McCain and Obama tax plans in detail

Now that the conventions are over and the blood and confetti has been washed from the streets, it’s time to look at some reals comparisons of the candidates. It can be hard to push through the rhetoric and just make the decision for yourself. Even at the candidates websites, their own detailed proposals are written in an overtly biased manner and spread out across multiple pages and categories.

John McCain has been pushing the oversimplified agenda of Obama = raise taxes, McCain = lower taxes. Unfortunately, it’s far more complicated on both sides. Please see the below for a quick comparison:

Look where Obama’s tax increases are and look where McCains tax cuts are. As you can see, there is a pretty obvious difference when it comes to income level. The most outstanding item, at first glance, is the tax increases in the Obama column on wage earners $600,000 and above. As it such a glaring difference, it might lead you to believe that McCain is correct about Obama being an evil “tax and spend” liberal. However, as none of you (well, at least 99% of you) are being affected by those tax increases, look at the rest of the graph.

If you cover up the top 2 tiers of the graph (less then 1% of wage earners) you can see where John McCains bread is buttered. The fact is, that the lower brackets will spend into the economy any tax breaks they receive, whereas the upper tax brackets will simply invest the funds in markets that will either harm the lower classes (i.e. fuel and farm commodity speculation) or possibly invest them in other markets or currencies doing better then the US at this stage there-by reducing our economic growth even more then before the tax cut. If anyone tells you that the average Joe will receive a penny of trickle-down from the rich, they’re blowing smoke up your ass.

Below is a table of the tax plans in detail. I think they speak for themselves. The biggest issue that affects the “Middle Class” is the removal of the cap on the Social Security tax in Obama’s plan. However, since it only affects families earning over $200,000, we’re only talking about 3% of wage earners. From the Tax Policy Center an easy to read analysis of McCain and Obama’s proposals.

	Barack Obama	John McCain
New Tax Cuts	Obama Refundable Making Work Pay tax credit of 6.2 percent of earnings up to a maximum of $8,100 Refundable Universal Mortgage Credit of 10 percent or mortgage interest for nonitemizers, capped at $800 ($8,000 of interest) Eliminate income tax for senior making less than $50,000 per year First-time buyers tax credit for new farmers Small Business and Microenterprise Initiative tax credit of 20 percent on up to $50,000 of investment in small owner-operated businesses	McCain Allow first-year deduction of 3 and 5-year equipment, deny interest deductions (expires) Reduce maximum corporate tax rate from 35 to 25 percent Increase the dependent exemption by 70 percent Suspend the federal gas tax (18.4 cents per gallon from this Memorial Day until Labor Day
Adjustments to Existing Credits	Make R&D and renewable enery production tax credit (wind, solar) permanent Extend childless EITC phase-in range and increase phaseout threshold, double the phase-in and phase-out rates for childless individuals paying child support, increase EITC phase-in rate to 45 percent for families with three or more children; increase add-on to EITC phase-out threshold for married filers to $5,000 Make CDCTC refundable and allow low-income families to receive up to a 50 percent credit for child care expenses Make saver’s credit refundable and change to a 50 percent match of the first $1,000 of savings, phases out beginning before $75,000 Increase Hope credit 100% match rate to $4,000 for college education and make refundable, rename American Opportunity Tax Credit Mandate automatic 401(k)s and automatic IRAs	Convert R&D credit to 10 percent of wages incurred for R&D, make permanent
Capital Gains	Increase maximum capital gains rate to 20 percent Require information reporting of basis for gains Eliminate capital gains taxation of start-up businesses and provide capital gains tax break for landowners selling to beginning family farmers	Keep the current rates on dividends and capital gains
Bush Tax Cuts	Permanently extend marriage penalty relief, adoption credit expansions, 10,15,25, and 28% rates, EITC simplification Restore 36 and 39.6% statutory income tax rates, Restore PEP and Pease phaseouts for households making more than $250,000, increase in PEP and Pease threshold	Make permanent all provisions other than the estate tax repeal
Alternative Minimum Tax	Extend and index 2007 AMT patch	Extend and index 2007 AMT patch, further increase exemption by 5 percent in excess of inflation after 2013 (temporarily)
Estate Tax	Make permanent estate tax with $3.5 million exemption and 45 percent rate	Make permanent estate tax with $5 million exemption and 15 percent rate
Simplification	Give taxpayers the option of pre -filled tax forms to verify, sign, return to IRS	Give taxpayers the option of an alternative tax system with two rates and a larger standard deduction and personal exemption
Revenue Raisers and Tax Havens	Eliminate oil and gas loopholes Close loopholes in the corporate tax deductibility of CEO pay Tax carried interest as ordinary, Increase the highest bracket for capital gains and dividends Reallocate multinational tax deductions Codify economic substance doctrine Create international tax haven watch list Other unspecified revenue raising provisions	Eliminate oil and gas loopholes Unspecified corporate base broadeners Eliminate earmarked projects from the budget, freeze nonmilitary discretionary spending for one year, eliminate programs
Health	Income-related federal tax subsidies for health insurance	Replace exclusion from income for employer sponsored health insurance with refundable credit of $2,500 for individuals and $5,000 for families
Other	Social Security/payroll taxes: impose additional tax of 2-4 percent (combined employer and employee) on workers with income above $200,000 ($250,000 for married couples)	Require a 3/5 majority vote in Congress to raise taxes Ban internet and cell phone taxes Higher premiums for Medicare prescription drug coverage for single people earning more than $82,000 and couples earning more than $164,000