TPC Looks at the Obama and McCain Tax Plans
Franco, as they say, is still dead.
In the first detailed analysis of the Barack Obama and John McCain tax plans, the Tax Policy Center has run their proposals through the Big Computer and discovered that their schemes are, well, painfully predictable. Each would raise the national debt by trillions of dollars. Obama would use the money to provide modest tax cuts to low- and moderate-income people while imposing stiff tax hikes on the very wealthy. McCain would cut taxes a bit for the working-class and a lot for the rich.
Obama, who casts himself as an out-of-the box, post-partisan politician, has put together a fairly conventional Democratic tax plan. Despite McCain’s recent claim that Obama would raise taxes for all, it turns out that middle-class families would do better under Obama (who would cut their taxes by $1000 in 2009) than McCain (who would cut them by only $300). Obama’s generosity comes at a price, however, He’d raise the national debt by a staggering $3.3 trillion over the next decade, and that includes more than $900 billion in promised revenue raisers that TPC could not verify.
McCain, who once opposed President Bush’s 2001 and 2003 tax cut as a give-away to the rich, but now embraces them, has designed a plan more consistent with the New McCain than the old. It is as Republican a plan as Obama’s is Democratic. The top 20% of taxpayers get a 3% reduction in after-tax income in 2009, while the lowest-earning 60% would get less than 1%.
The real contrast, though, is at the very top: In 2009, taxpayers making more than $2.9 million (the top 0.1%) would get a nearly $300,000 tax cut from McCain, but face a whopping $700,000 tax hike from Obama.
Keeping to the pattern of Bush-era Republicans, McCain would also go deeper into the red than Obama. Including interest, he’d increase the national debt by $4.5 trillion over a decade. To what I suppose is his credit, McCain only includes about $365 billion in unspecified revenue raisers in his plan compared with Obama’s $900 billion. Let’s just say both have wills far bigger than their wallets.
McCain, especially, says he’ll offset many of his tax cuts with spending reductions. And, in fairness, the TPC analysis looks only at taxes, not spending or health care. It also excludes two extremely controversial tax proposals—Obama’s plan to raise Social Security payroll taxes and McCain’s promise to give people the option to file a vastly simplified return. TPC could not model either because the campaigns did not provide enough details.
Finally, a quick word about baselines. Both McCain and Obama insist that we should assume that the Bush tax cuts will be made permanent before estimating what their own tax cuts will cost. This is little more than an outrageous bit of accounting legerdemain. There is, in fact, zero chance that all the Bush tax cuts will be made permanent, just as there is no chance they will all be allowed to expire.
Great info and straight to the point. I’m not sure if this is in fact the most effective place to ask but do you guys have any ideea where to employ some professional writers? Thank you Regards 4
I saw the zeitgeist video explaining the malicious activities of the world's greatest bankers. I do not know if there is any truth to that but when speaking of debts all around the globe, it really makes me think that perhaps there is a way to minimize the debts of all countries. Even the US has debts. But this is just wishful thinking.
Autofocus Binoculars
That is false.
Can you please explain your math a little better? It is hard to follow and looks incorrect. If I'm correct, you are trying to say that under Obama you pay $650k in payroll taxes, but only $102k under McCain. That is incorrect.
I think you excluded this since it would skew the numbers much more in McCain's favor.
I would have to agree. Think about it you are taxed based on your real earnings minus your deductions. Once you subtract what you have already paid in payroll taxes you come up with what you owe the government. If I'm correct payroll taxes account for about 21% in MD. So a person making 3,000,000 would pay about $630,000 in payroll taxes. So Obama taxes them $700,000-$630,000 means their tax liability is $70,000. Same person under McCain pays payroll up to $102,000. Which means they have $2.5 – 2.8 million to be taxed after generous deductions. Even at the current rate of 33% that means their tax liability is $804,000-903,000 after an additional $21,000 payroll deduction. Those numbers beat Obama's hands down.
As with SS, if you put the most in you get the most out. So it's not going to solve anything in the long term. It's a short term gimmick.
The Brookings Institute, that published this analysis of both McCain's and Obama's tax plans, is a left of center group (Democrat) per Wikopedia. So, they'd be expected to slant things to lead readers to believe that the most liberal Senator Obama is more desirable then McCain.
Brookings Institution – Wikipedia, the free encyclopedia
This analysis on the 5th paragraph down, also mentions that they didn't take into account Obama's plan to raise Social Security payroll taxes, which decreases the amount of take home pay the middle class worker will have.
McCain, especially, says he’ll offset many of his tax cuts with spending reductions. And, in fairness, the TPC analysis looks only at taxes, not spending or health care. It also excludes two extremely controversial tax proposals—Obama’s plan to raise Social Security payroll taxes and McCain’s promise to give people the option to file a vastly simplified return. TPC could not model either because the campaigns did not provide enough details.
In the above paragraph 5, they say they look only at taxes. However, they must mean Federal Income Taxes instead of all taxes such as the Social Security payroll Tax.
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These are some of the comments by the readers at the bottom of the article from Brookings Institute and the Tax Policy Center (TPC) about McCain's and Obama's tax plans:
Re: TPC Looks at the Obama and McCain Tax Plans
by Anonymous on Wed 11 Jun 2008 06:35 PM EDT | Permanent Link
There is obviously as much data available to model Obama's payroll tax increase as there is to model his other tax increases. I think you excluded this since it would skew the numbers much more in McCain's favor.
Re: Re: Re: Re: TPC Looks at the Obama and McCain Tax Plans
by Anonymous on Thu 12 Jun 2008 03:11 PM EDT | Permanent Link
it should also be noted that obama has said all sorts of different things about what his payroll tax increase might be so it's difficult to say what he exactly he plans to do other than bob and weave.
and while we're noting, maybe we should note that pretending obama is going to shrink the deficit while proposing nearly a trillion dollars in new spending is laughable.
I just ran the numbers on that based on the tax stats for 2005 from the IRS site and just the individual portion would bring in roughly a conservative estimate of additional 135 billion per year, adding in the employer portion would add in another 135 billion for a sum total of 270 billion a year based on 2005 income data. Using 2008 – 2018 income estimates would appear to completely eliminate the budget deficit in Obama's plan.
it should also be noted that obama has said all sorts of different things about what his payroll tax increase might be so it's difficult to say what he exactly he plans to do other than bob and weave.
and while we're noting, maybe we should note that pretending obama is going to shrink the deficit while proposing nearly a trillion dollars in new spending is laughable.
It should also be noted that Obama has repeatedly indicated there would be a “doughnut” exemption for income to the payroll tax between 100K and 250K… thus leaving the number of people actually effected by that proposal to the top .5%. Commentator #1 needs to get the facts before trying to scare people with “tax hike” hysteria
I think you excluded this since it would skew the numbers much more in McCain's favor.
Huh? The affect would be to significantly reduce the long term deficit so I don't see how it would make McCain's numbers look better it would make Obama's numbers look much better while shoring up the fiscal soundness of Social Security.
There is obviously as much data available to model Obama's payroll tax increase as there is to model his other tax increases. I think you excluded this since it would skew the numbers much more in McCain's favor. Everyone who makes over 100k will pay at least 6.2% more of every dollar made over the current payroll tax cutoff.