Legion of Angels News Archive

(CNNMoney.com) – In speech after speech, presidential candidate John McCain hammers on the claim that his rival Barack Obama will raise taxes on many small businesses.

At the debate on Wednesday night, McCain said, “The small businesses that we’re talking about would receive an increase in their taxes right now.”

More typically he has said: “What [Obama] hasn’t told you is that he would tax half of the income of small businesses in America,” a line used in La Crosse, Wisc., last week.

Should small business owners fear for their wallets if Obama is elected? Not the vast majority, business and tax experts say.

To make its claim, according to a McCain spokesman, the campaign counts as a small-business owner any taxpayer who files a Schedule C, E or F - the forms used to report gains and losses from business ventures and farms.

Using that definition and citing IRS data, the campaign notes that “56.8% of total small business income is earned by businesses in the top two rates, which Barack Obama has pledged to raise.”

It’s true that Obama has proposed raising taxes on the top two income rates.

But there are three main problems with McCain’s charge.

What is a small business?

First, it relies on a broad definition of what counts as a small business, including everyone who files a Schedule C, E and F.

But most people who file those forms don’t run a business for a living: Those forms are also used to report income from freelance and consulting work, real-estate rentals, and most other non-salary sources.

For example, McCain and Obama both file Schedule C returns, thanks to their book royalties - but they hardly should be considered small business owners.

In 2005, there were 21.5 million Schedule C returns filed, according to the IRS.

A more realistic definition of small businesses turns up far fewer firms. The Small Business Administration estimates that there were 6 million small businesses in 2005, as measured by those with fewer than 500 employees and with staff on the payroll other than the owner.

Who pays?

Second, even using the broad definition of small business that McCain likes, very few owners would see their own taxes rise.

That’s because the lion’s share of taxable income comes from a small number of wealthy businesses. Out of 34.7 million filers with business income on Schedules C, E or F, 479,000 filers fall into the top two brackets, according to an analysis of projected 2009 filings by the nonpartisan Tax Policy Center.

The other 34.3 million - or 98.6% - would be unaffected by Obama’s proposed rate hike.

That includes Joe “The Plumber” Wurzelbacher, whom McCain invoked nearly two dozen times at the debate Wednesday night to illustrate the plight of the average worker and small business owner.

“Joe wants to buy the business that he has been in for all of these years … he wanted to buy the business but he looked at your tax plan and he saw that he was going to pay much higher taxes,” McCain said.

In an interview afterward with WTOL, Wurzelbacher acknowledged that he’d still like to eventually buy the plumbing company he works for but that he wouldn’t yet be hit by higher taxes.

“I want to set the record straight: Currently I would not fall into Barack Obama’s $250,000-plus,” he said. “But if I’m lucky in business and taxes don’t go up then maybe I can grow the business and be in that tax bracket - well, let me rephrase it. Hopefully, that tax won’t be there.”

Few owners are that lucky in business. In a member survey conducted late last year, the National Federation of Independent Business (NFIB) found that only 14% of respondents said they had $200,000 or more in annual income.

As Tax Policy Center fellow Len Berman recently told Fortune Small Business: “Most owners of small businesses have small incomes.”

What gets taxed?

Third, even if you’re one of the rare business owners making enough money to be affected by Obama’s proposed tax increases, you still won’t see a big hike in your tax bill.

McCain’s claim that Obama “will increase taxes on 50% of small business revenue” - the line he used in the second presidential debate - is incorrect because of how income is taxed.

If a business owner falls into the top bracket, that doesn’t mean that all of his or her income is taxed at the highest level.

For example: If a small-business owner makes $210,000 in taxable income, he edges into the 33% bracket, one of the two top tax rates that Obama would like to raise.

But he would pay the higher tax only on the amount that exceeds the cutoff - in 2007, the two top tax rates applied to single filers with income of $160,850 or more and joint filers with income of at least $195,850. As a single filer, this business owner would see his federal taxes increase $1,475 under Obama’s plan, which calls for raising the 33% tax rate to 36%.

“While Obama does favor raising the top two rates, the quote is not true because not all the small business income of those in the top two rates is taxed at the 33% and 35% rates,” said Gerald Prante, a senior economist at the nonpartisan Tax Foundation.

The bottom line: McCain’s claim only works by using an overly broad definition of what counts as a “small business” - and even with that definition, fewer than 2% of business owners would be hit by Obama’s proposed rate increase. For those who are affected, the increase would be levied only on a part of their earnings, not all of them.

Source — CNN

AS BARACK OBAMA and John McCain move into the final two months of this longest of elections, white evangelical or “born again” Christian voters are being fought over more fiercely than at any time in modern history. Both parties employ evangelical outreach specialists. Both are spending a lot of time courting evangelical leaders. And both are holding meetings with “values voters” to try to reassure them.

The Democrats have at last realised that it is foolish to write off a group that makes up an astonishing 23% of the population. In 1988 Michael Dukakis could hardly bring himself to speak to evangelicals. This year all the major Democratic candidates have cuddled up to them. Mr Obama says that he is “somebody who really has insisted that the Democratic Party reach out to people of faith”. His staff has already conducted more than 200 “American values forums” or faith-themed town-hall meetings. The aim, of course, is not to win the evangelical vote: merely chipping away at such a monolith could be hugely useful.

The Democrats have had good reasons for thinking that they may be able to make inroads. Many evangelicals are disillusioned with George Bush: polling by the Pew Research Centre shows that less than half of white evangelicals (47%) approve of his performance compared with 48% who disapprove. (All polls quoted in this article are by Pew unless otherwise stated.) The 2006 mid-term election was terrible for the evangelical right. Its heroes, like Rick Santorum in Pennsylvania and Kenneth Blackwell in Ohio, went down in flames. The Democrats have recruited muscular Christians of their own, including Tim Kaine and Ted Strickland, governors of Virginia and Ohio respectively.

Many evangelicals have also long been uncomfortable with Mr McCain, a man who cannot decide whether he is an Episcopalian or a Baptist. Mr McCain denounced Pat Robertson and Jerry Falwell, two veteran evangelical leaders, as “agents of intolerance” in 2000. This time round, he first courted and then rejected the support of two prominent evangelicals, John Hagee and Rod Parsley. The only thing that the evangelical leadership could agree on during the Republican primaries was that they wanted anyone but Mr McCain. Just 28% of white evangelicals described themselves as “strong” backers of him in August, compared with 57% who said the same thing about Mr Bush four years ago.

Yet even with all this going for them, the Democrats are operating in hostile territory. White evangelicals are the most Republican religious group in the country, with 62% of them leaning Republican, compared with 38% of all voters. Their support for the Republicans is higher than it was in 2000, and also higher among the under-30s than the over-30s: 64% of young evangelicals lean Republican compared with 29% who lean Democratic.

This general preference for the Republicans over the Democrats has also translated into a preference for Mr McCain (for all his faults) over Mr Obama (for all his religion-friendly rhetoric). White evangelicals in general prefer Mr McCain to Mr Obama by a margin of 44 points (the figure for Bush versus Gore in the summer of 2000 was only 30 points). Among white evangelicals who go to church more than once a week, the gap is 54 points. Much of this is driven by suspicion of Mr Obama. Only 27% of this group believe that the deeply religious senator from Illinois shares their values—a figure shaped partly by revulsion for his preacher, Jeremiah Wright, partly by the mistaken belief that Mr Obama is a Muslim, but mostly by his uncompromising support of abortion choice.

Mr McCain’s biggest problem among evangelicals has been one of intensity rather than broad preference. The big question haunting the Republican Party has been whether the evangelical foot-soldiers could be bothered to do the grunt work or even turn out to vote (Karl Rove blamed Mr Bush’s election squeaker in 2000 on the fact that 4m evangelicals stayed at home when they heard of young George’s drunk-driving conviction). But over the past month or so Mr McCain has dramatically revved up the evangelical base.

Mr McCain has been laying the groundwork for this for some time. He appointed Marlys Popma, the former head of Iowa Right to Life, to run “religious outreach” in late 2006. He visited Billy and Franklin Graham in North Carolina, and Mr Falwell at Liberty University in Virginia. But three events supercharged his support among evangelicals.

The first was his appearance at Saddleback, a church run by the most popular evangelical in the country, Rick Warren. Mr McCain impressed the audience with his snappy answers and engaging anecdotes. Equally, Mr Obama disappointed them by being evasive about when he thinks life begins. Then came the publication of the Republican platform, a document that is considerably more conservative than it was four years ago, and which is notably uncompromising in its hostility not just to abortion and gay rights but also to stem-cell research.

But Mr McCain’s biggest coup by far was picking Sarah Palin as his running-mate. Mrs Palin is an evangelical convert—she was born a Catholic—who is deeply-rooted in the evangelical subculture. Her eldest son, Track, has a tattoo of the “Jesus fish” on his calf. She has pronounced opinions on abortion, gay marriage and creationism. The news of her selection was greeted with standing ovations from leaders of the religious right and near-hysteria on Christian radio stations.

Can Mr McCain ride an energised evangelical base into the White House? He is certainly much better off now than he was a month ago, before the evangelical surge. But he nevertheless confronts two big problems. The first is that evangelical issues have less resonance with the general public than they did in 2004. There has been a decline in support for traditional morality, an uptick in hostility to the involvement of the church in politics, and an increase in support for social welfare. Catholics in particular are shifting back into the Democratic camp. The second is that Mrs Palin and her supporters may energise America’s secularists while also putting off swing voters (who are likely to be troubled by Mrs Palin’s hostility to abortion even in cases of rape and incest). The big problems now facing Mr McCain may not be too little enthusiasm among evangelicals, but too much.

Source — The Economist

NEW YORK - Presidential candidates John McCain and Barack Obama made ground zero their common ground for one rare day, free of politics and infused with memory. Putting their partisan contest on a respectful hold, they walked together Thursday into the great pit where the World Trade Center towers once stood and, as one, honored the dead from the terrorist attacks of Sept. 11, 2001.

They walked down a long ramp flanked with the flags of countries, chatting at times, silent other times, and sharing a quick laugh at one point. Right behind them, Cindy McCain clutched Mayor Michael Bloomberg’s arm — Michelle Obama was with her daughters in Chicago.

At the bottom of the ramp, the two rivals stopped to talk with a small group of relatives of the attacks’ victims of seven years ago. They laid flowers at the pit’s commemorative reflecting pool — a pink rose from Obama, a yellow rose from McCain — bowed their heads and walked off to speak with fire and police personnel. There were no speeches.

“Thanks, we’ll see ya,” McCain told Obama as the Democrat patted the Republican’s back and they shook hands and parted.

Earlier, McCain spoke briefly at a simple ceremony in remote, rural western Pennsylvania, held on a large hilly field close to where United Airlines Flight 93, the third of four airliners commandeered by terrorists, crashed. Investigators believe some of the 40 passengers and crew rushed the cockpit and thwarted terrorists’ plans to use that plane as a weapon like the ones that hit the World Trade Center and Pentagon. All aboard all planes died.

The Arizona senator said those on the flight might have saved his own life, as some believe the terrorists wanted to slam that plane into the U.S. Capitol. He said the only way to thank those who died on the flight is to “be as good an American as they were.”

“We might fall well short of their standard, but there’s honor in the effort,” McCain said.

Obama, in a statement, said that on Sept. 11, 2001, “Americans across our great country came together to stand with the families of the victims, to donate blood, to give to charity, and to say a prayer for our country. Let us renew that.”

The Illinois senator added: “Let us remember that the terrorists responsible for 9/11 are still at large, and must be brought to justice.”

Left unsaid by both was their sharp disagreement over the Iraq war, which McCain supported and Obama opposed as a distraction from the Afghanistan war and broader fight against terrorism.

It was not a day for spelling out differences but rather a respectful time-out in an otherwise heated campaign with 54 days to go. Both agreed to suspend TV ads critical of each other.

In Pennsylvania, grieving family members and a few dignitaries sat in front of a chain-link fence adorned with flags and mementos that serves as a temporary memorial while a permanent one is built. Bells were rung as each victim’s name was read. McCain and others laid wreaths at the foot of two flagpoles and a large wooden cross.

The political truce was evident in remarks thanking McCain for traveling to Shanksville by Pennsylvania Gov. Ed Rendell, a Democrat who occasionally speaks against the Republican nominee as an Obama campaign surrogate. “It’s an honor to have him here, not just as a presidential candidate but as a great American patriot,” Rendell said.

Another display came near the ground zero pit, as McCain adviser Mark Salter huddled with Obama spokeswoman Linda Douglass, a former ABC News correspondent, to discuss Sarah Palin’s interview Thursday with the network.

Obama and McCain were intersecting again later, at a Columbia University forum on public service in the evening. Their sessions at the forum were separate, joined only by a handshake.

At the Twin Towers site, Bloomberg told them time was running out to touch the bedrock at the base of the pit. “This is the last year because the ramp goes away for the rebuilding,” he said.

Officials said the family members Obama and McCain talked with were Mary Fetchet, whose son Brad worked on the 89th floor of the South Tower; Michael Henry, brother of firefighter Joseph Henry; Joanne Langone, widow of policeman Tom Langone; and Maggie Lemagne, sister of Port Authority officer David Lemagne. Brian Cichetti, a World Trade Center site safety manager who is working on construction of the memorial and museum, also was with them.

At the top of the ramp on the way out, McCain and Obama shook hands with police officers.

“Appreciate everything you do,” Obama said. “God bless you all. We think about you this day and every day.”

Obama’s running mate, Joe Biden, visited an American Legion post in suburban Cleveland for an invitation-only gathering of area police, firefighters and other first responders.

“Part of today is reminding Americans that every single day there are acts that are both ordinary and profound,” Biden said in recalling the attacks. “You suit up, head out on that vehicle not knowing what you’re going to find. If, God forbid, anything remotely close to that happens, it’s going to be you guys trying to save all of us.”

Palin, the Republican vice presidential candidate, was in her home state of Alaska to attend an Army ceremony to send her eldest son, Track, off to duty in Iraq.

Obama and McCain last appeared together in August when they shook hands at minister Rick Warren’s megachurch in Orange County, Calif., and spoke separately about faith and values. In June, they attended the funeral of NBC newsman Tim Russert, sitting next to each other at the family’s request.

Source — Yahoo!

Bill Clinton and Barack Obama had lunch at Clinton’s Harlem office today, where Clinton predicted Obama’s victory and said he’d do whatever he’s asked to do.

From the pool report:

President Clinton was asked when he will hit the campaign trail for Sen. Obama.

“I’m going out there as soon as my Global Initiative is over.’’

Sen. Obama added, “We’re putting him to work.’’

Q: “Will you be out frequently?”

“I’ve agreed to do a substantial number of things. Whatever I’m asked to do.’’

Q: “What do you think of the state of the race?”

President Clinton: “I predict that Sen. Obama will win and win handily.’’

Sen. Obama: “There you go. You can take it from the President of the United States. He knows a little something about politics.”

They had sandwiches and flatbread pizza from Cosi, according to the report.

Source — Yahoo!

HARRISBURG, Pa. - In an election where so many voters are hungry for “change,” both candidates are trying to position themselves as the one who can deliver it in Washington. Barack Obama has made famous the tagline “change we can believe in.” The first word in one of John McCain’s oft-used campaign slogans is “reform,” and in recent weeks on the stump he has begun emphasizing his reputation as a “maverick.”

But reading between the lines this week, voters may have gotten a glimpse of who the real reformer is. Although the public back-and-forth between McCain and Obama has focused mostly on energy, residing at the root of the candidates’ political attacks may be a fundamental difference in their style of governance.

This most recent debate started around the time McCain released an ad stating that Obama would support an “energy tax” if elected president. This point came from an interview that the Illinois senator did with the San Antonio Express-News in which he was asked about increasing taxes on wind power to fund education. “What we ought to tax is dirty energy like coal and, to a lesser extent, natural gas,” Obama said, but such a tax is not actually a part of his economic proposals.

Both candidates support a form of cap-and-trade in which polluters are allowed to emit only a certain amount of greenhouse gases but can purchase extra pollution credits from less-polluting companies. Because “dirty energy” producers would likely be forced to purchase additional credits, a cap-and-trade system could in some ways be seen as an “energy tax” — but then both Obama and McCain would be in favor of it. The only difference between them would be how high the cap and how expensive the credit.

Obama responded to McCain’s attack with an ad of his own alleging that the Arizona senator was “in the pocket” of the big oil companies and “wants to give them another four billion in tax breaks.” Although this is technically true, these tax breaks would come from a significant cut in the corporate tax rate across the board, which McCain argues would help spur growth and increase employment levels.

The apparent hypocrisy of Obama’s commercial was certainly not lost on the McCain campaign, which quickly pointed out that Obama had supported the last round of tax breaks for big oil companies contained in the so-called Bush-Cheney energy bill. According to an article in the Washington Post written at the time of bill’s passage, the Energy Policy Act of 2005 included “an estimated $85 billion worth of subsidies and tax breaks for most forms of energy — including oil and gas,” renewable energies and nuclear power.

McCain refused to support the president’s bill, and at the time said his opposition was due to the large number of funding packages targeted at special interests — specifically Big Oil. He even mused to his colleagues in Congress at the time: “I wonder what it’s going take to make the case for fiscal sanity here?”

Although Obama voted for the bill, he too remarked that he felt the bill was misguided, saying in his speech on the Senate floor that he voted for the bill “reluctantly,” calling it “a step forward,” but “not a very big step.”

So while both senators saw major problems with the 2005 energy bill, Obama decided that the good aspects of the bill outweighed the bad, whereas McCain determined that voting against the good parts of the bill was necessary to send a message about pork barrel projects, which he has consistently criticized.

While visiting a nuclear power facility in Michigan last Tuesday, McCain responded to his opponent’s commercial and the allegation that he was in the pocket of Big Oil by criticizing Obama’s support for the energy bill: “I think he might be a little bit confused because when the energy bill came to the floor of the Senate, full of goodies and breaks for the oil companies, I voted against it. Senator Obama voted for it. People care not only what you say but how you vote.”

By Thursday he had found a much pithier message, telling a crowd in Ohio, “I know he hasn’t been in the Senate that long, but even in the real world, voting for something — voting for something means you support it, and voting against something means you oppose it.”

But the U.S. Senate isn’t quite the “real world,” and voting against something there doesn’t always mean you oppose all of it — especially when a bill is already certain to pass. In a place where compromise and concession are part and parcel of productivity, senators often feel forced to vote for bills they feel are less than perfect in order to achieve their ultimate goal. McCain is opposed to that practice.

“The system is so badly broken that they try to present us with a choice of voting for stuff that has pork barrel projects in it and some good things in it to force us to vote for them,” McCain told reporters on his plane last week when asked about his opposition to the energy bill. “I have consistently voted against those kind of entrapments because then pork barrel projects and the good deals and the benefits never stop.”

Obviously, McCain hasn’t said “no” to every bill that contained earmarks. In fact, he’s voted for specific earmarks that he regularly lambastes on the stump, including $3 million to study the DNA of bears in Montana (McCain often tells audiences that he isn’t sure if that was “a paternity issue or a criminal issue”). Still, McCain prides himself on his record of voting against bills that he sees as the products of a “corrupt” system, often bragging about his earmark-free tenure in Congress and promising crowds that he will put an end to the practice if elected president.

“Public money should serve the public good,” McCain told a crowd at the Disabled American Veterans conference in Las Vegas last weekend. “And if it’s me sitting in the Oval Office, at the Resolute desk, those wasteful spending bills are going the way of all earmarks, straight back to the Congress with a veto. And you will know their names and I’ll make them famous.”

Back on his campaign plane, McCain said that this is the fundamental difference between himself and Obama.

“There’s a clear difference between someone who nearly a million dollars a day proposes pork barrel projects and therefore would support a bill that has lots of pork in it,” McCain said, referring to the total value of Obama’s requested earmarks. “Between those of us who are reformers, who are trying to fix the system and saying, no, no, we’re not going to take the pork. We’re not going to take the special-interest deals that ends up with people in federal prison, with people indicted, and there will be more indictments…. So it’s a difference between the reformers and the ‘go along to get along’ system.”

It’s probably not fair to simply label Obama as a part of the “go along to get along” system, but his support of the 2005 energy bill suggest a willingness to play Washington’s game for what he sees as a greater good — or at least a “step” in the right direction. Although McCain has supported many compromises during his time in the Senate, and he has said that many of those bills did not turn out exactly as he would have written them, he has also been much more willing to vote against something because, in his view, the bad outweighed the good.

So despite the Obama campaign’s reliance on buzzwords such as “hope” and “change,” when it comes to reforming the system in Washington, Obama may actually be more of a pragmatist, while McCain may be the real idealist in the race.

Source — MSNBC