Friday, September 05, 2008

McCain And Obama On Taxes

If you're wondering why John McCain offered few details in his acceptance speech at the Republican National Convention in St. Paul, Minnesota.... don't.

Details would have proven embarassing. Take for instance the Repubs' old stand-by, arguably their favorite issue to demagogue, income taxes (deceptively referred to generically as taxes). McCain exhorted:

I will keep taxes low and cut them where I can. My opponent will raise them.

Leave aside McCain's suggestion, which the cheering mob at the convention didn't notice, that their taxes are "low" (are your taxes low?) and his waffle "cut them where I can." Will he be lowering your taxes? The Washington Post took a look, via a study (in pdf) by the Tax Policy Center, a joint project of the Urban Institute and the Brookings Institution, which determined the average percentage change which would occur in after-tax income in the income tax proposals of the two major presidential nominees.

The population was divided into nine categories of after-tax income in 2009, of which the lowest three (up to $18,981; $18,982 to $37,595; $37,596 to $66,354) comprise 60% of taxpayers. In each of these three categories, the percentage cut in taxes would be greater under the Obama proposal. In the next highest category- $66,355 to $111,645- McCain's cut would be 1.4%- and Obama's cut, 1.8%. Consequently, an American household in which earnings are as much as $111,645 would enjoy a greater cut in income taxes in an Obama administration than in a McCain administration (if the plans were enacted). The Repub offers a greater tax cut than the Democrat beginning only at $111,646. Obama plans to maintain tax cuts for those making approximately $250,000 annually.

Obama would raise taxes in only two income brackets: the top 1% of American households ($603,403 to $2.87 million) and the top 0.1% of American households (over $2.87 million). In the latter category, McCain proposes to cut income taxes by 4.4% while Obama proposes to raise them 11.5%. On average, a household in this category would receive a cut of $992,000- and John and Cindy McCain would be showered with a $300,000 tax break.

As the Post concludes, "Obama's plan gives the biggest cuts to those who make the least, while McCain would give the largest cuts to the very wealthy." So if you're wondering why John McCain and Sarah Palin didn't mention "middle class" in their acceptance speeches... don't.

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