As we all know every politician that aspires to be an elected official learns early in their quest that people want a tax plan that is favorable to them personally. As we also all know that means no one wants higher taxes. The other consideration is that not all taxation affects all people. For example, capital gains tax rates have significant ramifications for some taxpayers while others are not impacted by capital gains rates at all; while marginal income tax rates and their associated income brackets apply to everyone with income.
For your review today I present information from a Tax Plan Comparison of the two leading presidential candidates from TaxFoundation.org.
Marginal Individual Income Tax Rates:
•Obama proposes that the current 10, 15, 25, and 28 percent rates continue but that the top two rates should be increased from 33% to 36% and the 35% rate should be increased to 39.6%. He also advocates eliminating all income taxation of seniors making less than $50,000 per year.
•McCain proposes continuing the rates enacted in the 2001-03 cuts.
Corporate Income Tax:
•Obama advocates elimination of capital gains taxes on start-up and small businesses to “level the playing field for all businesses by eliminating special-interest loopholes and deductions”.
•McCain advocates phasing in a cut in the tax rate from 35% to 25% to be phased in fully in 2015.
•Obama proposes a 45% tax rate on estates over $3.5 million ($7 million for married couples.
•McCain proposes a 15% tax rate on estates over $5 million ($10 million for married couples).
Social Security Payroll Tax:
•Obama advocates working with the control remaining in the social security system with an additional tier of taxation for incomes over $250,000 effective in 2018.
•McCain advocates supplementing the current system with personal accounts.
Alternative Minimum Tax:
•Obama is in favor of extending the AMT patch.
•McCain is in favor of phasing out the AMT.
Capital Gains & Dividends Taxes:
•Obama is in favor of raising capital gains and dividend tax rates to between 20 and 28%, keeping them equal.
•McCain is in favor of keeping the 15% capital gains and dividends tax.
The above information only highlights some of the tax policy changes being advocated by the Presidential candidates. It is important to review these policies and determine how your personal tax pictures might be changed by who you support at the polls in November when you cast your vote for the new President.
I hope you're enjoying Just the Basics on the Taxing Subject of Taxes!
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