Obama versus McCain on Taxes

For those of you interested, here's some good information on Obama's tax proposal versus McCain's. Don't put too much stock in this though -- I'm sure things will change a LOT no matter who's elected (as they always do.) That said, at least this lets you know what each candidate is thinking.

Comments

[Kevin]

Wow - I better vote Obama since I'm nearly $1,500 better off under his plan.

[Edmund]

Woo hoo, looks like I get a tax cut from Obama.

But it looks like John McCain would give me a bigger one though...

Either way, I was going to vote for Obama anyway.

["Mo" Money]

Voting for President because your taxes will either increase of decrease is not very mature in my humble opinion. There are many other issues that need be considered.

[Tim]

Nice chart. To Kevin: nowhere on that chart would you be $1,500 better off with Obama (compared to McCain). Also, these "everything else being equal" numbers do not take into account the strain on the economy that will result from higher overall takes (including corporatations) from Obama.

[Craig]

Corporations don't pay taxes on losses only profits. Reducing their profitability will result in reducing the taxes on the wealthy, so you're right there is a second effect. But so what? Trickle down economics doesn't actually trickle down. Think of it this way: reducing taxes for 95% of the population will result in more money being spent (most people spend everything they get, except for the wealthy) which gets funneled back to corporations and the wealthy.

[Kevin]

Tim - I wasn't going by the chart, I was going by the link provided where you input your info.

I'm still waiting for McCain to explain where all this money is going to come from if no one is getting an increase.

[WiseMoneyMatters]

You know, Obama's plan looks good on paper, but when you listen to Robert Kiyosaka or read books like The Millionaire Next Door, you realize that Obama's tax increase on the rich really won't work. Most people with incredibly high incomes have well payed accountants which make them look like they pay a minimal amount in taxes.

In the millionaire next door, you have multi-millionaires who pay less percentage in taxes than a regular middle class worker even though the tax brackets say he should pay much more.

The lower income brackets usually don't make enough money to affect taxes too much anyways. The people that pay the most in taxes are the middle/upper middle class people. When you really look at these people, the difference is minimal between the two candidates.

[Kevin]

Wise -

I'm a CPA, and a pretty good one at that. That being said, you can't create deductions out of thin air, so I find it hard to believe some of these stories about the multi-millionaires paying ultra-low taxes. (I have not read MND.)

Except for the capital gain/dividend 15% rate (which Obama will do away with) they are paying the highest rates. And even if they are paying the same rate as Joe Taxpayer, their 25% is a greater amount than his 25%.

[Michael]

Despite there promises neither McCain or Obama are going to lower taxes, there are several bipartisan studies that suggest they will both add to our federal deficit. As a nation we cannot continue to spend more than we make and keep lowering taxes. Each dollar that we spend today plus interest will be payed back in the future.

[Todd]

Frankly, I doubt Obama will cut taxes at all. There hasn't been a tax-cutting Dumbocrat who secured the nomination for the Presidency since JFK.

I well recall the "tax cut" Bill Clinton proposed. After being elected he said, "Oops, the deficit is worse than I though it was - better raise taxes instead." I suspect that Obama, if elected, will behave similarly. After all, he's lied about everything else, so why not taxes, too?

Even assuming that Obama did cut taxes according to his plan and Congress enacted those cuts, McCain's plan is a lot fairer inasmuch as he cuts everyone's taxes, including those of the most productive Americans.

[Lord]

Tax cuts not paid for are just future tax increases.

[kitty]

"Corporations don't pay taxes on losses only profits. Reducing their profitability will result in reducing the taxes on the wealthy, so you're right there is a second effect"
What do you think will happen with your 401K when large corporations show less profit? What about the salary you get paid by the same corporation? What about your job?

It's easy to say - "corporation make a lot of money". But corporations employ people. When corporation show less profit they start cutting costs. Cutting costs often leads to layoffs. I work for a large corporation. Guess what happened in the past after we have a couple of quarters when the company failed to meet Wall Street expectations? Layoffs happened. Also, no raises for most employees.

Also, for large corporations, a large percentage of the stockholders are our mutual funds, employees, and other small investors. Guess who owns these mutual funds - you and me in our 401K via large company index. Did you enjoy your 401K performance this year? I sure didn't. Employeees also often own stock via ESPP.

Companies' profits are important for many people, not just very rich.

BTW - one good thing about owning individual stocks and not just mutual funds is that you really pay attention to companies' earning reports. I wonder if owning only funds puts a level of abstraction between "company profits" and "my index fund performance". These aren't separate entities.

[matt]

If you want to maximize the growth of any economy release the shackles of taxation. European countries, like Ireland, learned this from us as we take their former slippery slope down the path toward socialism.

The chart on the previous page was flawed, Obama is not going to cut taxes on the lowest 50 percent because as of last year they did not pay taxes; in fact, they PROFITED off of the US through the "stimulus plan(s)". Obama is playing Robin Hood, except instead of stealing from just the rich, he is stealing from good honest hard working people like me and you to give to the poor.

Corporations are owned by 52 percent of the population. Anyone with a 401k, IRA, college savings account, owns a corporation (DUH). Also, 1 - 100,000's of jobs rely on corporations that are just as easy to create in another country. if you create communism here then all the productive (I mean evil) business will find some place else to go (some place that finds them less evil perhaps).

[Chris]

Democrats so rarely lower taxes that I find it hard to believe Obama would save me any money. I have a feeling his promises are a lot like Bill Clinton's in 1992 when he promised tax cuts while campaigning, then got into office and said essentially that he didn't realize how bad things were and therefore could not give the proposed tax cut afterall.

[Elizabeth]

I just think that its confusing
I'm going into my first election i turn 18 right before elections
and I'm confused
Taxes are not the only issue but alot of it.
I hope I can help my country :)

[MasterPo]

Obama my lower my taxes specifically but the taxes he will raise will increase the costs of many things. So I end up paying more regardless.

[MasterPo]

Elizabeth - There is nothing wrong in voting what you feel is best for your wallet. Don't ever let anyone try to shame you into thinking otherwise.

Just making an educated decision and voting you're already way a head of a lot of your peers! :-)

[Heavystone86]

All of you who keep saying that we should cut taxes, cut taxes, and then...cut some more taxes must have either made money with Bush in office or have been in a cave for the last 8 years. He cut so many taxes and yet we are in the largest deficit in American History. I personally do not mind paying taxes because I know they pay for services that we've come to know as free. Now with the cutting of taxes, libraries will sell their books to reduce the amount to take care of, prices for transportation will go up, you now have to pay for emergency calls that go to the fire department, and tuition for schools are increasing dramatically while teachers are being laid off. All of these things have been happening because of Bush's tax cuts, you just don't see this for yourselves because you don't work for the government. Is this really the America that you want to live in, "I don't pay taxes anymore!..But now I pay for every service that used to be paid for by taxes.

[MasterPo]

Heavy - First, Bush (or any President for that matter) has no control over what your local municipality charges for services. If your local community charges you to call 911 that's not the President's doing.

Second, news flash! Things like that have been happening for YEARS long before President Bush. 25 years ago NYC charged some people (those who could pay, drug dealers, criminals etc got it for free - go figure!) when they called 911 for an ambulance. Happened to my uncle on several occations. Also started charging for garbage pick up, water use tax etc. All the while *increasing* property tax, sales tax and various other taxes.

I know it's a popular thing today to blame President Bush for everything (if your goldfish dies is it his fault too?) and to blame "the rich" but try not to be so cliche.