Thursday, October 16, 2008

Obama Senior Advisor Does Not Understand Income

This is no surprise but it is further evidence of either the utter dishonesty of the Obama campaign or their utter lack of real world knowledge. Stephanie Cutter, a "Senior Obama Advsor" was just on FOX News trying to explain the Obama campaign's recent idea to attack an American citizen with the temerity to ask Obama a serious question. In her FOX interview Cutter was asked whether each dollar that Joe the Plumber makes over $250,000 would be taxed at a new, higher rate? Cutter's response was (paraphrased) "no, Barack wants to lower taxes for small businesses, and he will pay a lower capital gains rate so his taxes won't go up." Now in all fairness to Ms. Cutter her boss Senator Obama has been saying much the same thing.

There are some big problems with all this, for starters the only "capital gains" that Joe the Plumber would declare would be from the sale of all or part of his business. Furthermore, as I am sure Mr. Obama knows, most small businesses are set up as an "S-Corporation". The business files a return, form 1120S with the profit being declared on the owner's form 1040 (line 17). In addition to being dishonest on the subject it should be noted that during the past decade small businesses that file as S-Corporations have been very important job creators. Obama wants to pluck the geese that have been laying the golden eggs in our society.

Good Lord, Mort Kondracke just said the same thing concerning capital gains, business income is not a capital gain.

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4 Comments:

Blogger Publia said...

Am I understanding this right that Barack Obama and Mort Kondrake don't understand the difference between ordinary income (and the resultant tax treatment) and capital gains income (and its tax treatement)? I am choking, though there are several other ways that Joe could be declaring capital gains, but it sure would not be from the sale of plumbing services.

6:55 PM  
Blogger El Rider said...

Both the Obama advisor and Kondracke used the lowering of capital gain taxation as one reason that Joe the Plumber would pay less tax than he seems to believe. I have also heard Obama throw some sort of capital gains break in as helping companies. Let's face it, Obama is all over the place, I just hope that Kondracke simply misspoke because you are right, an ongoing service business wouldn't normally have capital gains.

I don't know who he is kidding with talk of tax breaks, especially capital gains.

9:07 PM  
Blogger Publia said...

And the Democrats are busy bashing Sarah Palin when their standard bearer doesn't understand the basic kindergarten stuff about taxes? This is serious stuff, and I can't believe that the MSM doesn't pick up on this.

7:05 AM  
Blogger knowitall said...

These are the people who will surround the Ivy-Leaguer as he assumes the most important role of the country. It's bad enough he'll be surrounded by the elitist illuminati politicians who are ruining our economy.

6:51 PM  

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