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November 07, 2008

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I love it! According to Brendan, except in "certain high income areas like Manhattan," families earning over $112,000 aren't middle class. All you hoity-toity upper-class moneybags earning $112,000, have your butlers assemble the staff and give them the news.

Comparing politicians' tax plans is good clean fun, but it's an exercise in fantasy IMHO. There's no reason to believe that they will actually enact them. Obama, like most Presidential candidates, proposed taxes insufficient to pay for his spending. The situation today is worse than usual, because:

-- Bush leaves office a half trillion dollar annual budget deficit.

-- The recession will increase spending and decrease tax revenue.

-- The bailouts of AIG, banks, GM etc. will cost hundreds of billions, if not trillions.

-- Nancy Pelosi wants a half trillion dollar so-called stimulus package. It makes no economic sense, but giving money to a lot of people makes political sense, so I think Congress will go along.

In total, we're looking at a deficit of 1 to 2 trillion dollars or more. I don't know what President Obama is going to do about this difficult situation, but his stated plans of some months ago would seem to be irrelevant.

The TPC analysis doesn't include the effects of the McCain $5,000 health care tax credit, which is $5,000 more than low income workers get under current law (as they pay no income tax, the tax deduction for employer-sponsored health care doesn't benefit them). Obama's health plan would also benefit low earners, but not as much as McCain's. Moreover, Obama's tax on employers who fail to provide health care (6%, according to the TPC) would almost certainly come out of workers' wages or other benefits, so it amounts to an effective tax increase on labor.

Correction: "Pelosi...called for the two-stage effort to involve a 60 to 100 billion dollar stimulus package in November, according to AFP."

http://afp.google.com/article/ALeqM5gkjQFGF-21lWB1z2Hsnf3HkIKzjg

Rob -- Brendan is making a generous exemption for those Manhattan dwellers. There's really no reason people in the 80th-90th percentile should be counted in the "middle class" anywhere.

$112,000 is easily enough to hire a butler, anyway, it's just that most people are uncomfortable with that.

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