McCain's Tax Cuts vs. Obama's Tax Increases

McCain's Convenient Untruth

I have been reading up on the tax plans of both candidates and I came across this article that goes into detail about how the tax plans would impact the economy. It seems McCain wasn't exactly accurate in his RNC speech when he talked about the impact on jobs and the economy.

This country is in debt worse than it's ever been and now we're borrowing more money to bail out Fannie Mae and Freddie Mac. It has to stop sometime. We have to get control of this insane spending or we'll never gain equilibrium.

When it comes to fighting wars, John McCain stands up and calls for sacrifice. "We never hide from history; we make history," he declared in his convention speech. But when it comes to taxes, McCain is unwilling to demand even a teensy bit of sacrifice. In a McCain administration, Americans would not have to surrender a dime more of their money to a cause larger than themselves.

Why this bipolar attitude toward sacrifice? Start with the answer that McCain himself provides. "My tax cuts will create jobs. His tax increases will eliminate them," he said at the convention, offering one of the speech's few policy contrasts between Obama's platform and his own. In other words, McCain is not calling for tax sacrifice because he believes it would be counterproductive. On taxes, he is saying, you can selfishly avoid sacrifice -- and serve the public good.

This, unfortunately, is a convenient untruth. Tax hikes taken to an extreme can indeed backfire, harming growth and job creation. But it's a stretch to assert that Barack Obama's tax plan would do that. And it's downright scandalous to pretend that the economy can be strengthened in anything other than the short run by unaffordable tax cuts.

Tax Plan Face Off: Obama vs McCain

The rich would pay more under Barack Obama's tax plan, and the poor and middle-class would pay less, a nonpartisan analysis finds. Under John McCain's plan, the rich would pay much less than they do now, the poor and middle-class would pay a bit less, and the federal deficit would grow, the study found.

Can we afford to have our federal deficit grow?
Do you want the rich to pay "much less"??

McCain would make permanent most of the tax cuts President Bush has already enacted, including those that benefit the middle class, such as elimination of the marriage penalty and the increase in child credits. He would also keep cuts that benefit the wealthy, such as the elimination of the highest tax brackets. Obama would keep the breaks for the middle class but not the ones for the wealthy.
...
Assuming they would have been renewed anyway, Obama's plan would bring in an additional $700 billion in taxes over the next 10 years, while McCain's would cost the Treasury $600 billion. Assuming legislators would have let the tax breaks expire, Obama's plan would cost the U.S. Treasury $2.7 trillion and McCain's $3.7 trillion.

Here's how the average tax bill could change in 2009 if either John McCain's or Barack Obama's tax proposals were fully in place.



Source

McCain: The average taxpayer in every income group would see a lower tax bill, but high-income taxpayers would benefit more than everyone else.

Obama: High-income taxpayers would pay more in taxes, while everyone else's tax bill would be reduced. Those who benefit the most - in terms of reducing their taxes as a percentage of after-tax income - are in the lowest income groups.

This leaves no doubt in my mind that Obama's plan is the one I would prefer. Even though I might pay more taxes under Obama's plan than McCain's plan, I feel certain that lower income families would benefit greatly, and I'm willing to make that sacrifice for my fellow Americans.

EXCELLENT!! Good on you, BH.

I am a long-time advocate of "If you want low taxes, quit spending so much money."

I'm all for low taxes, but for far too long the Federal Gov't has been spending money like they have it when they don't.

And I've been saying for a while that taxes are going to go up. Maybe soon, if somebody has the guts and political will to do it; maybe later when there is no other choice. And like most problems, the sooner it is resolved, the less painful it will be.

From a purely non-wealthy person point of view, I also think it is high time the richest people paid more. I'll need to track down the numbers, and I don't have time right now, but what, the richest 5% control 95% of the wealth? Or something like that. But they do not pay the same relative amount of taxes.

I don't care if the rich pay less or not.

They've worked hard and earned their money just as I do. They should have the same right to keep it as me. After all, they already pay the majority of the tax bill anyway.

reply to post by Benevolent Heretic


Are the increases due to Pres. Bush's tax cuts expiring? I think Sen. McCain (who was opposed to them in 2001) wants to keep them now, and Sen. Obama wants to let them expire.
I support a flat tax, and a deduction of $24K per person. I would get rid of all write offs and deductions, thereby getting rid of the IRS. This would be fair as everyone would pay the same rate and would not have any loopholes.
I would also get rid of the Federal Reserve and put the dollar on the gold standard.

reply to post by kidflash2008


The short answer to your question is that it looks like a combination of keeping some and letting others expire AND adding some of his own. See the last link below for details.

And he will delay the expiration if the economy deems it necessary should he take office.

From March of This Year

Democratic rivals Clinton of New York and Obama of Illinois both voted to extend only some of Bush's tax cuts while allowing cuts in income tax rates and investments expire. They joined other Democrats in a 52-47 vote against extending $376 billion of them.
...
Democrats argued that when the time comes, they'll renew tax cuts aimed at the middle class by closing billions of dollars worth of corporate and other tax loopholes. They also say billions more can be raised by cracking down on tax cheats.

From Yesterday

He (Obama) also said he would delay slashing President Bush’s tax cuts if he becomes president and the economy is in a recession.

But he vowed to push for his promised tax cuts for the middle class. “Even if we’re still in a recession, I’m going to go through with my tax cuts,” Obama said.

McCain wants to make permanent the Bush tax cuts, which are set to expire at the end of 2010.

Obama Tax Relief

Provide a Tax Cut for Working Families
Eliminate Income Taxes for Seniors Making Less than $50,000
Simplify Tax Filings for Middle Class Americans

[edit on 9-9-2008 by Benevolent Heretic]

A good part of the national deficit is a direct result of Bush's tax cuts for the wealthy. Money was borrowed to cover the loss of tax revenue. McCain's policies would put us even deeper into debt. Some indviduals would benefit, but at a cost to the American people as a whole.

And you think taxing the rich is good for the economy? When have you ever heard the rich say "Well I guess I'm out that money, so I'll have to downgrade my standard of living as a result." The rich might pay more in taxes under Obama's plan, but you can bet they will make up that loss of money somewhere and most likely it will be coming out of their businesses by cutting jobs and not creating new ones.

The stock market tanked over 500 points last week on higher than expected unemployment numbers. How bad do you think it's going to get if an "rich tax" is imposed?

I see it backfiring and Obama would have to change his tax cut plan like Clinton did and actually raise taxes on the middle class.

Increased tax rates do not increase government revenue...

Fact

There is a distinct pattern throughout American history: When tax rates are reduced, the economy’s growth rate improves and living standards increase.

Conversely, periods of higher tax rates are associated with sub par economic performance and stagnant tax revenues. In other words, when politicians attempt to “soak the rich,” the rest of us take a bath.

Lower tax rates do not mean less tax revenue.

According to President John F. Kennedy:

Our true choice is not between tax reduction, on the one hand, and the avoidance of large Federal deficits on the other. It is increasingly clear that no matter what party is in power, so long as our national security needs keep rising, an economy hampered by restrictive tax rates will never produce enough revenues to balance our budget just as it will never produce enough jobs or enough profits… In short, it is a paradoxical truth that tax rates are too high today and tax revenues are too low and the soundest way to raise the revenues in the long run is to cut the rates now.

Tax History

The only real reason to raise taxes is the redistribution of wealth. When you cut through all the hype, it is abundantly clear that raising taxes hurts economy and government revenues.

It is also a fact that raising the taxes on what is called the "rich", only hurts the poor and the middle class by job loss and price increases...

Semper

reply to post by semperfortis


Well stated, semper! This is the message I was trying to convey in my post.

reply to post by sos37


Trickle down economics (called VooDoo Economics by George Bush I) did not work when Pres Reagan did it when in office. Sen McCain was opposed to the tax cuts Pres Bush was for in 2001 stating the country should use the money for other things. He was also opposed to making them permanent. How things change when one is running for President.
The country is trillions of dollars in debt, and went into even more debt with the bailout of the mortgage giants. In the 1980s, the savings and loans industries tanked, and the taxpayers had to pay billions of dollars to bail them out.
A flat tax with just a deductible of @ $20,000 is fair and reasonable. Or else a value added tax (vat) instead, with food being exempted.

Trickle down economics would work in an ideal world where our country wasn't in such huge debt and people weren't so damn greedy. If you give tax cuts to the wealthy, they find out a way to keep the money for themselves, whether it be hiring sub-standard workers and paying them low wages or not providing the benefits (medical and financial, etc.) that the employees should have.

It has been proven that giving tax cuts to the wealthy doesn't work for anyone but the wealthy. A bottom-up method is required. Give the American Worker (the "fundamentals of the economy") a good, stable job that can provide for his family with good benefits and he will work hard and make the company prosperous.

That's one thing John McCain said this past week that DID make sense. The American worker has a strong work ethic and he cares about the job he does. He will work hard to take care of his family. That is what the large corporations should be betting on, because it's a sure bet. That's how to make a corporation - and a country - successful. Through the people.

Obamanomics - Bottom up Prosperity

Originally posted by kidflash2008
reply to post by sos37

 

Trickle down economics (called VooDoo Economics by George Bush I) did not work when Pres Reagan did it when in office. Sen McCain was opposed to the tax cuts Pres Bush was for in 2001 stating the country should use the money for other things. He was also opposed to making them permanent. How things change when one is running for President.
The country is trillions of dollars in debt, and went into even more debt with the bailout of the mortgage giants. In the 1980s, the savings and loans industries tanked, and the taxpayers had to pay billions of dollars to bail them out.
A flat tax with just a deductible of @ $20,000 is fair and reasonable. Or else a value added tax (vat) instead, with food being exempted.

Trickle down economics didn't put the economy where it's at now. The country is trillions of dollars in debt because of at least three extraordinary circumstances in the past 8 year presidential cycle:

1. The worst terrorist attack on U.S. soil which slammed our economy into the ground
2. The Iraq war
3. The housing bubble burst due to the subprime mortgage collapse and fallout which will be felt for decades to come; which our government continues to bail out entities on a non-consistent basis

It's still common sense however that when the rich are taxed more they cut back in other areas to keep up their status quo, and usually the workforce is the first to go with investments into new markets/expansion going next. We saw the exact same in the middle class when the nation saw $3/gallon gas. People cut deeply into spending on extras in order to maintain their driving habits, some out of necessity, some just because they didn't like the idea of being limited in any way in a free country. I imagine many of the well-to-do feel the same.