Capital Gains Tax (The Fuzzy Math of John McCain, Part 1 In an Unending Series)

At last, a nice speech wherein John McCain dissembles on the issue of who pays how much in tax.

Senator Obama's plans would add to the difficulties of small business in other ways, too. Currently, there are the 21.6 million sole proprietorships filing under the individual income tax. When Senator Obama talks about raising income tax rates on those making over 250,000 dollars -- that includes these businesses as well.

Well, yes, but how many sole proprietors actually net $250,000 a year? Certainly not 21.6 million, since less than 5% of American households earn more than $150,000 per year. So the odds are that Mr. Small Business owner need not worry about his taxes going up. Next comes my favorite bit:

He also proposes increases in dividend and capital gains taxes. Under Senator Obama's tax plan, Americans of every background would see their taxes rise – seniors, parents, small business owners, and just about everyone who has even a modest investment in the market. [emphasis mine]

Charlie Gibson tried to get in on the populist ownership of stock. But look: capital gains is paid overwhelmingly by rich people. Most workers, if they have any "modest investment in the market", make that investment through some tax-favored vehicle like a 401(k). As you can see in the CTJ's table, the bottom 90% of the income distribution earns less than 10% of the capital gains.

In addition, as the Obama campaign points out, small business owners are affected much more by the financing of American health care, which has made it impossible for small businesses to compete with large businesses for benefits. McCain does nothing on this score, while Barack Obama does ... much more.

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[low-tech cyclist]

But...but McCain's a straight talker! So what he said must be straight talk!
--Broder & Hiatt