The Tax Plans: Obama Helps the Poor and Middle Class, McCain Favors the Super-Wealthy (Surprise!)
An analysis of both candidates’ tax plans has been released (PDF) from the Tax Policy Center, a respected source of analysis on such matters. And guess what: Obama’s plan is far, far better, unless your surname is Hilton or Gates. But if you’re an average working schmoe, then you’re definitely going to want to vote for Obama.
On the plus side for McCain, he cuts taxes for everybody. On McCain’s bad side, he gives the biggest cuts the super-rich, with only a paltry handout to anyone making less that $38,000 a year. Even up to incomes of $66,000, you’re looking at a $320 cut–not very good, considering that recent hikes in gas prices probably have already eaten up much more than just that. But millionaires can look forward to saving more than a quarter million per year–sweet, if you’re rich.
Obama, on the other hand, gives everyone with incomes up to about a quarter million dollars a year a cut of up to almost $3000, with the cuts spread much more liberally at the lower end than McCain’s. While McCain would give low-income earners an insulting $19, Obama makes a huge difference in their lives with a $567 tax cut. All the way up to earners of $112K per year, Obama gives more back to the earner than McCain. And even for the upper middle class, Obama’s plan is not bad–with a tax hike of a mere $12 for those making up to $600,000 a year, I think it’s reasonable to say that you’ll have to really have tons of money before Obama starts taking anything away from you. And while Obama really socks it to Bill Gates, I think that people making eight figures or more can well afford to pay their way after the cash cow days under Bush.
Neither Obama’s nor McCain’s tax plans look hopeful in terms of balancing the budget anytime soon, but the report makes one thing clear: while neither will balance the budget, McCain’s tax cuts will cost about a trillion dollars more over the next ten years. McCain claims that he’ll offset this by spending cuts, but what he means is that he’ll increase spending for the military while slashing stuff like Medicare. McCain may claim that he’ll get it by cutting pork, but there simply isn’t even close to that much pork to be found.
Here’s the total breakdown of the tax plans by income level:
As you can see, Obama’s plan helps those who need help the most, while McCain continues Bush’s policy of giving the most help to the people who need it the least, and leaving people on the bottom rung with crumbs at best. And here’s a bonus: McCain has been going around for a while now claiming that Obama is “going to raise your taxes by thousands of dollars per year,” and has even recently raised the Cold-War-era canard of “tax and spend.” One can only assume that McCain was addressing an audience of millionaires, because that’s the only group which will have their taxes raised by “thousands of dollars” under Obama’s plan.
Income
Obama’s Plan
McCain’s Plan
$0 ~ $19K
cut $567
cut $19
$19K ~ $38K
cut $892
cut $113
$38K ~ $66K
cut $1,042
cut $319
$66K ~ $112K
cut $1,290
cut $1,009
$112 ~ $161K
cut $2,204
cut $2,614
$161K ~ $227K
cut $2,789
cut $4,380
$227K ~ $603K
raise $12
cut $7,871
$603K ~ $2.9M
raise $115,974
cut $45,361
$2.9M ~ Bill Gates
raise $701,885
cut $269,364
What’s more significant here is that Obama’s plan is progressive, while McCain’s is regressive–in other words, Obama gives a higher-percent break to lower-income earners, while McCain gives the biggest percent-of-income breaks to the wealthy.
Income
Obama’s Plan
McCain’s Plan
$0 ~ $19K
-5.3%
-0.2%
$19K ~ $38K
-3.2%
-0.4%
$38K ~ $66K
-2.0%
-0.6%
$66K ~ $112K
-1.5%
-1.2%
$112 ~ $161K
-1.6%
-1.9%
$161K ~ $227K
-1.5%
-2.3%
$227K ~ $603K
0%
-2.3%
$603K ~ $2.9M
+6.1%
-2.4%
$2.9M ~ Bill Gates
+7.9%
-3.0%
Good post Luis. I like the way you presented that information.
So does “Bill Gates” count as the official way to mark the top possible income?
One question. On Obama’s plan in dollar amounts for the $227 – $603K range, you have “raise $12” but in percentage you have “-1.7%” How does that work?
Stuart: Yeah, I wondered about that as well. When I thought about it, I considered that it was probably some accounting thing that factored in changes in tax rates due to change automatically. However, upon closer inspection, it turns out simply to be a typo, which I will correct in a moment. The chart is laid out in quintiles and percent levels, and the “key” to switch to dollar-income levels is far from easy to read. Sorry about the confusion.
Update: now I’ve discovered that it’s more than just a simple typo–there were two different charts. I’m sorting it out now.
Update 2: seems that there were three charts–one for 2009 and two for 2012–for Obama’s plan, which looked almost the same; I took the % numbers from one of the 2012 charts, instead of the 2009 chart that the $ figures were from. Should be all good now. Thanks for the heads-up!