Tax cuts, the reformation of health care, government regulations, and the regulation of Wall Street in United States
The presidential election is the most highly anticipated election in the United States. Presidential candidates spend much time campaigning and debating different stances that they take when it comes to the future of the United States. One topic that was highly discussed during this year’s campaign was the future of our Economic Policy. Mitt Romney and Barack Obama both have different viewpoints and proposals when it comes to tax cuts, the reformation of health care, government regulations, and the regulation of Wall Street; however, Obama’s proposals illustrate a stronger stance when it comes to the country’s Economic Policy for 2012.
The first thing Mitt Romney wants to enforce in his Economic Plan is the lowering of taxes. Specifically, Romney wants to make the Bush tax cuts that were proposed in 2008 to be permanent. He wants to lower the corporate tax from 35% to 25% and permit businesses from writing off capital investments that were made between 2010 and 2011. Romney also wants to eliminate dividend and capital gains taxes for all households earning less than $250,000 a year and end the estate tax. General tax cuts create 4. 6 jobs for every $1 million spent.
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Romney’s proposals to cut taxes would increase spending, put more money into the consumer’s hands, and boost the economy. However, an extension of unemployment benefits would create 19 jobs, rather than 4. 6, for every $1 million dollars spent. Romney’s tax cuts are more likely to increase the national debt by $1 trillion over the next ten years. Barack Obama also had a proposal for the lowering of taxes in his Economic Plan. In 2010, President Obama signed an $858 billion tax cut deal that extended the Bush tax cuts through 2012. It cut payroll taxes by 2%, adding $120 million to workers’ spendable income.
The Obama tax cut deal extended a college tuition tax credit. Businesses received $140 billion in tax cuts for capital improvements and $80 billion in research and development tax credits. But despite these tax cuts, unemployment remained at 9% throughout 2011. “On Feb. 13, President Obama issued a budget plan that included job-creation initiatives for infrastructure, job-training and innovation. To offset their cost, he called for raising $1. 5 trillion over 10 years from the wealthiest taxpayers and from closing some corporate tax breaks, chiefly for oil and gas companies.
For the first time he proposes a higher tax on dividend income of the wealthiest taxpayers, which would raise about $206 billion over 10 years” (Federal Budget). This plan is much more effective than Romney’s, which would cause the national debt to increase in the next ten years, whereas Obama’s plan would raise $206 billion in the next ten years. The next topic discussed in Romney’s Economic Plan was the reformation of health care, also known as RomneyCare. One of Romney’s main goals in passing health care was to counter many more liberal attempts within Massachusetts to take over the health care system.
On his first day as president, Romney would issue a waver to all 50 states, allowing them to opt out of ObamaCare. He believes that each state should be able to craft their own health care programs. Romney would veto the employer penalty for not providing health insurance, and he favored an “opt out” provision for the mandate. Romney wouldn’t impose any new taxes for RomneyCare, and he would balance the states’ budget first before passing the healthcare law. There would be no cuts to Medicare benefits and Romney would add 1% to the state budget.
RomneyCare is considered to be more conservative and “business-friendly” than ObamaCare. But the problem with Romney’s healthcare plan is the fact that it doesn’t seem to take into account the people that are actually in need of the health care. Romney vetoed the employer penalty for not providing health insurance, but employers should be penalized; anyone that’s working for a certain company should be entitled to health care. Romney seems to favor the businesses more in this case than the people that would actually benefit from having good health insurance.
In contrast to RomneyCare, ObamaCare is much more about the people. Obama did include an employer penalty for any employers that did not provide health insurance to their employees and there was no “opt out” provision. Obama’s intent is a step towards government run insurance. He plans to increase taxes by $500 billion and cut Medicare by $500 billion and the overall costs are still unknown. The rising costs of ObamaCare threatened to outstrip Medicare’s ability to pay for it and contributed to 50% of all bankruptcies.
Although Obama’s stance on healthcare is an unpopular one due to the rising expenses that come along with it, ObamaCare was created with one thing in mind, to help those in need. Many people that don’t have health insurance need it, and ObamaCare can make that possible for them. Although his healthcare bill is not as “business-friendly” as RomneyCare, it still provides many opportunities for those in need of health insurance and it shows how much Obama cares for the citizens of this country.
Another topic discussed is Romney’s Economic Plan is reducing government size and government regulations. According to Romney, government regulations cost $1. 75 trillion. In order to reduce this, Romney would only allow new regulations if the cost could be offset by eliminating other regulations. He would also streamline regulations so they no longer hinder the energy production of nuclear power, coal, oil, and gas. Romney would introduce a Constitutional amendment that requires a balanced budget.
He also wants to reduce Medicare, except for current seniors, and tie unemployment benefits to worker retraining. Furthermore, reducing the government size will eventually end with a balanced budget. Although Romney’s ideas are good and will probably have some positive outcomes, there are still some downfalls. “Romney’s desire to reduce Dodd-Frank banking regulations could allow them to further invest in derivatives, which helped cause the 2008 financial crisis” (Mitt Romney).
Romney’s proposals always seem to cause more harm than good when it comes to the future of the economy in the long-run. Obama’s Economic Plan contained a regulation of Wall Street. In July 2010, the Dodd-Frank Wall Street Reform Act became law to improve regulation of eight areas that led to the financial crisis. The Consumer Financial Protection Agency improved regulation of credit cards and mortgages. The Financial Stability Oversight Council regulated hedge funds and banks. The “Volker Rule” banned banks from being too involved with hedge funds.
Dodd-Frank clarified which agencies regulated which banks. “Dodd-Frank also asked the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) to create additional regulation for the riskiest derivatives, like credit default swaps, and commodities futures. It also asked the SEC to recommend how the credit rating agencies, like Moody’s and Standard & Poor’s, could be improved” (Obama’s Economic Policies). Although the passing of these regulation bills was very controversial, they were made in order to ultimately help the economy.
Its top goal was to make sure that banks and financial houses were no longer “too big to fail”. “The bill – the greatest overhaul of the finance system since the Great Depression – also contains a controversial provision to get Wall Street banks out of the risky swaps and derivatives business. Mayor Bloomberg has complained that move would hurt the local economy” (McAuliff). Obama felt that this bill would allow every consumer to be empowered with the clear and concise information that one might need in order to make the best financial decisions.
Both Romney and Obama have different stances when it comes to the country’s Economic Policy, but one might agree that Obama’s proposals demonstrate a stronger and more successful point of view when it comes to the future of our country’s economy. Romney’s proposals for the tax cuts would increase spending and boost the economy; it would also create 4. 6 jobs for every $1 million spent. But, it would ultimately increase the national debt to $1 trillion over the next ten years. In contrast to Romney, Obama’s proposal for tax cuts proposes a higher tax on dividend income of the wealthiest taxpayers.
This will ultimately raise about $206 billion over the next ten years, making Obama’s plan much more effective. When it comes to health care, RomneyCare seems to be a more conservative and “business-friendly” reform system. ObamaCare on the other hand, focuses more on helping the people and being more liberal when it comes to creating opportunities for those that don’t already enjoy health care. Although ObamaCare is more controversial, it was made ultimately to help those that need health care. Romney also proposed many government regulations.
Although these regulations seem to be effective, they will ultimately contribute to a further economic crisis. When Obama passed his bills for the regulation of Wall Street, there was much controversy. But his bill will help more people make better financial decisions, which will eventually help to improve our economic state. Although Mitt Romney has his own unique vision when it comes to America’s Economic Policy, Barack Obama’s proposals and ideas are far more effective and positive when trying to improve the United States’ Economy.