CNNMoney.com Senior Writer
McCain and Obama want to change the bottom-line effects of the tax code. Here's a dollars-and-cents breakdown of what their plans could mean for you.
John McCain and Barack Obama have starkly different philosophies about tax policy – how to raise the revenue needed to support government programs, spur growth and ensure economic fairness.
But voters really want to know one thing: How would the presidential candidates' views trickle down to their tax bills? A report released Wednesday by a nonpartisan policy group in Washington, D.C., takes a big first step toward answering that question.
According to the Tax Policy Center's findings, the common assumptions most people make about the plans of McCain, the presumptive Republican nominee, and Obama, the Democrats' pick, are not wildly off-base.
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.
Under both plans, all American taxpayers could pay a price for their tax cuts: a bigger deficit. The Tax Policy Center estimates that over 10 years, McCain's tax proposals could increase the national debt by as much as $4.5 trillion with interest, while Obama's could add as much as $3.3 trillion.
The reason: neither plan would raise the amount of revenue expected under current tax policy – which assumes all the 2001 and 2003 tax cuts expire by 2011. And neither plan would raise enough to cover expected government costs during those 10 years.
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