McCain claims Palin "not wealthy"

John McCain, who previously joked that he defined being rich as making over $5 million, said yesterday that his running mate Governor Sarah Palin and her family "are not wealthy." Really? Americans' median household net worth in 2002 was approximately $59,000 (PDF). The Palin family's net worth exceeds $1 million according to financial disclosure forms. I think most people would define someone with a million dollar net worth as wealthy.

Comments

[David]

I guess it depends whether "wealthy" is defined based on income or net worth. It seems to me that the today income is more often used. Income was the basis in the link Brendan provided.

Via google, I found "Sarah Palin’s salary as governor was $125000; Todd Palin took in $46790 as a part-time oil production operator for BP"

http://sarahpalintruthsquad.wordpress.com/2008/10/01/alaska-governor-sarah-palins-financial-assets-detailed/

Many would consider this upper middle class, rather than wealthy.

[Rob]

David, David, David. Don't you see? People who have managed to accumulate total net worth (house, investments, pension accounts) of a million dollars are wealthy. They'll be the targets when we "spread the wealth around." Not initially, of course. First, we'll just wet our beaks with the very rich. Then, enjoying the taste but realizing there's not enough wealth among the very rich to make a serious difference, we'll come back for those who are just wealthy. "Redistributive change"--learn it, live it, love it.

[Howard Craft]

Here you go Rob -

Democrats want to punish people for dying (estate taxes). You should make that case too. Eventually they will need to "euthanize people" to achieve their agenda.

*****

You know, that Q&A with Obama and Joe the Plumber was a few minutes long. We hear one line, taken out of context. We're told it means something specific (or something more than it means).

The context was (at that point): could we have a "flat tax"? Obama responded to Joe that we couldn't (at least not one that would work in today's world - not by any means). We have a progressive tax structure. That's how it is under George W. Bush and that's how it will be for the foreseeable future. Higher levels of income get taxed at higher rates.

Obama also justified a tax cut for those with incomes under a certain amount. He said it would benefit Joe (if he was a business owner) by benefiting his customers. (And it would benefit Joe's employees, if he actually had any. Plus Joe could pay them less or not need to give them as much of a raise, or ask them to pay more of the employer sponsored health plan he was covering them under. It could benefit Joe too, couldn't it?)

But that's not the point.

The point is that some "Conservatives" think it makes sense to promote "tax relief" for the wealthy but it’s wrong to promote "tax relief" for the upper middle class and below.

We raise revenue to pay for services, of one type or another. Where the money comes from is also a question of policy. These are both worth discussing - tax policy and spending policy.

Ascribing motives and debates about hidden (or not so hidden) ideology (or ascribed ideology) isn’t going to resolve anything. Edited tapes where I am told the "real meaning” of the spliced comments don't relate to the actual world.

[Howard Craft]

On that income -

Todd Palin also earned $46,265 in commercial fishing income and $10,500 in Iron Dog snow machine race winnings.

The Palin family received $11,578 in state oil royalties (that's the total - it was paid on per person basis as a form of royalty income for citizens of the state).

So that's about $ 240,000. Still not wealthy. Some of that may not be dependable though (such as sport competition winnings).

(She also has received $43,490 to cover travel costs for her husband and children. These figures do not include nearly $17,000 in per diem payments Palin received for 312 nights spent in her own home since she was elected governor. I'm sure some of those were re-reimbursements and/or were justified.).

"Frugal"? Does it really matter, one way or the other?

I think McCain was addressing her campaign wardrobe (paid for by the campaign, or the party). About as silly an issue as John Edwards' haircuts.

[Rob]

The "redistributive change" quote comes from Obama's 2001 interview with Chicago's public radio station; it's not just his colloquy with Joe the Plumber. In that 2001 interview, Obama eloquently makes the point that it's not the function of the courts, interpreting the Constitution, to effect redistributive change. Rather, that's something to be accomplished by "political and community organizing and activities on the ground that are able to put together the actual coalitions of power through which you bring about redistributive change." In other words, you don't effect redistributive change through the courts, you do it by gaining control of the Presidency and the Congress.

I don't expect Obama to communize America, but I do expect him to take steps to achieve what he regards as a more just distribution of wealth, by taking from those who have more and spreading it around to those who have less. Increasing progressivity of income taxation is one way to achieve that. Increasing government payments to certain people (through tax credits and "refundable" tax credits for the lucky many who don't pay income taxes) is another way. Using the estate tax to limit intergenerational transfers of wealth is a third way. Obama is in favor of all those.

This isn't a matter of ascribing motives about hidden ideology, it's about taking Obama at face value and acknowledging what it is that the man is proposing.

Rather than calling for some sacrifice by Americans, both Obama and McCain have competed over who can promise more handouts and tax cuts, and both have promoted the idea that steps to address global warming will be not a cost to the society but a source of newfound riches. To be fair, Obama has called for sacrifice by one group--the 5% of the society with the highest incomes.

The late Senator Russell Long once said that people's idea of tax reform is "Don't tax you, don't tax me, tax that fellow behind the tree." That's not just a clever little ditty, it's the Obama tax plan.

[Jinchi]

through tax credits and "refundable" tax credits for the lucky many who don't pay income taxes

I know that conservatives love to pretend that millions of Americans don't pay taxes, but virtually everybody who works pays Social Security and Medicare taxes as a percentage of their income up to a maximum amount ($106,800 this year).

It's not called an income tax but it looks the same when you deposit your paycheck. It also happens to be the only portion of the budget currently in surplus, which is why the fed has been raiding it for years and now threatens not to pay the debt back. That means that the wealthy of this country (those making so much that the FICA tax is a tiny fraction of their income) have been getting a subsidy from the lower and middle classes, not the other way around.

The budget is nearly a half-trillion dollars out of balance this year thanks to a Republican fallacy that tax cuts generate revenue and to a war waged on borrowed money. If Republicans want to be taken seriously again they need to explain how we'll pay off the bills they've left behind. Until they can think of something credible, they should stop whining about paying their part.

[Rob]

Jinchi, I chose my words carefully, because Obama has made the case that refundable credits aren't handouts for those who don't pay income tax because they do pay FICA contributions and sales taxes (the fact that sales taxes are paid to the states, not the federal government, doesn't seem to matter). But let's talk about Social Security and Medicare.

First off, you're right that the Social Security contribution is capped, but wrong about the Medicare component. It's not capped.

Second, the reason Social Security contributions are capped is that Social Security benefits are capped. Benefits are directly related to the amount of Social Security taxable income on which the beneficiary paid contributions, with the exception noted in the paragraph below. Social Security was set up and sold to the public as an insurance program, not a welfare program or a wealth transfer mechanism. That was a very conscious choice, because in those more austere days of the thirties (and for many decades thereafter), it was felt that many people would recoil at being made the recipients of government handouts, whereas they wouldn't object to receiving insurance benefits. There was also considerable concern that people would suspect that a wealth transfer mechanism would inure to their detriment. Those notions about people wishing to be self-sufficient seem a little quaint now, so government policy makers may well feel comfortable removing the ceiling on Social Security contributions. It's only a matter of time.

Third, there is an exception to the general proposition that one's Social Security benefits are directly related to the amount of Social Security taxable income on which one paid contributions. The exception is that the benefits are somewhat weighted to favor lower-income recipients. (In addition, the rules governing taxability of Social Security benefits disfavor higher-income individuals.) What is most definitely not true is your assertion that the wealthy have been getting a subsidy from the lower and middle classes. No way, no how.

[Jinchi]

Second, the reason Social Security contributions are capped is that Social Security benefits are capped.

As long as the Social Security trust fund is being tapped to cover the general operating expenses of the government, it doesn't matter what benefits are capped at. This is especially true if the fed has no intention of paying the fund back (which was the argument made by Bush and supported by McCain).

In any case, there is never a guarantee that the taxes I pay will return to me dollar for dollar in services from the government (Palin's Alaska and McCain's Arizona do far better than Obama's Illinois or Biden's Delaware on that count). Taxes are always a redistribution of wealth and it's hard to argue that the wealthiest among us - many of whom are the beneficiaries of the recent bailout - are being bled dry.

[Noumenon]

I was wondering whether Palin looked wealthier than the median because the median compares her to a bunch of 20-year-olds. But the net worth for households 65 to 69 who have been saving all their lives is a median $137,000.

[Howard Craft]

Rob -

Social security is in trouble, to the extant that it is (which is debatable) because of shifting demographics (slower population growth) and increased life expectancy.

But in your comments you focus on issues of self-reliance and entitlements.

They are two seperate issues.

You present your point by saying that making adjustments to ensure solvency is proof of intent to work toward diminishing self-reliance.

*****

Your comments about the Obama tax plan are somewhat similar.

Would it be reasonable for me to say that Bush wanted to promote a greater concentration of wealth - that that was his goal?

A reasonable reply (from you) would be that he didn't want to distort the distribution of wealth at all - that he wanted to allow it to return to a "more natural state".

But we don't really have a "natural state."

I think much of what I hear and read around Obama's tax plan involves taking his stance and exaggerating it. That exaggeration does involve ascribing motives and a hidden (or exaggerated or ascribed) ideology.

I see it as similar to saying that a tax cut for the wealthy is motivated by an intent to punish the less affluent.

These approaches "excuse" people from dealing with the actual policies and programs.

The audio interview "clip" you link to was edited to deliver a message, just as the "Joe the Plumber" "clip" was, removing it from context. A set of several sound bites strung together isn't significantly different than a single sound bite. It can even be less representative of what Obama actually said.

[Rob]

Howard, I'll try to resist the impulse to have the last word and not go point for point with you. But I do object to your mischaracterizing what I wrote--a problem I seem to recall we've had in the past as well. You write, "You present your point by saying that making adjustments to ensure solvency is proof of intent to work toward diminishing self-reliance." I said nothing of the kind. I said nothing about ensuring solvency. I said nothing about intent. That's your gloss on what I wrote. Fine, but please don't put your words in my mouth.

To proceed briefly to the substantive point about Social Security, one way to achieve solvency is certainly to raise Social Security contributions. Doing that by raising everyone's contributions by x percent would accomplish that. Doing it by making a person earning $1,000,000 pay ten times as much as a person earning $100,000, but receive only the same benefits as the $100,000 earner, converts Social Security from an insurance program to a quasi-welfare wealth redistribution program. As people care less about self-sufficiency, they may be prepared to accept that change--but let's not pretend that it wouldn't change the basic nature of the program.

[David]

Social Security is out of balance because our politicians have chosen not to balance it. The program consists of taking money in from one group of people and paying to another group. It can be fixed by increasing the dollars in or decreasing the dollars out.

Given the incrased life expectancy since the program began, the appropriate approach would seem to be a substantial delay in starting benefits or a reduction in the inflation factor. However, Congress isn't eager to do either, because seniors represent a large, organized voting bloc.

To me, this political situation is typical of the problem of giving one person's money to another. Whatever economic, social or fairness justifications may exist, these program eventually become payoffs to those groups that are more effectively organized.

Thus we see wealthy farmers getting billions of dollars of money, much of it paid by middle class Americans. Seniors' generous SS and Medicare is paid for by working Americans, even though the average senior is richer than the average person paying in. Once these programs are in place, it seems they can never be killed or even shrunk.

[Howard Craft]

Rob -

What you write usually comes with its own gloss. Mine is just more explicit.

No you did not mention solvency.

You actually left that part out.

I suppose we should conclude that social Security may be adjusted - to make it more onerous for the affluent - just as a matter of principle. Extending the re-distribution of wealth. If not that, then you imply Congress will be simply acting opportunistically. Perhaps you intended to present both those views.

Apparently the absence of any "notions about people wishing to be self-sufficient" is complete, at least in Washington. It need not be diminished any more.

I don't really accept those views, and I don't find them very meaningful in terms of actually discussing policy. But you're entitled to your own opinions.