
folks we are in trouble! "Mark Levin"
"This guy really is a BOOB.
June 20, 2008 - 18:05 ET by ckc1227"This guy really is a BOOB. Minor
errors, miss statements, memory lapses and omissions are one thing, but
O BOOB seems to have a genuine knowledge deficit. What's up with all
this, not part of Harvard's curriculum or a community activist job
description?"
He doesn't have to be smart, he just has to be smarter than the fools lining up to vote for him.
Why does Obama favor the upper middle class over everyone?
June 20, 2008 - 14:35 ET by Dee BunkI think this is the point that needs to be mentioned every time this subject comes up.
Why does Obama think that the upper middle class should pay less of a percentage of their income in payroll taxes than the poor, the lower middle class and the rich? There is no good logic for it what so ever. It's the clearest form of blatant pandering that there ever has been.
I know, I know!!!
June 20, 2008 - 15:11 ET by bioteachedDee -
The answer to your question lies in another question . . .
. . . what is the salary of a U.S. Senator?
I think you will find that his proposal nicely excludes his own Senatorial salary and those of his buddies in Washington D.C.
I know there are a lot of other people that are in that income bracket too, but I thought that was a convenient break in the payroll tax additional tax!
good point bio - along with many of his friends and relatives
June 20, 2008 - 15:26 ET by Dee BunkI hadn't really even considered that. It's also the salary of many of his friends and relatives and a lot of moderate Dems and Independents.
There is absolutely no good (altruistic) reason to give that one group beneficial treatment to those above and below it. McCain is an idiot if he doesn't capitalize on this total hypocrisy.
Our congress men and women
June 20, 2008 - 16:25 ET by jdhawkOur congress men and women don't pay Social Security or Medicare taxes that take 15%+ of the income of wage earners earning up to $90k+ today. Congress has their own retirement and medical plan apart from the rest of us.
So bambi and the rest of them could care less that you and I get a 15%+ hair cut every payday before we see a dime of our hard earned money. And, that is not counting local, state and federal income taxes.
What bambi should be doing is making Social Security income tax free. Clintoon made it taxable.
Think about it. It is as heinous as death taxes. Like death taxes, you have already paid taxes on it once. Now, years later, when you receive it and it is worth far less due to inflation and it is actually negative as compared to any investment vehicle alternative that you care to make, you have to pay taxes on it. It is outrageous.
bambi is an ignorant far left liberal that is foisting the tired failed policies of socialism on us. Don't let that happen.
Democrats change explained
June 20, 2008 - 14:37 ET by 10ksnookerThey have a three legged plan -- Raise taxes, raise taxes and raise taxes.
Drill here drill now, pay less -- Change you can believe in.
Someone should come up with
June 20, 2008 - 14:41 ET by pepsiman127Someone should come up with a bill to tax trust fund distributions at say 40 or 50% and let the workers alone,,wonder what algore and the rest of the trust fund babies would find wrong with that idea?
Actually this whole
June 20, 2008 - 14:58 ET by dscottActually this whole proposal by Obama is a scam. Let's say for the moment that Obama is successful and impliments the SS payroll tax on earned income above $250k. What has been the response of the wealthy since the beginning of the levying income tax? Change how you receive your income. The response will be by every company paying someone above $250k to restructure executive compensation to $249k plus stock, options or something else. Why would companies do this??? Duh! they don't want to pay 6.2% on $250k plus would you????? The net effect is a zero increase in SS payroll tax on such earners.
Do you remember the self serving talk of people like Pickens, I believe, about how much in % they pay less than wage earners claiming it's wrong for this disparity in %, blah, blah, blah???? Here is the perfect cover for this group of prime Dem contributors to claim they are paying their fair share when in fact they would pay nothing at all!!!!
Nancy Pelosi and Harry Reid, starving the poor one gallon of ethanol at a time. Fill your tank with E85 and cull a village.
BTW- Let's think for a
June 20, 2008 - 15:16 ET by dscottBTW- Let's think for a moment why Obama would propose a >$250k SS payroll tax and not simply push the $102 cap up to $250k.
The bulk of well off Dem supporters fall in the doughnut hole of 100k to 250k. It was referenced by TNR when talking about the AMT a year ago. They took down the page. This is why Obama didn’t want to subject his core group of monied supporters to the confiscation of the SS payroll tax. Also note that the AMT sucked in much of this particular group because of the Bush tax cuts. That's right, people who made $100k to $250k mostly didn't get the Bush tax cut!!! They got the AMT instead!!!! I make less than $100k and I got the benefit of the Bush tax cut. This is why the Dems rail against Bush because not only didn’t they get the benefit of the tax cut, they instead got wacked with the AMT. Remember Rangle attempting to get rid of the AMT in favor of cancelling the Bush tax cut??? It was us who earn less than $100k who got the Bush tax cut that spured the economy and swelled the tax receipts by a trillion dollars a year, not the Yuppies.
Obama wants to commit a fraud upon the American taxpayer by claiming he is going to wack the rich when in fact he wants to use the US Treasury to kickback money to his Yuppy contributors. Obama is either going to cancel the tax cut or let it expire sticking the Average American with the bill. That's right, if Obama get's his way in cancelling the Bush tax cut, the Yuppies instead will get a tax cut by not paying the AMT that means you and me get to pay higher taxes. This guy is a fast talking conartist, not a messiah.
Nancy Pelosi and Harry Reid, starving the poor one gallon of ethanol at a time. Fill your tank with E85 and cull a village.
"Tax the rich, feed the
June 20, 2008 - 15:27 ET by mattm"Tax the rich, feed the poor, 'til there are no rich no more" From a song by 10 Years After.
This is the MSM Pop - culture view, and it seems to make sense - especially to thoughtless people who fail to realize, 1) anyone with a full-time job is considered 'rich' by the Left, and 2) if there are no rich, there will be no full-time jobs (other than soviet-style slave labor)...
"Communism is neither an economic nor a political system -- it is a form of insanity -- a temporary aberration which will one day disappear from the earth because it is contrary to human nature. But I wonder how much more misery it will cause before it disappears." - RWR
Great reference ....
June 20, 2008 - 15:51 ET by Tom BlumerThe 10YA song is at least partially a conservative paean to apathy, as in "it's going to heck, and I can't stop it."
As I hear it, Alvin Lee was saying that taxing the rich to feed the poor was crazy.
I never looked at it that
June 20, 2008 - 15:55 ET by mattmI never looked at it that way, but maybe there's something to that.
Great guitar work in that song - I tried to cop the solo once, but it's too fast for me....
I think it's like Tom said, too.
June 20, 2008 - 16:03 ET by sarcasmoI never saw the song in the way you'd described, actually, so it made me wonder. I guess it's impossible to be 100% sure of the meaning with any form of art. But I think it's pretty safe to say the 10YA song fits in the "on our side" category politically.
JMR
The tax & spend drug war looks racist in the real world.
From Fox News: "According
June 20, 2008 - 15:59 ET by goldbarFrom Fox News:
"According to the Tax Policy Center's analysis of the two candidates' tax plans, 80% of taxpayers would get more from Obama's cuts than from McCain's. About 95% of taxpayers would pay less under Obama than under current law (which ends many of the tax breaks passed in the past decade). "
Sorry, I'm not believing
June 20, 2008 - 16:07 ET by dscottSorry, I'm not believing that anaylsis for even a minute. The only people who would benefit from Obama are his supporters from primarily the non paying taxconsumers and the Yuppies in the doughnut hole. The middle class would be screwed with a tax increase by the cancellation of the Bush tax cut.
Nancy Pelosi and Harry Reid, starving the poor one gallon of ethanol at a time. Fill your tank with E85 and cull a village.
Further analysis: "The
June 20, 2008 - 16:17 ET by goldbarFurther analysis:
"The two candidates’ plans would have sharply different distributional effects. Senator McCain’s tax cuts would primarily benefit those with very high incomes, almost all of whom would receive large tax cuts that would, on average, raise their after-tax incomes by more than twice the average for all households. Many fewer households at the bottom of the income distribution would get tax cuts and those whose taxes fall would, on average, see their after-tax income rise much less. In marked contrast, Senator Obama offers much larger tax breaks to low- and middle-income taxpayers and would increase taxes on high-income taxpayers. The largest tax cuts, as a share of income, would go to those at the bottom of the income distribution, while taxpayers with the highest income would see their taxes rise."
My analysis:
If your income is less than $250,000 vote for Obama. More than $250,000 go for McCain.
"My analysis: If your
June 20, 2008 - 19:06 ET by forest"My analysis:
If your income is less than $250,000 vote for Obama. More than $250,000 go for McCain." - goldbar
I make well less than $250,000, and I'd get burnt. Like I mentioned in the post below, my taxes stand to go up significantly.
Maybe I'm becoming a broken record, but
June 20, 2008 - 17:05 ET by forestObama's plan is similar to Rangel's tax bill (HR 3970) that is in his committee right now - going nowhere because of a promised veto by Bush.
If the bill becomes law (likely if Obama gets elected), many thousands of self-employed people who earn less than $250,000 will see a significant tax increas. This includes me. Under the proposed changes (read: tax hike), I'd have payed about $5000 more in tax his year.
The change would eliminate the tax benefit of operating as, or opting to be taxed as an S-Corp. S-Corp presently provides partial relief from "self-employment" tax - the full 15% FICA on all income in addition to all other taxes. S-Corp allows for paying half that FICA on income over and above wages, which are still hit with the full 15%.
It's relatively minor relief for self-employed people who own S-Corps, but even that will be gone under the Democrat plan, heaping even more tax burden onto small business and entrepreneurs who are usually not "rich", and are not being counted in the math of who's going to get looted by the dems.
Forest
June 21, 2008 - 00:37 ET by DelsaYou are absolutly RIGHT.
My husband is Sub S. The self employed in this country will not exist as we do today. It will be impossible to do business.
We are both self employed. What they are proposing will drive me to .......??????
Beginning and ending with ruin.
Obama!
June 20, 2008 - 20:04 ET by pbthinkerWe already know Obama is a moron, when it comes to taxes. What we're going to find out, if we're morons and elect him to be president, is just how terrible he is.
The media keeps trying, and trying, and trying, to make Bush's economy look bad, while Clinton's looked good. The problem is that, everytime they try, the figures come out and dispute it. How many times, in the past year, have the predictions of doom and gloom been highlighted, by the MSM, and then, a few months later, there have this surprising story, on page 15a, that states "First quarter employment figures weren't as bad as first reported......". To me, that's a purposeful effort to control people's perception of the economy. It's been going on for quite a while and they've gotten away with it. Why?
Democrats: Stuck on Stupid since 2000.
Lliberal press does not care about truth, just "Obama frenzy"
June 21, 2008 - 00:03 ET by wdhorningNeed I say more?
The last thing the media is
June 21, 2008 - 00:29 ET by Delsais clueless.
They know exactly what they are saying and doing.
This country is fast coming to a screeching halt.
It's not just Obama who is clueless
June 21, 2008 - 12:18 ET by c5thenIt's most liberals who think that by doubling the tax on the top 2% they will increase the revenue of that tax by 25%. They do not have any clue that the top 5% of "earners" in this country are the best able to re-structure their compensation to avoid most of the taxes.
Their socialist dream is that somehow they can "tax" a small % of the population to "support" the rest and that those being taxed will smile and happily be robbed.
The day that "politician" became a career choice is the day we started losing the Republic. Let's get it back! Alan Keyes '08.