In Smokey and the Bandit, the classic 1970s beer and muscle-car chase-fest, the outlaw Burt Reynolds character is asked a series of cultural literacy questions by a comely hitchhiker played by Sally Field. Failing to answer them, he responds with a few of his own — all indigenous to his Southern roots — that she, in turn, can’t answer. He explains to her that sometimes the definition of smart depends on which part of the country you happen to be standing in.We can anticipate a similar chasm of ideology once presidential hopefuls Barack Obama and John McCain begin their expected series of debates — particularly when it comes to their tax platforms. Thus far, the two have clashed over a wide range of tax-centric topics, including Social Security, capital gains and, of course, the Bush tax cuts. The GOP senator from Arizona has accused his Democratic colleague from Illinois of mobilizing for the largest tax increase since World War II, while Obama, only half-jokingly, accuses McCain of running to serve out a third Bush term.
Under Obama, if you currently make more than $250,000 per year, you might want to be a bit concerned. He has called for letting the Bush tax cuts expire, as well as hiking taxes on those making over $250,000. His plan for payroll taxes would boost the cap on income subject to Social Security withholding, which is currently set at $102,000. He’s also called for cutting taxes for people making less than $75,000 a year (which the Bush tax cuts already did at that level, a fact obviously unknown to him and his advisors) and eliminating taxes on senior citizens who make less than $50,000 per year. Obama said that his plan would raise capital gains taxes to 20 percent from the current 15 percent level — below the 28 percent that the GOP had projected. He wants to exempt small businesses and start-ups from capital gains taxes.
McCain’s plan, which he claims would stimulate growth, proposes slashing the maximum corporate income tax rate from 35 percent to 25 percent, as well as eliminating the Alternative Minimum Tax and extending the Bush tax cuts. He also wants to increase the $3,500 income-tax exemption for dependents by $500 each year beginning in 2010 until it reaches $7,000.
According to the non-partisan Tax Policy Center, both proposals carry price tags accompanied by at least 12 zeroes. McCain’s plan would reduce federal revenues by $3.7 trillion, Obama’s by $2.7 trillion. The TPC admitted that that doesn’t take into account the costs of health care proposals by either candidate or how either plans to maintain funding for the Iraq conflict. Meanwhile, both candidates want to slice the estate tax. McCain has proposed a 15 percent rate and a $5 million exemption, Obama a 45 percent rate and a $3.5 million exemption.
Obama has said, “When it comes to the economy, John McCain and I have a fundamentally different vision of where to take the country.”
It appears that no matter what part of the country you’re standing in, or for whom you cast your ballot, it promises to get more expensive.
Register or login for access to this item and much more
All Accounting Today content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access