Tuesday, August 12, 2008

A side by side comparison! (From the Tax Policy Center)


Barack Obama

John McCain

New Tax Cuts

Refundable Making Work Pay tax credit of 6.2 percent of earnings up to a maximum of $8,100

Refundable Universal Mortgage Credit of 10 percent of mortgage interest for nonitemizers, capped at $800 ($8,000 of interest)

Eliminate income tax for senior making less than $50,000 per year

First-time buyers tax credit for new farmers

Small Business and Microenterprise Initiative tax credit of 20 percent on up to $50,000 of investment in small owner-operated businesses

Allow first-year deduction of 3 and 5-year equipment, deny interest deduction (expires)

Reduce maximum corporate tax rate from 35 percent to 25 percent

Increase the dependent exemption by 70 percent (phased in)

Suspension of the federal gas tax (18.4 cents per gallon) from this Memorial day until Labor Day

Adjustments to Existing Credits

Make R&D and renewable energy production tax credit (wind, solar) permanent

Extend childless EITC phase-in range and increase phaseout threshold, double the phase-in and phase-out rates for childless individuals paying child support, increase EITC phase-in rate to 45 percent for families with three or more children; increase add-on to EITC phase-out threshold for married filers to $5,000

Make CDCTC refundable and allow low-income families to receive up to a 50 percent credit for child care expenses

Make saver's credit refundable and change to a 50 percent match of the first $1,000 of savings, phases out beginning before $75,000

Increase Hope credit 100% match rate to $4,000 for college education and make refundable, rename American Opportunity Tax Credit

Mandate automatic 401(k)s and automatic IRAs

Convert R&D credit to 10 percent of wages incurred for R&D, make permanent

Capital Gains

Increase maximum capital gains rate to 25 percent

Require information reporting of basis for gains

Eliminate capital gains taxation of start-up businesses and provide capital gains tax break for landowners selling to beginning family farmers

Keep the current rates on dividends and capital gains

Bush Tax Cuts

Permanently extend marriage penalty relief, adoption credit expansions, 10,15,25, and 28% rates, EITC simplification

Restore 36 and 39.6% statutory income tax rates, Restore PEP and Pease phaseouts for households making more than $250,000, increase in PEP and Pease threshold

Make permanent all provisions other than the estate tax repeal

Alternative Minimum Tax

Extend and index 2007 AMT patch

Extend and index 2007 AMT patch, further increase exemption by 5 percent in excess of inflation after 2013 (temporarily)

Estate Tax

Make permanent estate tax with $3.5 million exemption and 45 percent rate

Make permanent estate tax with $5 million exemption and 15 percent rate


Give taxpayers the option of pre -filled tax forms to verify, sign, return to IRS

Give taxpayers the option of an alternative tax system with two rates and larger standard deduction and personal exemption

Revenue Raisers and Tax Havens

Eliminate oil and gas loopholes

Close loopholes in the corporate tax deductibility of CEO pay

Tax carried interest as ordinary, Increase the highest bracket for capital gains and dividends

Reallocate multinational tax deductions

Codify economic substance doctrine

Create international tax haven watch list

Other unspecified revenue raising provisions

Eliminate oil and gas loopholes

Unspecified corporate base broadeners

Eliminate earmarked projects from the budget, freeze nonmilitary discretionary spending for one year, eliminate programs.


Income-related federal tax subsidies for health insurance

Replace exclusion from income for employer sponsored health insurance with refundable credit of $2,500 for individuals and $5,000 for families


Social Security/payroll taxes: increase the maximum amount of earnings covered by Social Security

Require a 3/5 majority vote in Congress to raise taxes

Ban internet and cell phone taxes

Higher premiums for Medicare prescription drug coverage for single people earning more than $82,000 and couples earning more than $164,000

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