Naturally, both candidates have a plan for tax policy – Obama promises a tax cut to 95% of working Americans, while McCain offers a continuance of George Bush’s tax policy. Today, Business Week compared the two.
Len Burman, a former Treasury tax official who is now a senior fellow at the Urban Institute, says if Obama’s proposals-which include plans to rescind the Bush tax cuts on couples making more than $250,000, close corporate tax loopholes, and tax private equity earnings known as “carried interest” as ordinary income-were adopted in 2009, for example, married couples with earnings in the lowest quintile of the population would see their aftertax income rise 5.8%. Those in the next quintile would see an increase of 4%. Those breaks would be paid for by those with high incomes: the top 1% of taxpayers would see aftertax income fall 8.4%.
Under McCain’s proposals, by contrast-including an extension of the Bush tax cuts for all taxpayers, a corporate tax cut, and a larger reduction in estate taxes than Obama would support-far more of the benefits would go to the top. If his plans went into effect in 2009, married couples in the bottom fifth of the population would see aftertax income go up just 0.2%, while those in the next quintile would see a 0.7% hike. But those in the top quintile would see a bump up in aftertax income of 2.7%.
“It’s just flat wrong” to say people would do worse under Obama, says Burman. “Most lower- and middle-class people would pay less taxes under Obama than they would under the proposals being put forth by McCain.”
Want to see how much of a tax cut you can expect to see under Obama’s plan? Click here:
So for everyone interested in a real discussion of a real issue, please comment. Please be honest and respectful, no pie fights – if this works out, we can cover health care, or the economy, or Iraq, or…