Here's one of the best explanations of the key differences between Obama's and McCain's tax plans yet (emphasis mine):
David Strom did this great nutshell of the differences between the two plans, and this is something that people need to understand. If McCain can effectively communicate these differences, he'll cream Obama in November. The question is: can he communicate these differences effectively? That 95% schtick is pretty effective all by itself with people who don't understand economics (which is most people), so McCain has his work cut out for him, especially given that more Americans currently trust Democrats on the economy - a sign of how badly damaged the GOP brand has become.
Some other questions I would throw out there for Obama:
1. You've proposed almost $1 trillion in new spending...how are you going to pay for that?
2. What are the details of your plan to 'cut' taxes on the middle class? How do you define who gets those cuts, and how much do they get?
3. You've proposed to allow Bush's 2001 and 2003 tax cuts expire, and those benefitted the middle class...how do you consider that anything other than a tax increase?
If anyone finds answers to these questions, please drop me a comment to let me know; I haven't seen them.
The short version is that Obama's plan sounds nice but would have only a small positive short-term effect for a lot of people (this is an assumption, given the lack of details I just mentioned), but a disastrous long-term economic policy. McCain, on the other hand, is proposing things that will help everyone across the board (which is usually mis-represented by the Left as being just tax cuts for the 'rich') and stimulate the underlying economy more than any certain group of people.
Which one is the best avenue for America? It's a question that anyone can answer, even someone who thinks there are 57 states.
There's my two cents.
You have to give him credit; the Obama tax plan has a lot of appeal to the average voter. The sales pitch, repeatedly endlessly, is that under Obama 95% of Americans would see their taxes go down.
Of course, it's not as simple as the Democratic candidate would like you to believe. Both the nature of the tax "cuts" Obama puts in place and the tax increases he is trying to sell could have serious impacts on future economic growth. Not to mention the ability of the American economy to get back on track building the number of jobs and growing wealth in this country.
John McCain's tax plan is far from perfect, but at its core is reducing taxes on job creation and kick-starting the economy. The idea behind the plan is that a good job with a strong and growing business is a far better way to drive Americans' incomes up than to distribute short-term government handouts, as the Obama plan does.
What is Obama offering? A witch's brew of tax credits that are aimed at various groups rather than lower taxes for everybody. Obama pays for these tax cuts by increasing the capital gains tax, keeping America's 2nd highest in the world corporate taxes, and whacking upper-income earners with dramatically higher taxes. All things aimed squarely at reducing economic growth. Tax credits for some and raising taxes on the wealthy are standard fare for Democrats. Call it Robin Hood economics, which is based on the idea that the wealth in America is fixed and the role of government is to make sure that it gets into the right hands.
Such a plan would make sense if the economy were built on stealing from the poor and giving to the rich; then Obama would be the Robin Hood figure who was simply setting things right by reversing the transaction.
But modern economies build their wealth through investment and job creation, and Obama's tax plan is aimed squarely at reducing investment and punishing wealth creation. Obama's tax increases to pay for his new programs amount to billions of dollars on investments.
John McCain's economic plan is aims to reduce the immediate tax burden of millions of ordinary citizens through tax cuts such as increasing the per-child personal exemption. But it also stimulates the economy by reducing the costs of doing business in the United States. More investment at home means more jobs and higher incomes for Americans.
Not to mention that millions of Americans are counting on their investments to help fund their retirement plans in the coming years, and Obama's plan takes a bite out of their future wealth.
As anyone who has thought about outsourcing knows, America could and should be a much better place to do business than it is. The United States could and should be much more competitive than it is because of our high taxes and complicated regulations.
That's the true story behind McCain's plans to reduce corporate tax rates and cut taxes on dividends. Believe it or not, the United States actually has higher corporate tax rates than almost any other country. McCain aims to cut those taxes to stimulate economic growth, and keep rates on capital gains low to encourage Americans to invest in the future.
Obama wants to increase the tax on capital gains, cutting the investments that drive our economy—and history shows that higher capital gains rates actually means less tax revenue for the government as people change their investment behavior. That slows economic growth by making America less attractive to do business in.
Obama's plan banks on Americans not understanding the basic economics of tax policy. It assumes that Americans would be willing to trade a more robust economy under McCain's plan for a shot at some tax credits they may or may not qualify for.
That's a bad bet for Americans and may well be a bad bet for the Obama campaign. His witches' brew of tax increases for some and tax credits for others add up to a substantial increase in taxes overall. Those "middle class" tax cuts might be paid for with fewer jobs for Americans.
That's a pretty high price to pay for a shot at a few tax credits.
Of course, it's not as simple as the Democratic candidate would like you to believe. Both the nature of the tax "cuts" Obama puts in place and the tax increases he is trying to sell could have serious impacts on future economic growth. Not to mention the ability of the American economy to get back on track building the number of jobs and growing wealth in this country.
John McCain's tax plan is far from perfect, but at its core is reducing taxes on job creation and kick-starting the economy. The idea behind the plan is that a good job with a strong and growing business is a far better way to drive Americans' incomes up than to distribute short-term government handouts, as the Obama plan does.
What is Obama offering? A witch's brew of tax credits that are aimed at various groups rather than lower taxes for everybody. Obama pays for these tax cuts by increasing the capital gains tax, keeping America's 2nd highest in the world corporate taxes, and whacking upper-income earners with dramatically higher taxes. All things aimed squarely at reducing economic growth. Tax credits for some and raising taxes on the wealthy are standard fare for Democrats. Call it Robin Hood economics, which is based on the idea that the wealth in America is fixed and the role of government is to make sure that it gets into the right hands.
Such a plan would make sense if the economy were built on stealing from the poor and giving to the rich; then Obama would be the Robin Hood figure who was simply setting things right by reversing the transaction.
But modern economies build their wealth through investment and job creation, and Obama's tax plan is aimed squarely at reducing investment and punishing wealth creation. Obama's tax increases to pay for his new programs amount to billions of dollars on investments.
John McCain's economic plan is aims to reduce the immediate tax burden of millions of ordinary citizens through tax cuts such as increasing the per-child personal exemption. But it also stimulates the economy by reducing the costs of doing business in the United States. More investment at home means more jobs and higher incomes for Americans.
Not to mention that millions of Americans are counting on their investments to help fund their retirement plans in the coming years, and Obama's plan takes a bite out of their future wealth.
As anyone who has thought about outsourcing knows, America could and should be a much better place to do business than it is. The United States could and should be much more competitive than it is because of our high taxes and complicated regulations.
That's the true story behind McCain's plans to reduce corporate tax rates and cut taxes on dividends. Believe it or not, the United States actually has higher corporate tax rates than almost any other country. McCain aims to cut those taxes to stimulate economic growth, and keep rates on capital gains low to encourage Americans to invest in the future.
Obama wants to increase the tax on capital gains, cutting the investments that drive our economy—and history shows that higher capital gains rates actually means less tax revenue for the government as people change their investment behavior. That slows economic growth by making America less attractive to do business in.
Obama's plan banks on Americans not understanding the basic economics of tax policy. It assumes that Americans would be willing to trade a more robust economy under McCain's plan for a shot at some tax credits they may or may not qualify for.
That's a bad bet for Americans and may well be a bad bet for the Obama campaign. His witches' brew of tax increases for some and tax credits for others add up to a substantial increase in taxes overall. Those "middle class" tax cuts might be paid for with fewer jobs for Americans.
That's a pretty high price to pay for a shot at a few tax credits.
David Strom did this great nutshell of the differences between the two plans, and this is something that people need to understand. If McCain can effectively communicate these differences, he'll cream Obama in November. The question is: can he communicate these differences effectively? That 95% schtick is pretty effective all by itself with people who don't understand economics (which is most people), so McCain has his work cut out for him, especially given that more Americans currently trust Democrats on the economy - a sign of how badly damaged the GOP brand has become.
Some other questions I would throw out there for Obama:
1. You've proposed almost $1 trillion in new spending...how are you going to pay for that?
2. What are the details of your plan to 'cut' taxes on the middle class? How do you define who gets those cuts, and how much do they get?
3. You've proposed to allow Bush's 2001 and 2003 tax cuts expire, and those benefitted the middle class...how do you consider that anything other than a tax increase?
If anyone finds answers to these questions, please drop me a comment to let me know; I haven't seen them.
The short version is that Obama's plan sounds nice but would have only a small positive short-term effect for a lot of people (this is an assumption, given the lack of details I just mentioned), but a disastrous long-term economic policy. McCain, on the other hand, is proposing things that will help everyone across the board (which is usually mis-represented by the Left as being just tax cuts for the 'rich') and stimulate the underlying economy more than any certain group of people.
Which one is the best avenue for America? It's a question that anyone can answer, even someone who thinks there are 57 states.
There's my two cents.
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