Cajun is not going to kiss me anymore... the same co-worker who sent yesterday's email sent this today :
I was confused over that one email going around about the Politics of each Canadate so I sent it to my brother who works Washington, DC for the government.
He researched it and sent me back the honest facts he found on this email. I just wanted to share it for honestly I still do not know who to vote for.
Origins: Every
recent presidential election cycle has brought e-mailed forwards that paint the Democratic candidate as a proponent of a "tax and spend" philosophy (who will inevitably implement significant tax increases on taxpayers across all income levels) and present the Republican candidate as a model of fiscal conservatism, and the example quoted above fits this pattern.
However, this example is off the mark both in its broad strokes and in its particulars. According to the Tax Policy Center's analysis of the candidates' proposed tax changes, the primary difference between them would be distributional, with Senator Obama's proposals favoring lower-income taxpayers and Senator McCain's favoring higher-income taxpayers:
McCain: The average taxpayer in every income group would see a lower tax bill, but high-income taxpayers would benefit more than everyone else.
Obama: High-income taxpayers would pay more in taxes, while everyone else's tax bill would be reduced. Those who benefit the most — in terms of reducing their taxes as a percentage of after-tax income — are in the lowest income groups.
The statements made about the candidates' proposals for changes in specific taxes (or implementation of new taxes) are also all erroneous or grossly misleading. as we note below:
CAPITAL GAINS TAX
MCCAIN: 0% on home sales up to $500,000 per home (couples). McCain does not propose any change in existing home sales income tax.
OBAMA: 28% on profit from ALL home sales
The statement that Senator Obama proposes instituting a 28% tax "on profit from ALL home sales" is false. Both candidates' proposals would leave intact an existing capital gains exemption for the first $500,000 per household of profit from the sale of a primary residence. Homeowners who realize a profit higher than the current exemption amount from the sale of their primary residences might pay more capital gains tax under an Obama presidency than they would now, but those instances currently constitute a very small minority of all home sales. (For the purposes of this article, the term "per household" refers to married couples who file taxes jointly.)
The mention of Obama's imposing a 28% capital gains tax as president is also misleading. Senator Obama has indicated he would likely raise the capital gains tax rate, but he has not specified by how much — the 28% figure is a previous (i.e., pre-Bush) capital gains tax rate which Obama stated he would certainly not exceed while noting that his capital gains tax rate would likely be "significantly lower":
Q: How do you plan to change the tax code when it comes to capital gains? How high will that 15 percent rate go?
A: Well, you know, I haven't given a firm number. Here's my belief, that we can't go back to some of the, you know, confiscatory rates that existed in the past that distorted sound economics. And I certainly would not go above what existed under Bill Clinton, which was the 28 percent. I would — and my guess would be it would be significantly lower than that. I think that we can have a capital gains rate that is higher than 15 percent.
DIVIDEND TAX
MCCAIN: 15% (no change)
OBAMA: 39.6%
The notion that Senator Obama is proposing raising the tax rate on dividend income from its current 15% level to a 39.6% is unfounded. Obama has proposed taxing dividends at the same rate as capital gains, and although he hasn't yet specified a figure for the latter, he has already stated (as noted above) that he "certainly would not go above" 28%. Also, the proposed increase would only affect households with income of more than $250,000 per year (a figure that encompasses about 2% of U.S. households.)
INCOME TAX
MCCAIN: (no changes)
Single making 30K - tax $4,500
Single making 50K - tax $12,500
Single making 75K - tax $18,750
Married making 60K - tax $9,000
Married making 75K - tax $18,750
Married making 125K - tax $31,250
OBAMA: (reversion to pre-Bush tax cuts)
Single making 30K - tax $8,400
Single making 50K - tax $14,000
Single making 75K - tax $23,250
Married making 60K - tax $16,800
Married making 75K - tax $21,000
Married making 125K - tax $38,750
Under Obama your taxes will more than double!
This is an erroneous interpretation of federal income tax rates based on the premise that Senator McCain favors extending the temporary tax cuts instituted by the Bush administration in 2001 and 2003, while Senator Obama does not. However, both senators said they would favor extending those tax cuts; the difference is that Senator Obama said he would not favor extending the tax cuts for households with incomes of $250,000 or more per year. Since none of the tax tables listed above applies to that income level, their inclusion is irrelevant and misleading. As noted at the head of this article, taxpayers in the brackets covered by these tables would likely see a greater reduction in taxes under Senator Obama's proposals than under Senator McCain's, an outcome reflected in the Tax Policy Center's estimate of how the average tax bill could change in 2009 under each candidate's proposals:
MCCAIN OBAMA
Income Avg. tax bill Avg. tax bill
Over $2.9M -$269,364 +$701,885
$603K and up -$45,361 +$115,974
$227K-$603K -$7,871 +$12
$161K-$227K -$4,380 -$2,789
$112K-$161K -$2,614 -$2,204
$66K-$112K -$1,009 -$1,290
$38K-$66K -$319 -$1,042
$19K-$38K -$113 -$892
Under $19K -$19 -$567
INHERITANCE TAX
MCCAIN: 0% (No change, Bush repealed this tax)
OBAMA: Restore the inheritance tax
Pretty much everything asserted about the inheritance tax (also referred to as "death tax" or "estate tax") in these few short statements — that President Bush repealed it, that Senator McCain would maintain it at 0%, and that Senator Obama would "restore" it — is wrong.
In general, estate tax currently applies only to estates valued at more than $2 million and tops out at a 45% rate. The exclusion amount is already set to rise to $3.5 million in 2009, followed by a repeal of the estate tax in 2010, and then a reinstatement of the estate tax in 2011 with the exclusion amount reverting back to $1 million and the tax rate topping out at 55%.
Senator McCain has proposed raising the estate tax exclusion amount to $5 million and setting a maximum estate tax rate of 15%, while Senator Obama has proposed raising the estate tax exclusion amount to $3.5 million and maintaining the maximum estate tax rate at its current 45% level.
NEW TAXES BEING PROPOSED BY OBAMA
* New government taxes proposed on homes that are more than 2400 square feet
* New gasoline taxes (as if gas weren't high enough already)
* New taxes on natural resources consumption (heating gas, water, electricity)
* New taxes on retirement accounts and last but not least....
* New taxes to pay for socialized medicine so we can receive the same level of medical care as other third-world countries!!!
Three of these five statements are completely erroneous: Senator Obama has not proposed a tax on "homes that are more than 2,400 square feet," any "new gasoline taxes," or "new taxes on retirement accounts."
The phrase "taxes on natural resources consumption" presumably refers to Senator Obama's "cap and trade" proposal for reducing carbon emissions, a proposal which would likely impose additional costs on polluters but isn't technically a "tax":
Obama supports implementation of a market-based cap-and-trade system to reduce carbon emissions by the amount scientists say is necessary: 80 percent below 1990 levels by 2050. Obama's cap-and-trade system will require all pollution credits to be auctioned. A 100 percent auction ensures that all polluters pay for every ton of emissions they release, rather than giving these emission rights away to coal and oil companies. Some of the revenue generated by auctioning allowances will be used to support the development of clean energy, to invest in energy efficiency improvements, and to address transition costs, including helping American workers affected by this economic transition.
As for "new taxes to pay for socialized medicine," Senator Obama has proposed funding his health care plan through additional revenues generated by not extending the Bush administration's temporary tax cuts for persons making more than $250,000 per year. Whether allowing a portion of already-scheduled expiration of temporary tax cuts to take place really constitutes "new taxes" is a matter of semantics.
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