September 10th, 2008
08:25 PM ET

What they'll do to your tax bill

[cnn-photo-caption image=http://i2.cdn.turner.com/cnn/2008/images/09/10/art.obama.mccain.split.jpg]
Jeanne Sahadi
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.

Keep reading

Filed under: Barack Obama • Economy • John McCain • Raw Politics
soundoff (101 Responses)
  1. Mike

    CNN is so deceptive. They don't mention the thousands of people that will lose their jobs because the entreprenuers that create the jobs will be drained to provide Obamas vote-for-me and I will give you $1000 bribe. I guess if jobs go away, those that lose them will no longer be paying taxes, and maybe that counts as a tax count.

    It scares me how 50% of this country embraces socialism.

    September 11, 2008 at 9:37 pm |
1 2 3