Although I try to take my fathers advice not to talk about politics, I think that it is important for you to know what the two presidential candidates are proposing as changes to the federal tax system.
The 2008 presidential election promises to be a spirited campaign. Now that the Democrats have voted Hillary off the island, we can watch Barack Obama and John McCain explore their differing visions for America in a dignified, intellectual manner, reminiscent of the famed "Lincoln-Douglas" debates that set such a responsible tone for presidential politicking. Unless, of course, the campaign consultants have their way, in which case we can expect a slug fest that makes the "Thrilla in Manila" look like a local school board race.
I'm looking forward to seeing each candidate's Vice-Presidential pick. Obama should probably look to someone older and more conservative, with a military background -- in other words, John McCain! (Just a little humor).
To help you see the differences, we've prepared a chart outlining each of their main proposals in the areas of income taxes, employment taxes, estate taxes, and health care financing.
You'll find McCain's proposals, for the most part, to be what you'd expect from a reputed "maverick" Republican looking to shore up support with his party's base. Make the Bush tax cuts permanent. Require a three fifths Congressional majority to raise taxes. Cap the estate tax at 15% and apply it only to estates topping $10,000,000. But McCain also proposes to eliminate the deduction for employer-provided health insurance (currently a $90.6 billion annual tax preference) and replace it with a credit of $2,500/person and $5,000/family for health insurance premiums. (This would likely eliminate the deduction for Medical Expense Reimbursement which is a great tax break for many small businesses.)
Similarly, Obama's proposals are mostly what you'd expect from a progressive Democrat. Keep the "best" part of the Bush tax cuts benefiting married couples, families with children, and small businesses. Restore the 36% and 39.6% marginal rates on the highest earners, and raise the capital gains rate back to 20% or even 28%. Establish new, refundable tax credits for students and homeowners who don't itemize. But Obama's plan includes a wild card too -- specifically, eliminating the current $102,000 "wage base" on income subject to Social Security (and self-employment) tax.
Of course, merely proposing a specific change doesn't mean we'll actually see it become law. If McCain wins, he'll likely face a Democrat-controlled Congress, which would greet his proposals skeptically. If Obama wins, he's unlikely to enjoy veto-proof majorities in either house.
To make sure that I am following the wisdom of my father, I am talking policy here not politics. I certainly don't want to intimidate or offend anyone.
Please let me know if you have any questions.
The 2008 presidential election promises to be a spirited campaign. Now that the Democrats have voted Hillary off the island, we can watch Barack Obama and John McCain explore their differing visions for America in a dignified, intellectual manner, reminiscent of the famed "Lincoln-Douglas" debates that set such a responsible tone for presidential politicking. Unless, of course, the campaign consultants have their way, in which case we can expect a slug fest that makes the "Thrilla in Manila" look like a local school board race.
I'm looking forward to seeing each candidate's Vice-Presidential pick. Obama should probably look to someone older and more conservative, with a military background -- in other words, John McCain! (Just a little humor).
To help you see the differences, we've prepared a chart outlining each of their main proposals in the areas of income taxes, employment taxes, estate taxes, and health care financing.
You'll find McCain's proposals, for the most part, to be what you'd expect from a reputed "maverick" Republican looking to shore up support with his party's base. Make the Bush tax cuts permanent. Require a three fifths Congressional majority to raise taxes. Cap the estate tax at 15% and apply it only to estates topping $10,000,000. But McCain also proposes to eliminate the deduction for employer-provided health insurance (currently a $90.6 billion annual tax preference) and replace it with a credit of $2,500/person and $5,000/family for health insurance premiums. (This would likely eliminate the deduction for Medical Expense Reimbursement which is a great tax break for many small businesses.)
Similarly, Obama's proposals are mostly what you'd expect from a progressive Democrat. Keep the "best" part of the Bush tax cuts benefiting married couples, families with children, and small businesses. Restore the 36% and 39.6% marginal rates on the highest earners, and raise the capital gains rate back to 20% or even 28%. Establish new, refundable tax credits for students and homeowners who don't itemize. But Obama's plan includes a wild card too -- specifically, eliminating the current $102,000 "wage base" on income subject to Social Security (and self-employment) tax.
Of course, merely proposing a specific change doesn't mean we'll actually see it become law. If McCain wins, he'll likely face a Democrat-controlled Congress, which would greet his proposals skeptically. If Obama wins, he's unlikely to enjoy veto-proof majorities in either house.
To make sure that I am following the wisdom of my father, I am talking policy here not politics. I certainly don't want to intimidate or offend anyone.
Please let me know if you have any questions.
Larry Kopsa CPA
