Wednesday, October 29, 2008

Mac Must Make the Investor Case Now

John McCain is gaining traction on the tax issue as he aggressively makes the case that Obama the Redistributor will take your money and give it to someone else, while he, McCain, will create more economic opportunity by growing the pie for everyone.

Key polls — like Rasmussen, Gallup, Battleground, and IBD — show a narrowing of the race to 2 or 3 percentage points just in recent days. This is in part because Joe the Plumber has crystallized McCain’s campaign message to a pro-growth tax-cut recovery plan that reaches out to investors all across the country. Now the big question is whether McCain will stay on message and keep hammering these points home.

Two days ago in Ohio, McCain argued: “We will cut the capital-gains tax. And we will cut business taxes to help create jobs, and keep American businesses in America.” It’s the first time he referred explicitly to his capital-gains tax cut, which would take the investment rate to 7.5 percent from current law of 15 percent.

Against the backdrop of plunging stocks and deflating home prices, that means asset buyers would keep 92.5 cents of every additional dollar of profit from the purchase of underwater stocks, houses, or any other asset. Current law will let you keep 85 cents on the extra dollar. So McCain’s plan is a 9 percent incentive reward to invest and take risks.

Now contrast that with Obama’s capital-gains tax hike to a 20 percent marginal rate (at least). That means you keep 80 cents of the extra dollar of invested profit instead of today’s rate of 85 cents. In other words, that’s a 6 percent penalty compared with current law.

Adding up McCain’s 9 percent reward and Obama’s 6 percent penalty, we’re talking about a 15 percent swing in the after-tax cost of capital and reward for investment. Stocks have already fallen 40 percent from last October’s peak. So the 15 percent differential between the Obama and McCain plans makes a very big difference to the 100 million investors who comprise nearly two of every three votes in presidential elections.

Additionally, McCain would provide a $15,000 capital-loss tax deduction and would lower the tax rate on retired investors who redeem their 401(k)s or IRAs to a rock-bottom 10 percent. Plus, McCain would drop the corporate tax — a big boon to consumers who actually pay the tax — and would keep income-tax rates at present levels.

Obviously, there’s a very significant difference between the Democratic and Republican plans. If only Mac hammers this home in the final days of the election. Sure, folks have a strong dislike for redistribution. They prefer opportunity. They want to grow the pie larger. And they don’t want left-wing activist Supreme Court judges to take away even more of their economic rights. Hence McCain’s case grows even stronger — if he pounds away and makes it. But yesterday on CNBC John McCain never mentioned capital-gains or investors. That’s not the way to do it.

The latest IBD/TIPP poll shows a 46-46 toss-up among investors. That’s not good. What I’m saying here is that while the redistribution argument is working, it needs to be bolstered by a strong case to investors, who are usually the very base of the GOP.

The opportunity is there for Sen. McCain. But he must have a disciplined investor message in the remaining days.

27 comments:

Intrade said...

HazeNYC said :

    if we don't raise taxes... whether it be income taxes, real estate, capital gains etc... if we don't raise taxes then how do we fund our deficit and expenses? Obviously the old issue more debt and print more money scheme has failed to work and has brought us in part to right nows crisis... So we kind of HAVE to raise taxes right? I rather pay 1% more of my income to have a stable, safe, and prosperous America, than to keep an extra 1% and have a country falling apart at the seams financially and then socioeconomically.
People are so greedy these days.. living well above their means and with household debt at record highs and savings rate at lows. If America is to provide the things a modern nation should to it's population: Quality healthcare & education, military, technology, infrastrutcure, agriculture etc etc then we need to support that and pay enough taxes to make it work.. across the board.
imho.

Intrade said...

Nancy Brumback said :

    I agree with HazeNYC. Kudlow is a selfish old son-of-a-bitch. For a few percentage points of extra income for people who already are much better off than the average American, he would want to risk having Sarah Palin become president, a person who makes fun of fruit fly experimentation, maybe because she doesn't believe in evolution, but probably because she just doesn't know any better. The redistribution vs. growing the economy propaganda is bullshit and Kudlow knows it if he's any kind of economist. We can see from the mess we are in today that fanatical belief in supply-side economics doesn't work. Cutting taxes on the middle class is a good way to grow the economy too because then people will have more money to buy things, increasing demand, and increasing demand creates jobs. Let's try something different for a change!

Intrade said...

dr461 said :

    Kudlow is exactly what is wrong with our economy, and why we're in such sorry shape. He's so turned on to "GREED" that he sees that the only motivation for political action is to perpetuate the status quo, and the Republican "old boy" network. Labels such as "socialist" for those who want change smack of McCarthyism, and are tacky and offensive ways of trying to scare people. Barack Obama is FAR from socialistic in his desire to rebuild the economy from the middle class up, as opposed to helping line the pockets of overpaid and underworked wall street executives. WE DO NOT need another tax cut for the rich--"tickle down" economics has not worked since the tired days of Reaganism.

"Redistribution of the wealth" is not the goal of the Obama campaign--read that as a futile attempt for a failing candidate (McCain) attempting to disparage a legitimate desire by the Obama forces to bring back regulation and fairness to the economic policies of this country. Imagine a college football game without referees ( Quote from the House Majority Leader--Stenny Hoyer). It would be bedlam, and that is exactly what has happened in the past 8 years.

So, don't fear Obama--he's the change we need so as to make both Wall street and Main street profitable, through revised economic growth. Kudlow and his boys have sold off half of the USA to China, Japan, and overseas concerns in the attempt to "globalize" our economy--read that, cheapen the value of the American Dollar, and take American workers out of the loop, in the interest of increased personal profit..Don't buy their brand of "supply side" economics--that is what got us into trouble.

Obama/ Biden as an alternative to the rich getting richer and the middle class getting the "golden screw."

Intrade said...

LJR said :

    Earth to Kudlow --

DROP DEAD GOOD BUDDY

Intrade said...

FGFM said :

    Why do you guys feel the need to give this crackhead a platform?

Intrade said...

dr461 said :

    I almost don't want to give him a platform, but since all of the screams of "socialism" and "the share the wealth bullshit," it is necessary to answer those morons. Palin's hysterical rants go unanswered, and she comes off like a "national socialist" from the '30's---remember them? Hate everybody who is "different."

Intrade said...

bruceOHIO said :

    drinking the BLUE KoolAide I see. IF you THINK we can TAX our way out of this, you ARE hopeless.

""hazeNYC, 'I rather pay 1% more of my income to have a stable, safe, and prosperous America,""

1% ??? please share what you have been smoking. Allowing all the tax CUTS to lapse will quardruple (easily) that 1%.. AND allowing the tax cuts to lapse WILL RAISE the tax burden on the "middle class". AND TAXING MORE will STILL be a drop in the proverbial bucket because the Dem Platform includes 1 TRILLION in NEW SPENDING. We can NOT spend our way out of any deficit !!

beware America, TRICKLE UP POVERTY is the Obama Plan. ALL of those PRE ELECTION slogans like "TAX CUT for 95% of Americans" will VANISH in growing DEBT.

The MOST amazing thing to ME is people STILL do NOT understand, CONGRESS spends the MONEY (like drunken sailors usually).

The MOST President Bush could have done is VETO the Congressional SPENDING. Although, I DO wish he had pulled out that VETO pen years ago.

RAISE YOUR HAND if YOU we're more optimistic about our Government TWO YEARS AGO !!

which PARTY was in control of Congress/Senate for the last TWO YEARS ??

Intrade said...

bruceOHIO said :

    typo correction ;)
RAISE YOUR HAND if YOU were more optimistic about our Government TWO YEARS AGO !!

which PARTY was in control of Congress/Senate for the last TWO YEARS ??

Intrade said...

jhr00000 said :

    Capital gains tax cut? How is this suppose to help the economy? Is there anyone left that actually has a capital gain to tax? The capital gains tax rate is effectively zero, because 99% of us have a net capital loss position.

Intrade said...

dr461 said :

    BruceOHio is very much the "Joe the Plumber" type of mentality---true blue collar, with delusions that he's investor class, when he's working class, and not benefitting from the "feed the rich" mentality of Bush/Cheney/McCain.

Intrade said...

Luke said :

    Larry Kudlow is always wrong about everything. I notice that he stopped talking about the "Goldilocks" economy a few weeks ago. What a loser.

As far as "redistributor," my 401K already redistributed about 40% of my retirement funds to the speculators who shorted the market.

Intrade said...

seth manapio said :

    Kudlow, taxing me less and you more does not equal taking your money and giving it to me. It equals letting me keep more of my money than you keep of yours. Since neither you nor McCain support a flat tax, you agree that this is a good idea in principle. So basically, McCain is defining "socialism" as a minute increase in a single tax bracket of a system that he supports, and you are supporting his doublespeak.

Now, I know you're lying about that, and you know you're lying about that. I wonder whether its occurred to you that there is something wrong with a position that forces you to become a liar?

Intrade said...

bruceOHIO said :

    dr461 said :
""BruceOHio [sic] is very much the "Joe the Plumber" type of mentality---true blue collar, with delusions that he's investor class, when he's working class, and not benefitting [sic] from the "feed the rich" mentality of Bush/Cheney/McCain.""

LOL I will turn OFF half my brain and still reply, detouring past your petty insults.

Explain HOW a government running a 500 BILLION dollar annual deficit already, CAN add ANOTHER TRILLION on top of that deficit... AND add another 830 BILLION dollars of bailout ??

> SPEND their way OUT of the INCREASING DEFICIT ???

Obviously you could not debate the pure logic, which is why you toss around insults without debating the original concept.

As witnessed by the FACT that Senator Obama has ALREADY CHANGED the 'target' Income level of his promised "no tax increase" group.

For MONTHS he promised "UNDER $250,000 NO TAX INCREASE". Guess WHAT ? Now the "safe" amount has ALREADY been reduced 20%. If you are under "$200,000 no tax increase". By the way, Senator Obama's FIRST stated number was actually "$300,000".

Therefore, IN FACT, one campaign PROMISE from Senator Obama is ALREADY BROKEN. How many people were PROMISED "$250,000" ??

Mark my words. Obama is going to RAISE everyone's taxes, DRAMATICALLY.

**The Democratic/Obama PLATFORM IS > "let Bush's tax cuts for the rich EXPIRE".

If your income is $50,000 annual (and single taxpayer), the "Bush Tax Cut" reduced your federal income tax from $10,581 in 2001 to $9,231 in 2004. SOURCE: IRS tax tables

Real median household income in the United States climbed between 2005 and 2006, reaching $48,200, according to the report released by the U.S. Census Bureau. The second consecutive year that income rose. SOURCE: US CENSUS BUREAU

By definition; middle class Americans WILL pay more taxes if the Democrats let the tax cuts EXPIRE. The Democratic Party has PREACHED that expiration INCESSANTLY.

IF you want to actually LOOK at the NUMBERS to see how YOUR taxes are GOING UP. I DARE you to look and understand the NUMBERS. There is a CHART at the end of this article:
http://www.americanthinker.com/2008/10/senator_obamas_four_tax_increa.html

I will surely stand shoulder-to-shoulder with Joe-the-Plumber in one thing:

When any budget, be it personal, business, or government, SPENDS more than their INCOME, you can either CUT SPENDING quickly, or you FAIL. Joe is WORRIED about another big spender. Yes. So am I.

HOW DID Social 'SECURITY' become BANKRUPT ??? Who IS RUNNING THAT ?? HOW DID FANNIE & FREDDIE go BANKRUPT ?? Who is running THAT ??

Tell me ONE Government Agency that IS what was PROMISED !!

Social Security, Fannie/Freddie, the VA ??? I will cease the list for brevity's sake. Wait until they socialize ALL healthcare. They will under-estimate the COST and OVER-ESTIMATE the VALUE & results.

For those who read and actually think about this reply and my earlier one. Congratulations and thank you. My respect to you. I hope you do pause to reflect and do a little more research.

"The mind, once expanded to the dimensions of larger ideas, never returns to its original size." -Oliver W. Holmes.

Intrade said...

goose said :

    Your lame, out of touch with reality, bigot blog...is wearing threadbare and echos hollow.

It is your generation and your genre, that have brought us to these shores..you and your kind

you cannot escape, we will find you and treat you the way in which you so richly deserve.

We have had our america sold out from under us, and you were an active part of that..

we will not forget you and we will watch and.......

Intrade said...

SteveMDFP said :

    Capital gains tax rates of under 10 percent are needed, but payroll taxes of 30 percent are fine? You crow about how great it is to have investment rewarded...why so little concern about how work isn't rewarded?

The charge against Obama about "redistribution" are completely bogus. ALL TAX redistributes wealth, by definition. Taxes take money from some, and give it to others. The question is who should be paying how much, who is most able to pay, and whose needs can be met by no other source than governement help.

Investors do need action, though. They need re-regulation of the financial industry that has become like a casino. Worse than a casino. If you walk into a casino, at least you know exactly how badly the odds are stacked against you.

Intrade said...

Grew up in USSR said :

    The Union of Soviet Socialist Republics had a flat income tax rate of 13% and no sales taxes. Very Socialist, indeed, just like Kudlow wants it. The republicans are the biggest socialists of all, starting with Steve Forbes, apparently.

Intrade said...

the VAT said :

    many countries in Europe have the VAT (Value Added Tax) on everything from a pack of gum to clothing to a car and yes it's much higher than our sales tax is usually but it gets the job done and pays for services!!

Intrade said...

dr461 said :

    Talk about redistribution--the biggest re-allocators of wealth have been the Repubes, especially the "Wall street mafia." As an investor and not a CEO, or executive of a financial institution, I have to rely on my own research and advice from professionals. When the pros have insider knowledge, and use their ability to massively sell short and buy option contracts for a down market, they control and manipulate the prices of securities massively. This is one way that many "big shots" have gotten rich off of the down market, or cut their losses in ways the average individual cannot. So, is that not a form of totalitarianism, in which the few control the many by way of specialized interests not available to the average individual? Sounds like the oligarchical Repubes have been rather National Socialist in the process of controlling bear markets.

Also what is with McShame's campaign slogan? "Country first?" Though he and the hysterical Alaskan were Christians, or at least pandering to the religious right. I thought Christians ( I am one of them) were supposed to put God first, and"love the Lord with all thy strength and all thy heart, and love thy neighbors as thyselves." So, it would be blasphemy for them to use that slogan if they're ostensibly religious.

Intrade said...

Realist said :

    Hyberbole .. who is ever in office will be delugwd by the need for more tax revenue to support manadated spending. Cutting or raising taxes is the reddest of the red herring issu

Intrade said...

cbc said :

    Give it a rest Kudlow. Move on to something you have expertise in. Your political input is pure partisan hack. Totally useless at this point.

Intrade said...

icarriere said :

    This site is full of leftist schmucks who are likely on the Obama payroll. If not, they've put all there money down on Obama. How sad they'll be when McCain wins the 2008 Presidential Election.

Intrade said...

JeffPA said :

    Consider this before voting for another demagogue promising another government handout:

A democracy is always temporary in nature; it simply cannot exist as a permanent form of government. A democracy will continue to exist up until the time that voters discover that they can vote themselves generous gifts from the public treasury. From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse due to loose fiscal policy, which is always followed by a dictatorship.

The average age of the world's greatest civilizations from the beginning of history has been about 200 years. During those 200 years, these nations always progressed through the following sequence:

From bondage to spiritual faith;
From spiritual faith to great courage;
From courage to liberty;
From liberty to abundance;
From abundance to complacency;
From complacency to apathy;
From apathy to dependence;
From dependence back into bondage.

Check out Alexander Fraser Tytler on wikipedia

Intrade said...

Dew Boy said :

    Kodlow, will you still be buy and hold freak at dow 5000. Oh thats right were backstoping the rich now. Larry are you a socialist? Comrade you have red tie? Oh Im not a leftist, just a realist looking at a facts. You have realy hurt people.

Intrade said...

littlebigtrain said :

    Kudlow,Cavuto,and the like never met a tax cut they did not like if it benefits them. Let's cut taxes 100 percent and watch the deficit shrink! Their selfish ways do not work. Republicans use to pretend to be about small government and balanced budgets. Now they don't even pretend. OBAMA!

Intrade said...

littlebigtrain said :

    Bruce Ohio are you frickin kidding. Democrats just got back Congress two years ago. They have been blocked by the worst administration in modern history and the do nothing Republican Congress that proceeded them.

Intrade said...

Freeranger said :

    I'm a free market guy so I generally agree with McCain's economic policies more than Obama's, but I still fail to see exactly what McCain would do differently than Bush. McCain keeps talking about bailing out irresponsible homeowers which is also redistribution of wealth from those who saved and lived within their means and, heaven forbid, RENTED domiciles.

There aren't any capitalists left. Neither party will be straight with the people and tell them the truth about money.

Intrade said...

ohioan said :

    Your single issue -- taxes -- rates your political input as high as those who vote on other single issues (abortion?).