So Senator Obama did two very good interviews with Brian Williams on NBC Nightly News and Wolf Blitzer on the Situation Room on CNN. I thought he hit a total home run with Williams--he was focused, funny, substantive, and his usual self. But I would argue that his interview on CNN didn't go as well, and I want to point out one area, specifically, that I thought he really missed an opportunity--on taxes and capital gains. But first, the background of what McCain said about Obama's plan.
McCain said:
Sen. Obama wants to raise the capital gains tax, which would have a direct affect on a hundred million Americans...That means he has no understand of the economy and that he is totally insensitive to the hopes and dreams and ambitions of a 100 million Americans who will be affected by his almost doubling of the capital gains tax.
What John McCain is referring to is a bold-faced lie that Obama's plan will directly affect anyone who holds a 401k or Roth IRA. His claim is saying that 100 million people out of roughly 300 million (or 33%) would be affected. But the truth is that tax code affecting IRAs and 401Ks is designed to encourage people to save for their futures by special treatment that keeps people from paying capital gains taxes. That is part of the reason they have been so successful and popular. But in Obama's interview with The Wolfman, instead of explaining what the truth is (which is one of Obama's best traits) he decided to make reference to past GOP attacks in an effort to try in undermine them.
BLITZER: Because they're arguing already that you want to increase capital gains taxes, for example, on investments, and stocks, and things like that.
(CROSSTALK)
BLITZER: A lot of middle-class people have those kinds of accounts. If they're...
OBAMA: If they have--Wolf, if they have a 401(k), then they are going to see those taxes deferred, and they're going to pay ordinary income when they finally cash out. So, that's a phony argument. And this is something that you have seen the Republicans consistently do, is they try to make this broad-based argument about, he's going to raise your taxes as a cover for them eliminating taxes for people like myself and you, who can afford to pay a little bit more in order to assure that we have got roads and bridges that are rebuilt, in order to assure that Social Security is solvent, in order to make sure that kids who are struggling for their American dream can actually go to college, in order to make sure that people aren't going bankrupt just because somebody in their family gets sick.
You know, what--as I travel around the country, what I'm actually convinced of is that people recognize that if only 1 percent of the population is doing well, when we have got wages and incomes for the average worker actually going down during a period of economic expansion, much less economic recession, that something's being mismanaged. And they want a difference--a different approach. And that's what we're going to be offering them.
And John McCain is essentially offering four more years of the same policies that got us into this rut that we're in right now.
Obama does point out that 401Ks are tax-deferred, but I think the details of this issue is what makes the stronger point against McCain and the greater GOP strategy of the past. FactCheck.org (I love those guys) did a great piece explaining exactly who is affected by any changes to the capital gains tax structure, and here is their verdict:
Just under 13 percent of all who filed tax returns for 2006 reported any capital gains income, however small. That means that raising capital gains tax rates could not affect 87 percent of all filers, since they have no gains income to tax. (Capital gains are the profits realized from the sale of such assets as stocks or real estate.)...of those returns that had capital gains income [only 13% of all filers], less than 36 percent showed adjusted gross income of less than $50,000...To get a better idea of who would pay the most if capital gains rates went up, look at who gets the most capital gains income. More than eight dollars of every 10 in capital gains goes to those making more than $200,000 a year. Those are the tax filers who, overwhelmingly, would be affected by any increase in the rates, even if there were no exemptions such as Obama proposes.
What FactCheck.org also points out is that the total of all capital gains claimed, only 11% made less than $100k in 2006. I would have loved to hear Obama show just how well he understands who this is affecting by explaining the high points of these details--only 13% filed a return with capital gains, and this overwhelmingly affects those making over $200. I think one of Obama's biggest appeals is that he has a very strong ability to see the big picture and explain the details of that in plain English so everyone can understand it. But in this example he, in my view, missed an opportunity that he needs to hit home.