Progressive vs. Regressive Taxes-Comparison of McCain and Obama tax plans

[Yellowdogtexan]

This will be a fun debate to watch. The Obama plan wants to make the system more progressive and the mc :cane plan is to make the system more regressive. http://blog.washingtonpost.com/the-trail/2008/06/12/mccains_tax_plan_aids_wealthy.htmlA detailed analysis of the candidates' tax plans confirms one of Barack Obama's top arguments against John McCain: the Arizona senator's proposals would offer substantial benefits to wealthy Americans.

An analysis of both campaigns proposals by the Washington-based, nonpartisan Tax Policy Center found that for people with incomes between $66,354 and $111,645, Obama's proposals would cut their taxes by more than $1000, compared to around $300 under McCain's plan. But for Americans with incomes above $603,402, Obama would raise their taxes dramatically, by more than $115,000 a year, while McCain would cut them by $45,000.

"The Obama tax plan would make the tax system significantly more progressive by providing large tax breaks to those at the bottom of the income scale and raising taxes significantly on upper-income earners," the group concludes. "The McCain tax plan would make the tax system more regressive.... It would do so by providing relatively little tax relief to those at the bottom of the income scale while providing huge tax cuts to households at the very top of the income distribution."

McCain argues that such high taxes on the wealthy will slow economic growth. And the report also gives credence to another of McCain's arguments about Obama's plan, it will raise taxes on seniors. Because seniors are more reliant on gains from investments and capital gains, which Obama would increase, the group estimates Obama would raise taxes on more than ten million seniors.

Obama has proposed exempting seniors who make less than $50,000 a year from paying taxes, an idea the Tax Policy Center said "is poorly designed according to its current description and creates inequity between older and younger taxpayers with the same income."
Most rationale people support progressive taxation but many republicans want regressive taxation so that they can push the tax burden onto the poor. This is going to be a fun debate to watch

[Lone Laugher]

Why is it that the McCain supporters on here are so quiet on the issue of taxes of late?

Could it be that the facts finally hit home? Please read.

http://money.cnn.com/2008/06/11/news/economy/candidates_taxproposals_tpc/?postversion=2008061111

[Yellowdogtexan]

Here is some more on the comparison of the mc :cane vs. Obama tax cut plans. http://www.msnbc.msn.com/id/25133125/In a study of the candidates’ plans made public Wednesday, the nonpartisan Tax Policy Center concluded that in contrast to Mr. McCain, “Senator Obama offers much larger tax breaks to low- and middle-income taxpayers and would increase taxes on high-income taxpayers.”

The study said, “The largest tax cuts, as a share of income, would go to those at the bottom of the income distribution,” whereas “Senator McCain’s tax cuts would primarily benefit those with very high incomes.”

Other groups that focus on tax and economic policy are preparing similar analyses, but say they regard the Tax Policy Center’s assessment as highly reliable, based on its work in the past.Targeted tax cuts are different from bush/mc :cane's tax cuts because they can make the system more progressive. It is simple economics that progressivity in a tax system is good and regressivity is bad. This is going to be a fun debate to watch

[Yellowdogtexan]

Here is a good video that highlights the differences between the mc :cane/bush plan and the Obama tax cut plan http://www.youtube.com/watch?v=cNyNv_UfFUo

[AYFR]

Here is a better analysis of it:


Here is Howard Gleckman's perspective on the Tax Policy Center's Tax Vox Blog
In the first detailed analysis of the Barack Obama and John McCain tax plans, the Tax Policy Center has run their proposals through the Big Computer and discovered that their schemes are, well, painfully predictable. Each would raise the national debt by trillions of dollars. Obama would use the money to provide modest tax cuts to low- and moderate-income people while imposing stiff tax hikes on the very wealthy. McCain would cut taxes a bit for the working-class and a lot for the rich.

Obama, who casts himself as an out-of-the box, post-partisan politician, has put together a fairly conventional Democratic tax plan. Despite McCain’s recent claim that Obama would raise taxes for all, it turns out that middle-class families would do better under Obama (who would cut their taxes by $1000 in 2009) than McCain (who would cut them by only $300). Obama’s generosity comes at a price, however, He’d raise the national debt by a staggering $3.3 trillion over the next decade, and that includes more than $900 billion in promised revenue raisers that TPC could not verify.

McCain, who once opposed President Bush’s 2001 and 2003 tax cut as a give-away to the rich, but now embraces them, has designed a plan more consistent with the New McCain than the old. It is as Republican a plan as Obama’s is Democratic. The top 20% of taxpayers get a 3% reduction in after-tax income in 2009, while the lowest-earning 60% would get less than 1%.

Joe Kristan wryly observes on Roth & Co.:

The only comfort is that they are both politicians, so there's a good chance they are lying.
http://taxprof.typepad.com/taxprof_blog/2008/06/comparison-of-t.html

Both plans lead this nation into higher debt.

[issac the dragon]

The plans both suck. Haven't we had enough of passing the payment for our standard of living onto the young? That, IMHO, is immoral.

And giving the rich tax breaks while everyone else pays through the nose is also immoral. But the last line of the post is probably the only one that counts. "The only comfort is that they are both politicians, so there's a good chance they are lying."

[Yellowdogtexan]

One plan makes the US tax system more progressive and the other plan makes the system more regressive. Even the puff piece cited by the :rev does not agree with this simple anaylsis. Progressivity is a good thing and regresssivity is a bad thing. This will be a fun debate over the merits of progressive taxation or regressive taxation.

[AYFR]

Both plans increase the debt the US will have, therefore both plans suck.
Doesn't matter if one is progressive and one is regressive.
What matters is the effect they will have on the US, the debt and the economy.

[Yellowdogtexan]

Both plans increase the debt the US will have, therefore both plans suck.
Doesn't matter if one is progressive and one is regressive.
What matters is the effect they will have on the US, the debt and the economy.If you understood economics, then you would not have asked this question. Look up the term marginal propensity to consume. Directed tax cuts actually will have a great simulative effect compared to the bullshit supply side economic advocated by believers in the tax cut fairy.

Second, economists understand the concepts of progressive taxation vs. regressive taxation. Progrressive taxes are good and regressive taxes are bad.

[AYFR]

So how do you explain the fact that Obama's plan will increase the debt by trillions?
How is that good?

[toxic]

So how do you explain the fact that Obama's plan will increase the debt by trillions?
How is that good?

Since when have Conservatives worried about the debt?

Only since they got kicked out of office.

How anti-American and self serving.

[BartonX]

The plans both suck. Haven't we had enough of passing the payment for our standard of living onto the young? That, IMHO, is immoral.

And giving the rich tax breaks while everyone else pays through the nose is also immoral. But the last line of the post is probably the only one that counts. "The only comfort is that they are both politicians, so there's a good chance they are lying."

The rich are paying the most taxes already not the poor. What might reduce the amount of taxes you pay is to ship human debris like we saw and are seeing in Nawlins back to their country of origin where they would be forced to work for a living or be shot. That would be a win win situation for everyone. :)

[Yellowdogtexan]

Bob Reich was on the ABC Sunday Morning Show and put the issue in simple terms. This race will be a referendum on supply side economics. The tax cut fairy is a myth and a comparison of the bush/mc :cane proposal to Senator Obama proposal will highlight this issue. We will have a comparison of putting tax relief where it will do the most good compared to the failed concept of trickle down economics.

[AYFR]

Since when have Conservatives worried about the debt?

Only since they got kicked out of office.

How anti-American and self serving.

I am always worried about the debt.

A little known fact about the debt is that no matter whom the president is for the past several decades the debt has has risen.

http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt_histo4.htm

http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt_histo5.htm


http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt.htm

[Lone Laugher]

If you look at that data and say that the President does not matter you are probably beyond help. Look at the data since 1980...it is not even close!

[AYFR]

I did not say the President does not matter, I said that no matter the president the debt has gone up.

[AYFR]

Show me one time that the debt has decreased since 1960

[issac the dragon]

He thinks he can save all the money from the war to pay for his tax cuts. Never mind the small things like the crumbling infrastructure. Or does he plan on allowing all the bridges to collapse? That was Bush's plan. And its working.

Obama has no real plan. He refuses to get specific. Except about the tax cuts. He'll get rid of them. Except he says now, maybe he'll delay getting rid of them while the economy is bad. Or maybe....... Who knows?

There are very hard choices that need to be made. We do not have the money to do everything. We could get rid of the Dept. of Education. I can't see him doing that though. He is too much a progressive Dem. He could make sure that every soldier has his/her feet on American soil, and let the rest of the world provide for their own defence needs. But he isn't gutsy enough to do that. He could end all of the tax breaks and welfare for farmers. I'll believe pigs can fly before I'll believe that. There are a great many things that Obama could do, and we know that McCain won't do. But he'll never do them. He won't even promise now to get rid of Bush's tax cuts.

[Lone Laugher]

I think you may be pleasantly surprised, Isaac. My insticts tell me that you are misjudging Obama. Fortunately, we will have the chance to find out what he'll do.

By the way.....have you read his "blueprint" yet? It has a pretty fair amount of detail. You keep clamoring for speciifics as though it is the norm for presidential candidates to provide them. It is not.

[issac the dragon]

I went to his site and read what he plans to do. He is a cookie cutter progressive. How he is going to do it is my question? By leaving our grandkids to pay for it is not an option. We need better medical care for all of the people. We need our bridges and roads rebuilt or replaced. We need to get the budget balanced. We need pay-go. We don't need pie in the sky.

We don't need more government expansion. Bush did enough to last a lifetime. We don't need the government running our schools. Obama wants not to end No Child. He wants more money. His only problem is that Bush didn't fund it. He wants to send every two-three year old to school. Where is he going to find that money? He wants more money for college. Where is he going to get it? And why is he even trying? Schools are not the federal governments provence. It is a states problem. The federal government doesn't have any business in the schools. Federal expansion is wrong. And Obama wants to increase it as Bush did. So does Mc Bush. But Obama is supposed to be different. So I keep hearing.

[Yellowdogtexan]

According to Professor Krugman, the Obama plan is actually better than the mc :cane plan as to the debt.http://www.nytimes.com/2008/06/16/opinion/16krugman.html?_r=1&ref=opinion&oref=sloginBut instead of pointing this out, Mr. McCain now promises to make those tax cuts permanent — and proposes further cuts that are, if anything, tilted even more toward the wealthy. And how is the loss of revenue to be made up? Mr. McCain hasn’t offered a realistic answer.

You can explain though not excuse Mr. McCain’s behavior by his need to shore up relations with the Republican base, which suspects him of being a closet moderate. But he’s not the only one seemingly trapped by the Bush fiscal legacy.

Barack Obama’s tax plan is more responsible than Mr. McCain’s: relative to current policy, the Tax Policy Center estimates, the Obama plan would raise revenue by $700 billion over the next decade, compared with a $600 billion loss for Mr. McCain.

The Obama plan is also far more progressive, sharply reducing after-tax incomes for the richest 1 percent of Americans while raising incomes for the bottom 80 percent.That is a $1.3 trillion difference between the two plans.

[issac the dragon]

Something you need to keep in mind is that the president proposes, congress disposes. Only by electing a larger majority in the House and Senate will any of this get passed. Congress passed the Bush tax cuts, and if nothing is done, they will go away.

As it stands now, the Dems cannot get anything done in the Senate. The Reps have brought it to a standstill. Obama can not do any of the things he has promised without them. The president doesn't rule us. But the Bush tax cuts will go away this year if congress doesn't renew them. They will go away without Obama's help. Or McBush's disapproval. Bye bye. I hope. Because I'm not certain the Dems won't reauthorize them. To help the economy. Yes, the Dems are that stupid. They've proved it again and again. They have given Bush nearly every thing he has asked for. Including the loss of your rights under the Constitution.

[Yellowdogtexan]

It is my hope that the Senate will be filibuster proof after the elections but that will take some luck and some help by rush. If Senator Obama wins, his plans have a chance of passing but these plans may have tol be changed if the GOP filibusters which they will. If mc :cane wins, there is no chance in hell that his plans will be enacted in any form and the bush tax cuts will be allowed to expire.

[Wabash]

Why is it that the McCain supporters on here are so quiet on the issue of taxes of late?

Could it be that the facts finally hit home? Please read.

http://money.cnn.com/2008/06/11/news/economy/candidates_taxproposals_tpc/?postversion=2008061111

No, it's just a waste of time arguing with boobs like you! I have plenty of work to do around my house, on all my vehicles and with my instructional courses! It seems that more and more folks are worried about our gun rights if Obie gets elected and are seeking instruction and permits in great numbers!

[Wabash]

.................................................. ........

[Wabash]

According to Professor Krugman, the Obama plan is actually better than the mc :cane plan as to the debt.http://www.nytimes.com/2008/06/16/opinion/16krugman.html?_r=1&ref=opinion&oref=sloginThat is a $1.3 trillion difference between the two plans.
So, we may get a better plan from Obie, and our freedoms as gun owners and Christians will be under assault! Personally, I don't need the tax cut and I'm in the lower income level of US citizens! I'd rather have my freedoms than money...ANY DAY!!!!!!!
You see, unlike Democraps, I can cut spending and survive jes fine!!

Something you need to keep in mind is that the president proposes, congress disposes. Only by electing a larger majority in the House and Senate will any of this get passed. Congress passed the Bush tax cuts, and if nothing is done, they will go away.

As it stands now, the Dems cannot get anything done in the Senate. The Reps have brought it to a standstill. Obama can not do any of the things he has promised without them. The president doesn't rule us. But the Bush tax cuts will go away this year if congress doesn't renew them. They will go away without Obama's help. Or McBush's disapproval. Bye bye. I hope. Because I'm not certain the Dems won't reauthorize them. To help the economy. Yes, the Dems are that stupid. They've proved it again and again. They have given Bush nearly every thing he has asked for. Including the loss of your rights under the Constitution.
You have very good points on this....something that die hard libs seem to forget...Pelosi and Reid got a shock!

It is my hope that the Senate will be filibuster proof after the elections but that will take some luck and some help by rush. If Senator Obama wins, his plans have a chance of passing but these plans may have tol be changed if the GOP filibusters which they will. If mc :cane wins, there is no chance in hell that his plans will be enacted in any form and the bush tax cuts will be allowed to expire.
Well, it is MY hope that Obie loses his ass in Nov.! McCain is no better....it came down to 3 very poor choices for POTUS!

[Trueblue]

I have yet to see a Publican do much cutting. They only talk about cutting. They just won't raise taxes to cover all their plans.

Bring my money home from Iraq and let us decide how to spend it here, and on foreign aid that actually helps with food, water, or medical care.

[Lone Laugher]

No, it's just a waste of time arguing with boobs like you! I have plenty of work to do around my house, on all my vehicles and with my instructional courses! It seems that more and more folks are worried about our gun rights if Obie gets elected and are seeking instruction and permits in great numbers!

Well...ther's your problem dufus. You argue with boobs! I can think of better things to do with them than that.

Nobody asked for your work schedule....being that you are the all time number one poster on here ( and you say that you are on other forums as well ) my guess is that you hardly do any work at all.

Lazy people always talk about how much they work. People who work like to talk about how hard they play.

[Wabash]

Election day is coming sooner than your think

Proposed changes in U.S. taxes after 2008 General election



VOTE Wisely

Read very carefully, it's your future.

If you want "CHANGE" this will do it.


CAPITAL GAINS TAX

MCCAIN
Current 0% on home sales up to $500,000 per home (couples)

McCain does not propose any change in income tax on existing home sales



OBAMA
28% on profit from ALL home sales

How does this affect you?
If you sell your home and make a profit, you will pay 28% taxes on.your profit (Capital Gain). If you are planning to retire and would like to down-size your home or move into a retirement community 28% of the money you make (CAPITAL GAIN) from your home will go to taxes. This proposal will adversely affect retiring couples who are counting on the income (CAPITAL GAIN that is currently exempt from income tax) from their home as part of their retirement income.



DIVIDEND TAX

MCCAIN

15% (no change)



OBAMA

39.6%

How will this affect you?
If you have any money invested in stock market, IRA, mutual funds, college funds, life insurance, retirement accounts, or anything that pays
or reinvests dividends, you will now be paying nearly 40% of the money earned on taxes if Obama become president.


The experts predict that 'higher tax rates on dividends and capital gains would crash the stock market yet do absolutely nothing to cut the deficit.

INCOME TAX

MCCAIN

(no changes from present tax law un the Bush administration)

Single making 30K - tax $4,500
Single making 50K - tax $12,500
Single making 75K - tax $18,750
Married making 60K- tax $9,000
Married making 75K - tax $18,750
Married making 125K - tax $31,250

OBAMA

Reversion to pre-Bush tax cuts ? (CLINTON TAX INCREASES WOULD BE REINSTATED)


Single making 30K - tax $8,400
Single making 50K - tax $14,000
Single making 75K - tax $23,250
Married making 60K - tax $16,800
Married making 75K - tax $21,000
Married making 125K - tax $38,750

Under Obama your taxes will more than double! How does this affect you? No explanation needed. This is pretty straight forward.





INHERITANCE TAX

MCCAIN

0% (No change, Bush repealed this tax)



OBAMA

Restore the inheritance tax

How does this affect you? Many families have lost businesses, farms, ranches, and homes that have been in their families for generations because they could not afford the inheritance tax. Those willing their assets to loved ones will not only lose them to these taxes.

NEW TAXES BEING PROPOSED BY OBAMA



* New government taxes proposed on homes that are more than 2400 square feet

* New gasoline taxes (as if gas weren't high enough already)

* New taxes on natural resources consumption (heating gas, water, electricity)

* New taxes on retirement accounts and last but not least....

* New taxes to pay for socialized medicine so we can receive the same level of medical care as other third-world countries!!!

[patriotsblade]

Here's an independent analysis of both candidates tax plans.

http://www.taxpolicycenter.org/UploadedPDF/411693_CandidateTaxPlans.pdf


I'm just curious Wabby, where did you get your "facts"?

[Trueblue]

I wondered the same thing.

[Lone Laugher]

Yes, Wabby....please tell us where you got those numbers.

Wabby is either wrong or lying. It is just getting old.

For someone that always says that "Dems" can't handle the truth, Wabby sure avoids it a lot.

[Lone Laugher]

Uh-Oh! This idiot thread got moved to a place where the debate was already completed....somebody is gonna get all hot under the collar!

WHERE ARE YOU WABBY? Are you going to admit that you posted BOGUS data AGAIN and take responsibility for it like a man?

[patriotsblade]

I was sure this was out there somewhere.

http://www.factcheck.org/askfactcheck/would_obama_tax_my_profits_if_i.html

A new e-mail being circulated about Obama's tax proposals is almost entirely false.
Alert readers may already have noted that this chain e-mail does not provide links to any of Obama's actual proposals or cite any sources for the claims it makes. That is because they are made up.This widely distributed message is so full of misinformation that we find it impossible to believe that it is the result of simple ignorance or carelessness on the part of the writer. Almost nothing it says about Obama's tax proposals is true. We conclude that this deception is deliberate.

Our own sources for the following are Obama's own Web site and other statements, interviews with Obama's policy advisers, and a comprehensive analysis of both the McCain and Obama tax plans produced by the Urban-Brookings Tax Policy Center, plus additional sources to which we have provided links.

Home Sales: The claim that Obama would impose a 28 percent tax on the profit from "all home sales" is false. Both Obama and McCain would continue to exempt the first $250,000 of gain from the sale of a primary residence ($500,000 for a married couple filing jointly) which results in zero tax on all but a very few home sales.


Capital Gains Rate: It's untrue that Obama is proposing a 28 percent capital gains tax rate. He said in an interview on CNBC that he favors raising the top rate on capital gains from its present 15 percent to 20 percent or more, but no higher than 28 percent. And as for a 28 percent rate, he added, "my guess would be it would be significantly lower than that." Furthermore, he has said only couples making $250,000 or more (or, his policy advisers tell us, singles making more than $200,000) would pay the higher capital gains rate. That means the large majority of persons who pay capital gains taxes would see no increase at all.


Tax on Dividends: Another false claim is that Obama proposes to raise the tax rate on dividends to 39.6 percent. Dividends currently are taxed at a top rate of 15 percent, and Obama would raise that to the same rate as he would tax capital gains, somewhere between 20 percent and 28 percent but likely "significantly" lower than 28 percent. This higher tax also would fall only on couples making $250,000 or more or singles making more than $200,000.


Taxing IRAs and 529s: Contrary to the claim in this e-mail, raising tax rates on capital gains or dividends would not result in higher taxes on any investments held in Individual Retirement Accounts or in popular, tax-deferred "college funds" under section 529 of the Internal Revenue Code. The whole point of such tax-deferred plans is that dividends and capital gains are allowed to accumulate and compound tax-free, and neither Obama nor McCain proposes to change that. And as previously mentioned, any capital gains or dividend income from stocks, bonds or mutual funds owned outside of tax-deferred accounts would continue to be taxed at current rates except for couples making over $250,000, or singles making more than $200,000.


Doubled Taxes? The claim that "Under Obama your taxes will more than double!" is also false. The comparative rate tables this e-mail provides for McCain and Obama are entirely wrong, as we explained in an earlier article March 13 about another false e-mail from which these tables are copied. It is supposedly a comparison of tax rates before and after the Bush tax cuts, but it grossly overstates the effect of the Bush cuts. Furthermore, Obama proposes to retain the Bush cuts for every single income level shown in this bogus table.


Estate Tax. The claim that Obama proposes to "restore the inheritance tax" is also false, as are the claims that McCain would impose zero tax and that Bush "repealed" it. McCain and Obama both would retain a reduced version of the estate tax, as it is correctly called, though McCain would reduce it by more.

The tax now falls only on estates valued at more than $2 million (effectively $4 million for couples able to set up the required legal and financial arrangements). It reaches a maximum rate of 45 percent on amounts more than that. It was not repealed, but it is set to expire temporarily in 2010, then return in 2011, when it would apply to estates valued at more than $1 million ($2 million for couples), with the maximum rate rising to 55 percent.

Obama has proposed to apply the tax only to estates valued at more than $3.5 million ($7 million for couples), holding the maximum rate at 45 percent. McCain would apply it to estates worth more than $5 million ($10 million for couples), with a maximum rate of 15 percent.


"New Tax" Falsehoods: The e-mail continues with a string of made-up taxes that it falsely claims Obama has proposed. He has not proposed a tax on new homes with more than 2,400 square feet, or a new gasoline tax or a tax on retirement accounts. The most laughably false claim is that Obama would tax "water."

Two claims in this message, while not completely false, are still grossly misleading.

The claim that Obama would impose "new taxes on natural resources" may refer to his support for a cap-and-trade system to reduce carbon emissions, which indeed would impose large costs on industries burning coal, gas or oil and, indirectly, on their consumers. But McCain also supports cap-and-trade legislation, and even coauthored an early version of a bill that reached the Senate floor this year. Obama's plan would give the federal government more of the revenue from auctioning pollution permits than McCain's plan. Whether cap-and-trade amounts to a "tax" is a matter of interpretation. The fact is neither McCain nor Obama call it that.

There is also some truth to the claim that Obama would impose "new taxes" to finance his health care plan, depending on your interpretation of "new." He has said he would pay for much of his plan "by allowing the Bush tax cuts to expire for people making more than $250,000 per year, as they are scheduled to do." That would certainly be a tax increase for those high-income persons, compared with what they are paying now. But whether that's imposing a new tax, or just letting an old one come back, depends on your point of view. It may well be that Obama will eventually propose tax increases to finance some of his plan. We've noted before that the "cost savings" that he says will finance much of his plan are inflated and probably won't materialize, according to independent experts we consulted. But it's wrong to say that he's proposing such taxes now.

The short answer to our reader's question is, no, this message isn't real. It's a pack of lies.

[Trueblue]

Boy, the loons are working overtime to make up crap like that. Thanks for the straight talk. :lol

[Lone Laugher]

Wabby! It is time for you to apologize for spreading false information. Try an maintain a little self respect.

[Yellowdogtexan]

The e-mail is a bogus as the other crappy e-mails that wabby has posted. Whenever wabby posts something you know that it is (a) crap and (b) false.

A copy of this e-mail was posted on DU http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=132x6507424

[Yellowdogtexan]

The current system is not that progressive. As noted, most CEOs pay less as percentage of income compared to their secretaries. http://www.youtube.com/watch?v=RD7DCwXR2vY the Obama plan will do a great deal to restore progressivity to the system