There's a critique to be made of Barack Obama's tax plan from the left: at a time when massive public investment will be needed for many of the Democrat's primary domestic goals -- health care, alternative energy, infrastructure improvements -- the $700 billion worth of revenue his plan would raise over the next decade might not be enough to fund what his supporters hope he can accomplish. Last week, Paul Krugman blamed the "Bush poison pill" for Obama's unwillingness to challenge the Bush tax cuts as a whole:
The problem, I believe, is that even Democrats have bought into the underlying premise of the Bush years — that the best thing you can do for American families, or at least the only thing that can win their votes, is to give them a tax break.
A fair point. But let's not kid ourselves -- there is a big difference between the two presidential candidates' tax proposals. The Tax Policy Center's analysis of both plans, which we mentioned earlier this month, clearly explains the regressive nature of John McCain's approach:
The two candidates' plans would have sharply different distributional effects. Senator McCain's tax cuts would primarily benefit those with very high incomes, almost all of whom would receive large tax cuts that would, on average, raise their after-tax incomes by more than twice the average for all households. Many fewer households at the bottom of the income distribution would get tax cuts and those whose taxes fall would, on average, see their after-tax income rise much less. In marked contrast, Senator Obama offers much larger tax breaks to low- and middle-income taxpayers and would increase taxes on high-income taxpayers. The largest tax cuts, as a share of income, would go to those at the bottom of the income distribution, while taxpayers with the highest income would see their taxes rise.
Want more explicit examples? Look no further than the Center for American Progress' Wonk Room, which determined how each plan if implemented in 2006 would have affected both the McCain's and the Obama's pocketbooks specifically.
Had McCain’s tax proposal been in place in 2006, both families would have done incredibly well–saving even more than they did under the existing Bush plan. John and Cindy McCain would have walked away with $373,429 in their pocket, while the Barack and Michelle Obama would have saved $49,392.
Under Obama’s plan, both families would have saved, but substantially less. The McCains would have enjoyed an estimated savings of $5,641, due to the lower tax rates; the Obamas registering a $6,124 savings.
In 2006, the McCains earned over $6,000,000. The Republican nominee thinks folks like him should be entitled to an extra $373,000. This in the face of the $530 billion war he has steadfastly championed. As Ezra Klein writes:
[T]here's no way that reporters will stitch "$373,000" into the DNA of this election. But they should. McCain is running for president, during a war, despite a deficit, amid a likely recession, on a plan that gives him and his incredibly rich family almost $400,000 in tax cuts. It's absurd.
Absurd doesn't begin to describe it.
Post new comment