Exclusive: Election 2008 – 12 Days Away

by WALTER ANDERSON October 23, 2008
Can you believe it? After almost two years of campaigning by the various candidates, the end is less than two weeks away.
We started with a huge list of candidates for each of the two major parties that was whittled down to a more manageable number by primary time. And the two candidates left standing were not even considered to be front runners one short year ago. Even more surprising, perhaps, were the Vice Presidential picks. That was especially true for McCain’s choice of Sarah Palin.
This presidential election is the longest in history, and it’ll be over on November 4th. Actually, that is the final day for voting. People in many areas of the country began early voting and absentee voting several weeks ago. I, for example, cast my absentee ballot on September 25th because I am an election judge in a precinct other than my own. Turnout across the country for this election may possibly be the largest ever for a Presidential election.
There have been and are many “firsts” in this election: the first time an African-American has been nominated to run for President, and the first time a woman has been picked to be the Republican Vice Presidential running mate, and the first time a person has run for President who is as old as John McCain. There has also been more money donated to the candidates and the Parties, and more money spent in campaigning in this election than ever before. The Internet, while used in prior elections for campaigning, has become a plethora of websites, blogs and discussion sites for the candidates. In addition, the Internet has made the polling data and the news reporting available faster and easier for all the millions with access to computers. To sum it all up, it surely has been an exciting time for political junkies – a thrill of unknown proportions. I’m wondering if I’ll ever see another election cycle as exciting as this one.
The question for some is will the election be final in 12 days or will there be recounts, accusations of election fraud, ballot tampering, claims of voter disenfranchisement and other forms of chicanery that will extend the final answer as to who the winner actually is? There already have been questions concerning the registration of voters by organizations such as ACORN, and further investigations have been requested into their practices. The fact that this election is so important seems to lend itself to the realization that there may be some people who will try to alter the outcome in some way. We’ll find out in less than two weeks.
The Polls
A few polls show Obama with a comfortable lead, but more and more show the candidates in a dead heat, with only one or two points separating them. Questions have been raised about the so-called Bradley Effect, but we’ll only know if that has any validity will be on November 4th.
The Third and Last Debate
Last week, the third and final debate between John McCain and Barack Obama was held at the Long Island campus of Hofstra University. It was supposed to be a fight at the finish; instead it was little more than a verbal shoving match. However, I think the debate was the best of the three. McCain had his best performance in this debate. Nobody was a clear winner, although I believe McCain maintained a slight edge over Obama. McCain had Obama against the rope several times and Obama showed concern (that silly smile he gets when confronted with something he is uncomfortable with) a number of times – but McCain only went part way and never delivered the final punch in each case. The give and take was active but I expected more. I expected that one or the other was going to be the victor in a big way, that we would get some definitive answers on their ideas for the economy and taxes or maybe even Iraq. It simply did not happen. All we heard was the same worn out statements heard for weeks. The one thing that brought some excitement and humor to the otherwise somewhat boring 90 minutes the debate covered was that Joe the Plumber became a star but in other ways it was a non-event.
Two Alleged Tax Breaks to Think About
Both candidates have gone into their ideas concerning taxes, but not very deeply. Let’s look at one point from each candidate and brought out some of the ways it can/will affect us.
It appears that some of Obama's tax policies could break the market for many years, and his suggestion of giving a 15% up to $10,000 penalty free, (NOT TAX FREE) withdrawal could well be a blueprint for disaster.
Scenario: if a person has $75,000 in a 401K or IRA and he hears this is available, he may say "whoopee" let's go and get the money! The first thing that will happen is the $10,000 he takes out will really be (assuming a 28% tax bracket because withdrawals on a 401K or IRA are looked at as regular income) $7,200, not $10,000. Obama only has said he will waive the penalty – not the tax!
There could also be “bank penalties” allowed by the tax code covering IRAs that may be subtracted from the proceeds of the withdrawal. In addition to this, there could also be state income tax that may have to be paid
The second thing that will happen is the 401K or IRA will have $10,000 less in it to compound earnings on. Therefore, say the 401K or IRA holder is 35 years old and plans to retire at 70 years of age. $10,000 with a conservative rate of interest of 5% over the 35 years between his current age of 35 and his retirement age of 70 would grow to be $55,160.15. Therefore, by taking Obama's 10% allowed distribution of $10,000 (really $7200), it would cost the owner of the 401K $47,960.15 (the interest of $45,160.15 plus the $2800 in income tax paid in the beginning equals $47.960.15) to get that $7200!
We should also be concerned with the damage that would be done by the multiple millions of dollars that would undoubtedly be withdrawn from the banks and financial organizations in our already strained economy.
More on this topic: I went to see my banker, Joe (yes, he is a real person), and asked him to look up the IRA code section on “Penalty Free Distributions.” In a nutshell, they are already allowed up to a one time maximum of $10,000 for a number of reasons that range from being a first time home buyer to a disability recipient to medical emergencies and future education (not past student loans). In these cases, bank penalty fees and income tax also come into play.
While Sen. Obama’s plan appears to be more lenient as to the reason for withdrawal, the basis for withdrawal, WITH CONTROLS, has already been built into the current tax code and therefore seems to just be more campaign hype without a complete explanation to the voters of the consequences.
Sen. McCain also, during the third debate, brought up changes in the tax regulations that would change the capital gains tax to be reduced to 7.5% for the next two years from 15% and that any withdrawals by senior citizens from their retirement accounts for 2008 and 2009 would be lowered to 10%.
Regarding to the temporary reduction in the long term capital gains tax, it would promote spending by companies for equipment and pay for employees, raise the value of assets and generally promote a better economy. The way it would help people in general would be to realize more from their individual investments and real estate sales than they would have under the current laws and therefore naturally foster additional spending.
It has been posited that this would only help the wealthy, but that’s closed thinking. If a company has more money available, it will employ more people and purchase more goods and equipment. It will allow people to sell one investment and put that money right back into the market in other investments. We must remember that not all companies are General Electric and not all individual investors are as wealthy as Warren Buffett.
Regarding the income tax reduction to 10% for senior citizens’ retirement account withdrawals, this would allow them to keep more of their money and use that money to enrich their living and therefore increase the economy. The insurance premiums that seniors pay in addition to Medicare continually rise. Their real estate taxes are at the same rate as everyone else’s and they in many cases have no income other than social security and the money realized from their retirement accounts.
Unfortunately, McCain has not explained this in detail, but these proposals would help the people and enrich the economy while causing minimum and temporary damage to the financial and investment structure on the country.
Joe the Plumber
You all know who he is and why he is being mentioned so frequently. Brought into the limelight by Obama on a rope line in Toledo and latched on to by the McCain campaign as a symbol of America. Joe wanted to know about Obama’s tax package and how it would affect him if he was successful in buying a plumbing company, hoping his income would exceed $250,000. Obama answered something to the effect that in realizing the American dream, we have to spread the wealth. This did something that Obama did not want it to do: it branded him as a socialist and it came from his own mouth. Now the Democrat Party is doing everything it can to discredit Joe by saying he does not have a plumber’s license and is not a union member. A friend of mine pointed out that those who complain about unlicensed workers often look the other way when an undocumented construction worker has no license and is not a union member. I will add that the undocumented worker may also not have a Social Security number and is being paid cash, under the table, to avoid taxes and insurance for the employer.
I think we may needmore JOE the PLUMBERS!
Another Question Concerning William Ayers
Does it matter if Barack Obama was only eight years old 40 years ago when Ayers and his Weather Underground buddies were running around the country blowing up buildings and committing other attacks of domestic terrorism? Does it matter that he was 40 years old eight years ago when Osama Bin Laden and his al Qaeda buddies were flying around the country blowing up buildings by flying into them? Both Ayers and bin Laden wanted to cause destruction, chaos and unrest in America. While bin Laden wanted to kill as many Americans as possible, Ayers did not know if he would be killing Americans with his acts or not.
There are some amazing similarities between Ayers and Bin Laden. They both come from a privileged upbringing with wealthy parents. They both went to and graduated from some of the best schools available. They both could have been constructive members of society instead of destructive members but both chose the former.
Today, both Ayers and Bin Laden are free to roam the earth – Ayers by chance of a legal question about prosecutorial misconduct and Bin Laden because we haven’t caught him as yet. Ayers, who has not repented and continues to take pride in his violent past, has virtually been given a pass by some, including Barack Obama, for his despicable deeds 40 years after they were done. Will the world and the American people give bin Laden a pass in 2041 for his dastardly deeds?
Barack Obama received two “surprise” endorsements for his campaign for the Presidency. The first was actually a first for the giver. The Chicago Tribune for the first time in its history endorsed a Democrat, in this case, Barack Obama for President. The former editor, Col. Robert McCormick of the Tribune, was a strong conservative and I suggest he is probably spinning in his grave over this one.
The second endorsement was from former Secretary of State, Colin Powell. Powell, a Republican, in addition to being former Secretary of State, was also National Security Advisor and Chairman of the Joint Chiefs of Staff. A longtime friend of John McCain said that he based his decision on his belief that Obama was a better man for the job.
In a future article I plan on a discussion of ACORN, what it is, what it does, how it does it and its relationship to Barack Obama.
In less than two weeks, I urge you all to vote – it is your right and your duty as an American citizen. Make your voice heard.
Until next time…
FamilySecurityMatters.org Contributing Editor Walter Anderson has an extensive background in business, served in the Marine Corps, and is experienced in grassroots political activism. Feedback: editorialdirector@familysecuritymatters.org.

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