CNBC personality criticizes Obama, redefines ‘rich’

June 10, 2008

The McCain campaign has been pushing this New York Post item pretty hard today.

We’re in for taxing times if Barack Obama wins the White House, says CNBC’s Maria Bartiromo. “He’s going to take the capital gains tax at 15 percent right now all the way up to 25 to 28 percent,” the “Money Honey” tells Avenue. “Sell anything, like a home or stocks, and make a profit . . . [almost] 30 percent of the profit will go to the government instead of 15.”

The income tax is also in for a bump. Bartiromo says, “Right now [it] is 35 percent, Obama wants to take that to 39 percent . . . We’re talking about people who make over $200,000. That’s not rich. So it’s actually going to impact more people than you may think.”

Time and the Politico quickly featured the item, but neither added any context of fact-checking. That’s a shame, because Bartiromo’s mistaken.

First, the notion that people who sell their home for a profit will soon get hit with a 30% tax is just wrong. Profit on home sales are tax exempt on gains up to $500,000 for couples. Bartiromo, who should know this, makes it sound like this will apply to everyone, instead of a very select few who make a half-million-dollar profit when they sell their house.

Second, Bartiromo believes people who make over $200,000 are “not rich.” Is that so? Oliver Willis noted, “Median U.S. household income is $48,201. Yes, I hope conservatives take up this battle and run with it. This is what happens when people like Maria Bartiromo and John McCain surround themselves with fellow six and seven figure travelers — they lose all context for what the real world is like.”

For that matter, according a report from the Citizens for Tax Justice, “[I]n 2008, only 3.2 percent of taxpayers will have adjusted gross income (AGI) greater than $200,000 and only 2.1 percent will have AGI over $250,000.”

Ali at TP noted that Bartiromo “is making a seven-figure salary and just received a whopping $500,000 for her book advance,” which may skew her perspective a bit on what constitutes “rich,” but specifically questions why the McCain campaign thinks Bartiromo’s perspective is worthy of accolade.

The McCain campaign’s perception of American incomes is woefully out of touch. An income of $200,000 places an American family firmly in the “rich” category:

* The 2006 census showed that an income of $174,012 put an American household within the top 5 percent of income earners.

* A report by the Citizens for Tax Justice estimates that in 2008, “only 3.2 percent of taxpayers will have adjusted gross income (AGI) greater than $200,000 and only 2.1 percent will have AGI over $250,000.”

* A 2007 Wall Street Journal article placed earners who make $277,000 in the top 1 percent of all income earners.

And even that would only make this slightly embarrassing, were it not for the fact that McCain actually wants to base his economic policies on his confused worldview — most of the benefits of McCain’s “middle class tax relief” plan go to those in the top 1 percent.

That, Maria Bartiromo, is rich.

$200K is certainly more than most people are living on, but it’s all relative. If you define “rich” based on what people in the movies or on TV have, then it doesn’t go very far in many parts of the U.S. Housing costs can take-up a huge chunk of that in the major metropolitan areas on the coasts.

Nobody making that kind of money needs to feel poor but it isn’t exactly rich either. ymmv.

  • Maria is just doing the bidding of those people she is allegedly covering as a “journalist” while having affairs on their private airplanes.

    Because “Republican” means never having to say conflict of interest.

  • I want 200K a year, you can call me not rich all you want then, I’ll be happy paying taxes when I make that much

  • “This is what happens when people like Maria Bartiromo and John McCain surround themselves with fellow six and seven figure travelers — they lose all context for what the real world is like.”

    Exactly. They are surrounded by paid advisors, paid friends, paid consultants – all paid so the answer is never “no”, and nothing they can do wrong will ever be mentioned or even noticed. The next thing you know these “types” (thanks Bob Dole) find themselves marrying a 13 year old girl or boy, who happens to be their cousin. They smile and explain, “It’s ok, he/she DIGS me! Really, Mom, really!”

    Or they invade a non-threatening country because warfighting is so very romantic. And 3 trillion dollars, it really isn’t that expensive!

  • It takes a whole lot less effort for a person with $200K income to make the next K or to save the next K compared to one making 20 or 50K. Money is power. And Paris Hilton has way too much of that already. That’s really the scariest part of this whole issue.

  • Depending on where you live in the country it takes $200k/yr to stay in the middle class. I live in S. FLA and my buck-forty is barely cuttin’ it (family of 5). If I lived in the mid-west somewhere, I’d be sylin’.

  • Wow, $200,000 is not rich? I wish I were that not rich.

    Well, Maria, you’ve got a war to pay for. You broke it, you buy it.

  • In fairness, Danp, Paris Hilton probably spends $200K per day, not year. $200K includes a lot of kids fresh out of law school with $150K in student loan debt and a $1500 studio apartment in Manhattan or San Francisco. Not hurting for money, obviously, but not exactly living a Hiltonesque lifestyle, either.

  • casey (6) That’s an interesting point. You might not be making a buck forty in the midwest (I don’t know your circumstances), but Fed tax code does not take into consideration what essentially is a different currancy rate in different parts of the country.

  • There aren’t “two Americas”, there are actually three. Have-Nots, Haves, and Have-Mores. The Have-Nots are barely getting by. The Haves include middle-class and upper middle-class. The Have-Mores are probably the top 1%, or less, by income.

    During the Bush years, the Have-Nots and Haves are all getting stretched while the Have-Mores are flourishing.

    Given this, would the Republicans have any constituency left if money couldn’t buy power?

  • FWIW, Obama shouldn’t raise it as high as 25% or 28%. I think 20%, max, will increase revenue without causing a market crash, plus it will be more ‘fair’ in terms of hedge fund managers vs. their secretaries.

  • It’s hard for Republicans to comprehend that everyone doesn’t earn over $200K annually. They think that a tax increase on the > $200K crowd will result in a mob of peasants with pitchforks descending on Washington.

    For those Republicans who aren’t mathematically inclined, a median income of $48,201 means that half of all Americans get by on less than that. Or try to get by.

    Like one of our commenters said earlier, there are two kinds of Republicans: millionaires and suckers.

  • We’re in for taxing times if Barack Obama wins the White House, says CNBC’s Maria Bartiromo. “He’s going to take the capital gains tax at 15 percent right now all the way up to 25 to 28 percent….”

    It’s my opinion that a significant part of what’s wrong with the American economy is that investments are being made based on extremely short-term rewards. “Long term planning” seems to mean looking toward next quarter’s profits statements. When a company’s stock price goes up after it eliminates its R&D Dept. or lays off 10,000 workers, something is seriously out of balance.

    Here’s my modest proposal:

    Tax capital gains bases on how long the investment has been held. Tax gains on long-term investments — like family homes — which are held for more than 20 years at 10 percent.

    Tax investments held for at least 10 years at 15 percent.

    Tax gains from short-term investments held for less than 6 months at 40 percent.

    And tax gains from investments held for ridiculously short times, like less than seven days, at 70 percent.

    Let’s encourage Americans to think about the long term again.

  • Franklin,

    Actually not at that salary level. I’m not sure where the cutoff point is, but I can say from experience that a first-year law firm associate is well beyond it.

  • In fairness, Danp, Paris Hilton probably spends $200K per day, not year. $200K includes a lot of kids fresh out of law school… -JRD

    Also in fairness, the rate increase she’s talking about is only for what is made in excess of $200,000. So if you made $200,001, you’re tax on that dollar would change from $0.35 to $0.39.

    And if the student can’t afford a $1500 studio in Manhattan or San Francisco, they’ll just have to do what the rest of us do: commute. 🙂

  • Bartiromo “is making a seven-figure salary and just received a whopping $500,000 for her book advance,” which may skew her perspective a bit on what constitutes “rich,” but specifically questions why the McCain campaign thinks Bartiromo’s perspective is worthy of accolade.

    …but answers why Bartiromo thinks McSame’s economic policies are is worthy of accolade.

  • Based upon her other prognostications, if Maria Bartiromo says that Obama is going to raise the capital gains tax, then he’s probably going to lower it. That said, all of these crazy capital gains tax proposals are silly. Just tax it like other income.

  • um. . . JRD, you seem to have fallen into the Repub error of generalizing from your own experiences without recognition of how unique those may be.

    here in Nebraska/Iowa/Dakotas/Missouri-other-than-KC-and-StL starting associates in a mid-sized (for the market) defense/corporate side firm make $65,000-90,000 (and smaller, more rural, or more generalist/individual-rather-than-corporate firms pay even less). While this surely remains well above the average household, it is not $200,000 or even $140,000 – yet the student loands are still mighty high, in some cases nearly 100% of earnings!

  • Coastal,

    Actually, no, I didn’t. I didn’t say that all first-year lawyers make 200K; I said that a lot of people making 200K are first-year lawyers. Note the distinction.

  • Who the hell is selling their house for a profit these days?

    But yeah, here’s hoping McCan’t lines up the poor souls who are scraping by on 200K like Brownback with his snowflake babies.

  • Franklin,

    Student loan interest is deductable, but only if you make less than $90,000 a year or so. I’m one of those young fresh out of law school NYC lawyers that JRD was talking about. He’s pretty much right about my circumstances. I definitely live comfortably, but I’m not rolling in dough. Which is to say, I still have to make economic choices, but I’m usually choosing between two good outcomes (i.e. I can afford to either aggressively pay down my debt, or put more money in my 401k, not both) rather than trying to delicately balance buying just enough food so I still have enough money for gas and the power bill.

  • Is the point being lost here? Obama is going to raise taxes – on virtually everyone, whether it comes through the income tax, the capital gains tax, letting the other tax cuts expire, or raising the cap on social security tax. These increases don’t simply impact those making more than $200K. Go ahead and argue that the tax increases are justified; just don’t try to make me believe they will only impact the wealthy. That’s a demonstrable lie.

    If you think $200,000 is rich try affording a new home in Sunnyvale on that salary. (estimated MEDIAN prices of owner-occupied homes built in 2007 is $849,000). It’s awfully strange to define rich as someone who can’t qualify for a loan on a new home in San Jose (or Sunnyvale or Santa Clara or …)

  • Joel29028 has it right above. One reason the Republicans failed politically is that they are losing the support of the Haves. In the past they would be the party of the Haves and the Have-Mores. Now their policies only benefit the Have-Mores, which doesn’t leave much of a base. This year the Haves are moving to Obama (along with the Have-Nots.)

  • Is the point being lost here?

    Nope, it’s sailing over the flat surface of your head.

    Better spoofs PULEEZE!

    For anyone who is interested in reality here’s the USCB’s state-by-state breakdown of median incomes in 2006.

    California:

    California Estimate
    Total: 64,563
    2-person families 60,032
    3-person families 64,766
    4-person families 74,801
    5-person families 64,132
    6-person families 61,348
    7-or-more-person families 68,030

  • Yeah, but what percentage of people vote?

    What percentage of people who make over 200K vote?

    I think that’s what matters.

  • I had no idea that President Obama was going to be able to single-handedly raise taxes without the Congress. CNBC must think he’s going to be elected with the mandate to end all mandates!

  • For the answer is orange@26: Are you defining as rich anyone who makes more than the median income? Are you denying that Obama’s economic plan will increase taxes on those making less than $200K?

  • Go ahead and argue that the tax increases are justified; just don’t try to make me believe they will only impact the wealthy. That’s a demonstrable lie.

    And you do realize that tax cuts come with their own costs, as well, right?

    People tend to focus on the $300 check they get from George W. Bush. The fact that he spent $41million this year just letting people know the checks were in the mail probably helped. (Thanks for that money waste, fiscally-responsible Republicans!)

    But the associated rollback in government revenues leads to each of us paying much more than that $300 — in increases in state and local taxes, which are invariably raised to make up for the shortfall in revenues; for unseen costs as the infrastructure deteriorates; for added fees on everything under the sun, public and private.

    We’ve had seven years of tax cuts, including the first and third largest tax cuts in American history, and the economy is now in the toilet. The tax cut crowd got everything they wanted and more, and we’re worse off than ever. Only an utter moron would be clamoring for more of the same and think it would make things better.

  • The last statement by Bartiromo that the 35% rate is for people who make over $200,000 is as false or misleading as all of her other statements. For tax year 2007 (returns just filed) the current top federal personal income tax rate of 35% begins at the taxable income level of $349,700! She cites a figure of $200,000 which is grossly incorrect! Not one of her assertions are correct or valid. Facts are stubborn things!

  • The U.S. deficit is severely damaging the dollar, which hurts America’s buying power for oil and other economic inputs that it gets from abroad. Committing to deficit and eventually debt reduction, and making a reasonable beginning on that in the next presidential term, will restore a great deal of confidence in the health of the dollar.

    Its appreciation will go a long way to alleviate the squeeze applied by higher tax rates, which should certainly be put back on in the same way that they were taken out by Bush. That means that the wealthy should bear a heavy portion of the inevitable tax increase, and be thankful that they got such a tax holiday.

  • I sure hope that the tax debate is framed as such that people know or learn that Obama wants to cut taxes on the middle and lower class and only raise taxes on the rich. It is essentially the definition of fairness and rewards work instead of wealth.

    John McCain: Your retirement is too secure as it is, don’t you think?
    John McCain: Can’t poor sick children just get a job already?
    John McCain supporting our troops by keeping them uneducated.

    Why do I put these links in all of my comments? Click Here.

  • Businesses get taxed on their profits, not their revenues. We wait until they break even, and then tax them. If we applied the same philosophy to households, taxation wouldn’t kick in until the poverty line, which is far from the case today. Why should someone pay tax when they’re not even eking out subsistence wages? What value to being a member of society is accruing to them? You would think at some point that small government conservatives would try a populist approach for once, but in the end, its more about enriching the wealthiest in society than it is about achieving any economic justice for those that need it most.

  • Someone might also point out that any higher tax rates on 200k+ only applies to the amount _over_ 200k. So for the 1.1% of taxpayers between 200-250k, the extra 4% is a maximum of $2000. They currently save more than this because they only pay Social Security on about 90k, so it is still the middle class getting screwed with the higher effective tax rate.

    A better deal would be to just ‘raise’ the SS tax for high earners to the level paid by everyone else, although many of the super-rich can avoid regular income.

  • My biggest question is that if the goverment sets a number on who is “rich ” it scares me. Will they index it to inflation (Remember the AMT ? Orrigionally it only affected the supper rich but now inflation has caught up with us )

    Even if they do index to inflation – it how ? Who defines the rate?

    Additionally – If you earn 200K at age twenty five is it as rich as someone with 40 years experence earning 175K and making 25 K on savings built up for retirement ?

    So many ideas – so little clarity

  • If you think $200,000 is rich try affording a new home in Sunnyvale on that salary.

    Are you defining as rich anyone who makes more than the median income?

    I mean it CB. Get some better spoofs in here or … or … I’ll vote for McCane!

  • Isn’t there something going on that is sucking up a shitload of money, something to the tune of 2 billion dollars a week? And has run up a half a trillion dollar bill already? Something big, like a war? Not to mention the costs that will have to be paid as a legacy of this war?

    Maybe somebody, especially if that somebody wants to keep things the same over in Iraq ought to think about how they are going to pay for these little adventures, outside of selling China the deed to California?

    And personally, if I was in the top 1% paying (supposedly) 37% of income taxes, I would say, “well at least I’m not having to pick between paying for food or rent.”

  • Kman, that site is a joke. Did you post it for a laugh?

    How about Warren Buffet’s challenge? A million bucks to any super rich person who can show they pay more taxes than their secretaries?

    http://www.cnbc.com/id/21553857/

    No one’s taken him up on it.

    But Buffett is just a nutjob, right?

    Spare us the Gooper bullshit.

  • You’re confused, Steve. You seem to think that being “rich” has something to do with comparisons among Americans… when clearly “rich” is defined by “being able to buy a jet airplane”, which most people making $200,000 can’t do. See?

  • Per comment # 33:

    That’s why it’s called progressive taxation, you wingnut moron.

  • Also Per comment # 33:

    The rich use our infrastructure to make money. They should pay more. The rich usually drive more, fly more and work with the government more. They should pay more. The huge amount of money, obscene amount really, that is being used to protect our country? Well the wealthy own much more. Many poor people have no property at all to protect. So yes, the rich should pay more.

  • Let’s assume that the figure claimed above that the top 10% pay 68% of federal income taxes is valid. This is highly misleading – there are many other taxes than federal income. There are Social Security, Medicare, state-county-local sales taxes AND state and local income taxes, property taxes, etc..The majority of workers pay more in Social Security taxes than federal income taxes! Warren Buffett has wryly commented that his secretary pays the same percentage of her income in various taxes as he does – around 22%! And the 22% is a much bigger burden on her than it is on him! The only people being overtaxed in the U.S. are the middle income people. There are many well-funded, tax-exempt (!) think tanks whose mission is to discredit the very idea that wealthy people should pay any taxes at all! This is a moral disgrace! Taxing the rich would be a novel idea!

    • Comments are closed.