McCain/Obama tax plan analysis

[siamesedreamer]

Both John McCain and Barack Obama promise to cut taxes for the majority of Americans. But an Obama administration would redistribute income toward lower- and middle-class households, while a McCain White House would steer the bulk of the benefits to the wealthiest families, according to a nonpartisan analysis of the still-evolving tax plans of the presidential candidates.

Both plans risk causing more economic damage than improvement, according to the detailed study by the Washington-based Tax Policy Center. While some of Sen. McCain's tax cuts could lift economic activity, the "adverse effects of the resulting increased deficits may make the net effect of the plan economically harmful," the report says. Sen. Obama's plan similarly "would substantially increase the deficit" and could create "additional complexity" to the tax code by offering a range of targeted breaks.

WSJ - http://online.wsj.com/public/article/SB121319990210164643.html?mod=special_page_campaign2008_leftbox

Nonpartisan Tax Policy Center Analysis (pdf) - http://www.taxpolicycenter.org/UploadedPDF/411693_CandidateTaxPlans.pdf

Bottom line: McCain's plan increases the national debt $4.5 trillion over ten years and Obama's plan increases the national debt $3.3 trillion over ten years (although that figure does not include the added government costs for his universal health insurance proposal).

The march toward fiscal doom continues...

[Mandark]

Those figures are all relative to what would happen in the 10 year period if the current laws were in place, including (this is the important part, folks, so pay attention) letting all the temporary measures expire.

That means that it assumes the Bush tax cuts and the AMT fix would expire, so keeping those in part or whole counts as a massive cut.  Which is the standard way to do the accounting, but makes things sound scarier than they are.

Look at tables R1 and R2.  They both have a number for "Net revenue impact against tax cuts extended AMT-patched baseline".  McCain adds less than one trillion dollars to the deficit over ten years, while Obama cuts it by about $700 billion.

[siamesedreamer]

Yeah, I saw that. The whole analysis is pretty confusing in the way its written as it says several different conflicting things. I just saw the one part where it specifically compared the 10-year deficit numbers and used that as my bottom line.

[Rman]

I read a similar article in another publication.  Fighting two wars and also improving infrastructure down the line will be keeping the deficit alive for years to come.

[Mandark]

That's the standard way to do it:  Compare the revenue of the proposed plan against the one already in the books over a ten year period.

Which is why the Bush cuts were temporary in the first place.  It made the ten year projections look better, and every year they could point to the projections and say "our policies will have the budget balanced!" when the budget was going to balance only when their policies expired.

Now it has the added bonus of making Bush's successor look massively irresponsible just for maintaining the status quo.  What we're seeing is largely an artifact of some disingenuous accounting back in 2001.

[FlameOfCallandor]

Republicans
Democrats

[FlameOfCallandor]

o if only there was a rational alternative

Yes, if only...