Saturday, September 6, 2008

The battle cry of the Republicans - they'll raise your taxes!

And now a line straight from the frayed, crumbling Republican playbook…it goes like this: Democrats raise taxes; Republicans lower them (for the wealthiest and big corporations). It comes as no surprise that Sarah Palin dutifully trotted out that tired battle cry during her acceptance speech:

"Taxes are too high ... he wants to raise them. His tax increases are the fine print in his economic plan, and let me be specific. The Democratic nominee for president supports plans to raise income taxes ... raise payroll taxes ... raise investment income taxes ... raise the death tax ... raise business taxes ... and increase the tax burden on the American people by hundreds of billions of dollars...How are you going to be better off if our opponent adds a massive tax burden to the American economy?"

I'm beginning to sound like a broken record, but Sarah you should really do your homework. I realize you were thrown into the fray pretty quickly, having only met McCain once and talking briefly on the phone just prior to your nomination, but isn't that what handlers are for? Since they're keeping you away from media interviews you should have more time to brush up on the issues. Until you do, I'll help you out.

The non-partisan Tax Policy Center released a comparison of Obama and McCain’s economic plans and found that 95% of working families would have a tax cut under Obama's proposals. On the flip side 100 million Americans would have NO tax cut under McCain's proposals.

Obama plans to roll back the Bush administration's tax cuts (to the level they were when Clinton left office) for couples earning $250,000 and singles earning $200,000. (Rolling back a tax isn’t the same as raising it). Obama also plans a number of tax cuts for people who make less than those amounts. He wants to eliminate income taxes for seniors with incomes less than $50,000. He also proposes a $1,000 tax credit on income for working families ($500 for singles), to offset payroll taxes. The Tax Policy Center reported that under Obama’s plan "by 2012, middle-income taxpayers would see their after-tax income rise by about 5 percent, or nearly $2,200 annually.” Those in the top 1 percent would see an average 1.5% reduction in income as a result of the tax rollback.

The great irony is that McCain himself wanted to repeal the Bush tax cut until he realized he couldn’t win the Republican nomination by taking that position. Watch the clip.

Here’s a brief summary of McCain’s plan:

And if you compare new tax cuts under Obama and McCain’s plan, Obama’s plan actually provides more.

McCain's new tax cuts

  • Increase the dependent exemption by two-thirds (phased in)
  • Reduce the maximum corporate income tax rate from 35 to 25 percent (phased in)
  • Allow first-year deduction of 3- and 5-year equipment, deny interest deduction (expires
  • Convert R&D credit to 10 percent of wages incurred for R&D, make permanent
  • Suspend federal gas tax for summer 2008

Obama new tax cuts

  • Refundable "Making Work Pay Credit" of 6.2 percent of up to a maximum of $8,100 of earnings
  • Refundable "Universal Mortgage Credit" of 10 percent of mortgage interest for nonitemizers
  • Eliminate income tax for seniors making less than $50,000 per year
  • Extend childless EITC phase-in range, increase phase-out threshold
  • Increase EITC phase-in rate to 45 percent for families with three or more children
  • Increase to $5,000 the add-on to EITC phase-out threshold for married filers
  • Make CDCTC refundable and increase maximum credit rate to 50 percent.
  • Make saver's credit refundable and change formula to 50 percent match up to $1,000 of contributions
  • Make permanent R&D credit and renewable energy production tax credit
  • Mandate automatic 401(k)s and automatic IRAs
  • Increase Hope credit: 100% match rate on up to $4,000

Once you wade through the rhetoric, you understand that under the Republicans, ‘good times’ are really good for the wealthiest while ‘bad times’ are really bad for everyone else.


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