Sunday Wag: A Broken Promise

Mar 08, 2009 in Politics

Back in September of 2008 in the heat of the political campaign for president, Barrack Obama changed his stance on capital gains taxes (Here is a captial gains primer.) In Barrack Obama's Comprehensive Tax Plan it stated he would:

Eliminate capital gains taxes for small businesses, cut corporate taxes for firms that invest and create jobs in the United States, and provide tax credits to reduce the cost of healthcare and to reward investments in innovation. (Factsheet_Tax_Plan_FINAL pdf)

The eliminate capital gains for small businesses was very interesting to me. I declared such a policy was "something I could live with."

But alas, that was then. This is now. Erik Peterson pointed me to this article by PolitFact. Deep within the 285 page Joint Explanatory Statement: Section B on pages 60 and 61 new capital gain tax treatments for small businesses are outlined. This is in part what it says.

Under present law, individuals may exclude 50 percent (60 percent for certain
empowerment zone businesses) of the gain from the sale of certain small business stock acquired at original issue and held for at least five years. The portion of the gain includible in taxable income is taxed at a maximum rate of 28 percent under the regular tax. A percentage of the excluded gain is an alternative minimum tax preference; the portion of the gain includible in alternative minimum taxable income is taxed at a maximum rate of 28 percent under the alternative minimum tax.

Thus, under present law, gain from the sale of qualified small business stock is taxed at effective rates of 14 percent under the regular tax.

The amount of gain eligible for the exclusion by an individual with respect to any corporation is the greater of (1) ten times the taxpayer's basis in the stock or (2) $10 million. In order to qualify as a small business, when the stock is issued, the gross assets of the corporation may not exceed $50 million.

And.

Under the Senate amendment, the percentage exclusion for qualified small business stock sold by an individual is increased from 50 percent (60 percent for certain empowerment zone businesses) to 75 percent.

To generalize what the above lays out, the effective capital gains tax rate for investments in small businesses is going from 14% to 7%. Seven percent is not eliminate. I am disappointed.

President Obama inspired hope by making the big promise of change. Like all good leaders, President Obama must remain true to his words. While the above is just a single example, if breaking smaller promises becomes a habit for this administration, the people are going to stop believing. And that would be a sad day for America.

My Votes My Friends

Oct 08, 2008 in Politics

After watching three debates my biggest response to them is a simple yuck. McCain merely supplies old solutions that no one wants to hear about. Obama has merely proven much more skilled then Palin in bridging (the PR not networking type) by turning questions on the need to cut back to solve the financial crisis into spending manifestos to give just one example. Personal highlight for me was when Obama used the term "Force of Good" vs. McCain's "Force for Good" (I will have to explain the back story one day).

I am in the midst of deciding who I am going to vote for this year. Seems to be turning into another battle of the less of two evils. I consider myself a moderate independent. For a little perspective here are the USA presidential election results since I have been old enough to go to the polls.

1980	Ronald Reagan Jimmy Carter John B. Anderson	Republican Democratic Independent	489 49 0	43,899,248 36,481,435 5,719,437	George Bush—R Walter F. Mondale—D Patrick J. Lucey—I
1984	Ronald Reagan Walter F. Mondale	Republican Democratic	525 13	54,455,075 37,577,185	George Bush—R Geraldine A. Ferraro—D
1988	George H. Bush Michael S. Dukakis	Republican Democratic	426 111²⁶	48,886,097 41,809,074	J. Danforth Quayle—R Lloyd Bentsen—D
1992	William J. Clinton George H. Bush H. Ross Perot	Democratic Republican Independent	370 168 0	44,909,889 39,104,545 19,742,267	Albert A. Gore, J.—D J. Danforth Quayle—R James B. Stockdale—I
1996	William J. Clinton Robert J. Dole H. Ross Perot	Democratic Republican Reform Party²⁷	379 159 0	47,402,357 39,198,755 8,085,402	Albert A. Gore, Jr.—D Jack F. Kemp—R Pat Choate—RP²⁷
2000	George W. Bush Albert A. Gore Ralph Nader	Republican Democratic Green Party	271 266²⁸ 0	50,456,002 50,999,897 2,882,955	Richard B. Cheney—R Joseph I. Lieberman—D Winona LaDuke—GP
2004	George W. Bush John F. Kerry	Republican Democratic	286 251²⁹	62,028,285 59,028,109	Richard B. Cheney—R John Edwards—D

For a little more perspective it may be interesting to see my voting history. So here it goes in a semi sentence. Anderson, Reagan, H. Bush, H. Bush, Dole, W. Bush, Kerry. So five Republicans sandwiched by an Independent and Democrat make up my presidential vote choices over the past 28 years.

In seven days my mind will be made up on who I will vote for in 2008. I would like to think my history shows that it is not the party but the issues that influence me when I go to the polls.

I currently have a lean. One more debate. Then I choose.

In the meantime it would be interesting to see the voting history of FoG readers if any of you care to share.