Thursday, June 12, 2008

Straight Dope On Candidates' Tax Proposals

I saw a post over at Capital Gains and Games that listed something I'd long wondered about: what actual dollar values the McCain and Obama tax policies translated to. It's pretty easy to get the impression that McCain's proposals would equate to a sizable cut above and beyond what Bush already did (given that he's proposing eliminating the AMT and reducing corporate tax rates (albeit phased)), and that Obama's must be expensive (since every speech is laden with tons of new programs and bolstering of various existing programs...all of which has additional cost).

Here is are the numbers, from a new Brookings/Urban Institute study:

...compared to current policy, Senator McCain would cut taxes by $628 b. over the next 10 years and that Senator Obama would raise them by $734 b. over the same period. Most of Senator McCains cuts go to middle and high income individuals, while most of Senator Obama's cuts would go to low and middle income individuals.

It goes on to say that Obama's tax raise may be markedly higher than the 734, since he has repeatedly proposed completely eliminating the current $250k income limit cap on payroll taxes (which would amount to a huge hike for high earners). He's also denied this at various the study worked up his numbers without this change. The full post referenced at Capital Gains and Games is here.

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