Truth. No.

Source. AP and LA Times in Minneapolis Star-Tribune 8/11/09

IT IS SIMPLE

Obama. Significantly reduces taxes for 95% of American families – from an average of $567 for families with incomes in the lowest 20% to $2,796 for families in the top 90-95%. – plus a $1,000 emergency energy rebate.

McCain. Keeps current policies — from an average of $21 for families with incomes in the lowest 20%, to $4,437 for families in the top 90-95%, to $48,862 for families in the top 1%.

Here are the facts.

Individual Income Taxes

Income Tax Rates

Obama. Keeps current tax rates for families with adjusted gross incomes (AGI) under $250,000 (more than 95% of families), and let tax rates revert to pre-2001 and -2003 rates for families with AGIs of $250,000 or more (less than 5% of families). Highest tax bracket for top 5% of AGIs at 36% and 39.6%. 

McCain. Tax rates unchanged from 2001 and 2003 rates for all incomes. Highest bracket for top AGIs at 35%.

Seniors

Obama. Eliminates income tax where AGIs, untaxed Social Security benefits, and tax-exempt interests total less than $50,000, and phases in tax for seniors with AGIs between $50,000 and $60,000.

McCain. No proposal.

Income Tax Exemptions

Obama. Maintain extension of dependent exemption. Phase out personal exemptions for families with AGIs over $250,000.

McCain. Maintain extension of dependent exemption. Phases in two-thirds increase in dependent exemption. Provide immediate increased exemption for married couples with AGIs of $50,000 with the increased exemption phased out for higher income couples.

Child Tax Credit

Obama. Extends the refundable credit.

McCain. Extends the refundable credit.

Earned Income Tax Credit

Obama. Increase childless worker phase-in and phase-out threshold. Doubles phase-in and phase-out rates for childless workers who pay child support.  Increases rate to 45% for workers with three or more children.

McCain. No proposal.

Making Work Pay Credit

Obama. Refundable, indexed credit of 6.2%, up to $1,000 per working family, on the first $8,100 of income and phased out beginning at AGIs of $150,000.

McCain. No proposal.

Emergency Energy Rebate

Obama. A $1,000 emergency energy rebate, based on the enactment of a windfall profits tax on oil companies, as a downpayment on permanent tax relief for middle-class families.

McCain. No proposal.

Child & Dependent Care Tax Credit

Obama. Make credit refundable, increase maximum credit to 50%, increase start of phase-down to $30,000, and set the flat 20% credit at AGIs of $58,000 and higher.

McCain. Nor proposal.

Mortgage Credit

Obama. Refundable, indexed credit for nonitemizers at 10% of mortgage interest up to a maximum of $800.

McCain. No proposal.

Savings

Obama. Creates a refundable, indexed Saver’s Credit with a 50% match for savings up to $1,000 of contributions and phased out for families with AGIs of more than $65,000.

McCain. No proposal.

Capital Gains & Qualified Dividends

Obama. Keeps current tax rate for families with AGIs under $250,000, and sets rate for families with AGIs of $250,000 or more at 20%.

McCain. Keeps current tax for all AGIs at 15%.

Dividends

Obama.  Keeps current tax rate for families with AGIs under $250,000, and sets rate for families with AGIs of $250,000 or more at 20%.

McCain. Keeps current tax rate for all AGIs at 15%.

Alternative Minimum Income Tax

Obama. Extends 2007 changes and indexes for inflation.

McCain. Extends 2007 changes, indexes for inflation, and in 2014 increases by 5% the joint exemption until it reaches $143,000.

Marriage Penalty

Obama. Make current tax policy permanent.

McCain. Make current tax policy permanent.

IRAs & 529 College Funds

Obama. No changes.

McCain. No changes.

Higher Education Credits

Obama. Replace Hope tax credit with American Opportunity tax credit that provides a 100% refundable, indexed tax credit for the first $4,000 of expenses provide the student performs 100 hours of community service upon completing his/her education. Includes phase out thresholds.

McCain. No proposal.

Health Insurance

Not considered here. More later.

OHER INDIVIDUAL TAXES

Estate Tax

Obama. Total exemption for estates valued at $3.5 million or less ($7 million for couples that set up required legal/financial arrangements), and a top tax rate of 45%. Note: Only about 8,000 estates (0.003) would be taxed under this proposal in 2011.

McCain. Total exemption for estates valued at $5 million or less ($10 million for couple that set up required legal/financial arrangements), and a tax rate of 15%.

Homes & Gasoline

Obama. No changes.

McCain. No changes.

Social Security

Obama. Increase rate by 1% to 2% for income of $250,000 or more starting sometime over the next decade.

McCain. No proposal.

EFFECT OF INDIVIDUAL TAX PROPOSALS ON AFTER-TAX INCOME

Average increase/decrease in after-tax income, assuming all proposals phased in, by income in 2009. Social Security taxes not included.

Lowest 20% (<$19,000)

Obama. Plus 5.5% (+$567).

McCain. Pl21us 0.2% (+$21).

Second 20% ($19,000<$38,000)

Obama. Plus 3.6% (+$892).

McCain. Plus 0.5% (+$118).

Middle 20% ($38,000<$66,000)

Obama. Plus 2.6% (+$1,118).

McCain. Plus 0.8% (+$325).

Fourth 20% ($66,000<112,000)

Obama. Plus 1.8% (+$1,264).

McCain. Plus 1.4% (+$994).

Top 80-90% ($112,000<$161,000)

Obama. Plus 2.0% (+2,135)

McCain. Plus 2.5% (+$2,584)

Top 90-95% ($161,000<$227,000)

Obama. Plus 1.9% (+$2,796)

McCain. Plus 3.1% (+$4,437)

Top 95-99% ($227,000<$603,000)

Obama. Minus 0.1% (-$121)

McCain. Plus 3.3% (+8,159)

Top 99-100% ($603,000 <$2,872,000)

Obama. Minus 7.0% (-$93,709)

McCain. Plus 3.7% (+48,862)

 The bottom 95% of taxpayers have AGIs of less than $227,000.  The bottom 60% of taxpayers have AGIs of less than $66,000.

EFFECT OF ALL TAX PROVISIONS ON NATIONAL DEBT – INDIVIDUAL & CORPORATE

Obama. Over 10 years, increase by $5.9 to $5.4 trillion based on either proposed policies versus stump speeches.

McCain. Over 10 years, increase by $7.4 to $10.9 trillion based on either proposed policies versus stump speeches.

TAX SIMPLIFICATION

Obama. Provide taxpayers with the option of pre-filled tax forms for verification and signing.

McCain. Non-specific proposal.

SOURCE

“An Updated Analysis of the 2008 Presidential Candidates’ Tax Plans”, Tax Policy Center (Urban Institute and Brookings Institute), 15 August 2008. Visit www.taxpolicycenter.org à Library to review the entire report’s findings. Also www.barackobama.com –> Issues and www.johnmccain.com –> Issues.

YOUR FACTS?

Bush has pumpted approximately 2 trillion of deficit stimulus spending — an economcy-on-steroids – into the U.S. economy during his term. But the economy has failed.

This is tragic — a 60 percent increase in the national debt. All this deficit spending should have produced a wildly expanding economy. It hasn’t, and we are in recession.

McCain is more of the same — endless deficits and a sick economic future. It’s time for Obama.

Your facts?

Republicans believe in “spend and borrow” — irresponsible.

Democrats believe in “tax and spend” — responsible.

Look at the record.  Check out the national debt run up. Wake up Obama. Tell it like it is.

Your facts?