Wednesday, June 25, 2008

Political Corner - Taxes

Sorry this has been a long time in coming. I had forgotten that research is a little time-consuming!

Today’s topic: the Economy.

It’s on everyone’s mind. We’re all suffering from high gas and grocery prices, but what should be done about it? Below you will find a breakout of McCain and Obama’s policies on taxes, and what it means to your wallet:

Issue

McCain

Obama

Who do the tax reductions effect?

Everyone

Those who make less than $227,000/year

Who benefits the most?

Those whose annual salary is over $603K will get a $45-270K tax reduction

Those whose annual salary is less than $227k will get a $3,000-500 tax reduction

Leads to a larger deficit?

Yes; $4.5 Trillion in 10 years

Yes; $3.3 Trillion in 10 years

Specific Policies

· Keep the 2001 and 2003 tax cuts in place for everyone

· Double exemption for dependents

· Lower corporate tax rate

· Make expensing rules more generous for small businesses

· Lessen the estate tax

· Eliminate the Alternative Minimum tax

· Keep the 2001 and 2003 tax cuts in place for everyone except those making more than roughly $250,000

· Increase the capital gains tax

· Expand the earned income tax credit

· Give those making less than $150,000 a $500 tax credit per person on the first $8,100

· Give those making under $75,000 a 50% federal match on the first $1,000 of savings

· Exempt seniors making less than $50,000 from income tax

· Lessen the estate tax and the Alternative Minimum Tax.

Average savings

$1,200

$160

Average income growth as a result

2%

0.3%

Spending Reforms?

Yes; cut earmarks

Yes, unspecified

So what does this mean? The average savings are more by far in the McCain column, but this is actually misleading, because the majority of the McCain tax cuts go to people who make over $200,000/year!

This might be helpful to some of you (who knows?), but for us, those tax cuts will not do us any good. Obama’s policies are better for the middle class. What this means for the overall economic picture, I don’t know. I would welcome any comments from those of you who do! I will attempt to explore this issue further in a later edition.

In their own words:

“We need to steer clear of this poverty of ambition, where people want to drive fancy cars and wear nice clothes and live in nice apartments but don't want to work hard to accomplish these things. Everyone should try to realize their full potential.” – Barak Obama

“I am a Republican. I'm loyal to the party of Abraham Lincoln and Theodore Roosevelt. And I believe that my party, in some ways, has strayed from those principles, particularly on the issue of fiscal discipline.” – John McCain

Sources:

http://www.brainyquote.com/quotes/authors/j/john_mccain.html

http://money.cnn.com/2008/06/11/news/economy/candidates_taxproposals_tpc/?postversion=2008061113

http://www.brainyquote.com/quotes/authors/b/barack_obama.html

3 comments:

Bryce and Jamie Blake said...

i am so glad that you posted this! :) i am so lost when it comes to politics. . . this made me think! definitely post more!

Mike and Erin Duerden- said...

Someone made a horrible (and yet still weirdly funny) joke today about how no matter who gets elected, they will die in office....McCain because he's old, and Obama because some redneck from alabama will shoot him. Haha! (Okay, probably not appropriate)

Roger and Laurene said...

Where does your income growth figure come from? If McCain's plan will grow the economy, that will definitely help the middle class. The scary thing is the amount both of them want to add to the deficit. They should take Dave Ramsey. :)