Transcripts

Economic Choices 2008 - Discussion & Debate About Barack Obama's Tax Plan

SUSIE GHARIB: In Denver tonight, Senator Barack Obama will be in the spotlight, delivering his acceptance speech as the Democrats' nominee for president and his plan for change for the nation. There has been considerable debate about his tax plan. Washington bureau chief Darren Gersh spoke with some experts about what they know and don't know about Obama's tax proposals for business and investment.

DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: At many of his campaign stops, Barack Obama praises the spirit of small business in America. And then he makes this promise.

SEN. BARACK OBAMA, (D) PRESIDENTIAL NOMINEE: So if you've got a start up business, if you've got a new business, I don't want you paying taxes like capital gains because you need to go ahead and get started on your business.

GERSH: But like so many things in this presidential campaign, the details are hard to pin down. The Obama campaign also says small businesses won't pay capital gains, but tax expert Len Burman says Obama has never defined what he considers a small business to be. Burman says the lack of specifics is a problem with many Obama proposals.

LEN BURMAN, DIRECTOR, TAX POLICY CENTER: Many, if not most of the details, haven't been specified. It is more of a vision of where he would get his revenues from.

GERSH: Here are the tax increases Obama has laid out: close corporate loopholes worth $76 billion a year; slap a windfall profits tax on oil companies; raise taxes on so-called carried interest earned by hedge fund managers; force employers who do not offer health insurance to pay into a national fund to provide coverage for their workers. On the tax cut side, Obama offers a refundable health tax credit to small business. There's also that zero capital gains rate for small business. And Obama would make the research and development tax credit permanent. Add it all up and Burman reaches this conclusion.

BURMAN: What appears to be the case is that he wants to increase taxes on businesses overall as a way to pay for other priorities or to reduce the budget deficit.

GERSH: On the investment side, Obama has proposed raising the capital gains and dividend tax rates from 15 percent to 20 percent for those making more than a quarter of a million dollars a year. That's just about where the rate was five years ago. When he looks at that and all the other Obama proposals, economist Martin Sullivan concludes the impact will be small potatoes.

MARTIN SULLIVAN, ECONOMIST, TAX ANALYSTS: We're going to noodle around on the sides, give a few tax breaks here and close some loopholes there, but the overall complexion of business taxation is not going to change. GERSH: So while Obama is running as the candidate of change, his business and investment tax policy could be fairly described as a re-run of the Clinton years. Darren Gersh, NIGHTLY BUSINESS REPORT, Washington.