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BREAKING DOWN THE NUMBERS
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.
MCCAIN OBAMA
Income Avg. tax bill Avg. tax bill
Over $2.9M -$269,364 +$701,885
$603K and up -$45,361 +$115,974
$227K-$603K -$7,871 +$12
$161K-$227K -$4,380 -$2,789
$112K-$161K -$2,614 -$2,204
$66K-$112K -$1,009 -$1,290
$38K-$66K -$319 -$1,042
$19K-$38K -$113 -$892
Under $19K -$19 -$567

Courtesy of CNN Money.

Kyle E. Moore, from Comments from Left Field says,

True to his word, Barack Obama will raise taxes if you make over about $230K a year; if you are in the top five percentile regarding income in the United States. And if you are making under $112K a year you will receive a bigger tax cut from Barack Obama than you will from John McCain.

Now let’s talk the middle class, right? The REAL middle class. Once you get under $66K a year, you will receive a tax cut that is three times larger under Barack Obama than you would if John McCain were president, and below that it just gets ridiculous.

Yes, under McCain’s plan, everyone gets a tax cut, but chances are, if you are reading this, you are going to get a far bigger tax cut under the Obama plan than you would under the McCain plan. It’s that simple.

And this is important, because John McCain is running around and telling middle class families that Barack Obama is going to increase their taxes, when McCain’s own tax increases don’t match Obama’s as far as keeping money in the people’s pockets.

I mean, if you are in the lowest tax bracket there, where it hurts the most, you will receive a tax cut thirty times greater under Barack Obama than John McCain. So please, when John McCain is out there saying he is going to fight for you, I want him to be clear; he’s fighting for the upper classes. If the middle class wants a champion that will fight for them, Barack Obama is clearly the best bet.

The Washington Post posted this diagram:

Under Obama’s plan, over 60% of taxpayers are going to receive a tax cut, averaging 3.8% - and yet overall, his tax cuts will only lower tax revenue by .3%.

McCain will cut taxes for 60% of taxpayers an average of .46% - and yet his overall tax cut will lower tax revenue by 2%.

So let’s talk nuts and bolts. Both candidates propose a tax cut – this much is obvious. But, when we are facing a growing national debt why would we cut taxes. How are we going to pay for things?

Obama proposes reinstating PAYGO; reverse tax cuts for wealthy; cut pork barrel spending; make government spending more accountable and efficient; end wasteful government spending, end tax have abuse, and close special interest corporate loopholes. By enacting these policies he hopes to pay for his tax cuts and reverse the national budget crisis.

McCain proposes keeping tax rates low, cutting the corporate tax rate from 35% to 25%, allowing first-year deductions, or “expensing” of equipment and technology investments, establishing permanent tax credit equal to 10% of wages spent on research and development, banning internet taxes, and banning new cell phone taxes. His theory is that by cutting taxes and promoting entrepreneurship he will create new jobs that will stay here in America – therefore increasing the economy.

What do the experts say?

From www.foxnews.com

Economists say there are things to like in both programs. They generally favor reductions in top rates as a way to spur new investment and job creation, so on that point McCain’s program gets good marks. However, there are worries that the higher deficits that are expected because of the tax cuts could drive up interest rates, raising the cost of money for businesses and result in less investment, not more.

For Obama, the concern is that all of his new and expanded tax credits, such as his “Making Work Pay” refundable credit which would provide low-income workers with a maximum of $500 per individual and $1000 per family, will further complicate an already complex tax system and won’t make a very big dent in the problems of income inequality.

And neither candidate is talking very much about tackling what all experts see as the biggest budgetary challenge facing the next president – the explosion in the government’s big benefit programs for Social Security and Medicare as the baby boomers retire.

And what about our former Federal Reserve chairman, Alan Greenspan?

From www.cnbc.com

"Unless we cut spending, no," the former Federal Reserve chairman said Friday when asked about McCain's proposed tax cuts, pegged in some estimates at $3.3 trillion.

"I'm not in favor of financing tax cuts with borrowed money," Greenspan said during an interview with Bloomberg Television. "I always have tied tax cuts to spending."

McCain has said that he would offset his proposed cuts — including reducing the corporate tax rate and eliminating the Alternative Minimum Tax that has plagued middle-class families — by ending congressional pork-barrel spending, unnecessary government programs and overhauling entitlement programs such as Medicare and Social Security.

Democrats pounced on Greenspan's comments, in part because McCain professed last year that he was weaker on economics than foreign affairs and was reading Greenspan's memoir, "The Age of Turbulence," to educate himself.

"Obviously he needs to go back to that book and study it some more," Sen. Claire McCaskill, D-Mo., said during a conference call arranged by the campaign of Democratic nominee Barack Obama.

McCaskill said eliminating congressional earmark spending — estimated at $17 billion annually — cannot offset McCain's proposed tax cuts.