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  • Different Tax Plans, Different Futures

    It looks more and more like Joe the Plumber was on to something about taxes, though you wouldn’t know if from most of the polls and media. The Heritage Foundation has the details in our new study: If a President McCain got his way on tax reform, Americans could expect to see jobs, the economy and their own disposable income grow much faster than if a President Obama were to push through his proposals.

    As this chart shows, the economy would grow by $320 billion more in 10 years under John McCain’s tax plan than under Barack Obama’s, adjusted for inflation. More than twice as many jobs would be created by the McCain plan — 3.43 million, compared with 1.58 million under the Obama plan.

    Both plans would reduce federal taxes, the study by Heritage’s Center for Data Analysis found. But McCain proposes $300 million more in tax reductions over 10 years. And he would advance good tax policy by emphasizing lower rates, while Obama would raise tax rates for individuals or businesses earning more than $250,000 a year.

    “Senator Obama believes the current tax system is not progressive enough and that higher taxes on the ‘rich’ should be used to give money to low-income individuals or those who do not work at all,” Heritage analysts William W. Beach, Karen Campbell, Rea S. Hederman Jr. and Guinevere Nell write in their summary.

    “Jobs respond more to McCain’s plan than to Obama’s,” they conclude, citing calculations using a computer-based analytical tool, Global Insight’s U.S. Macroeconomic Model. “Total employment grows an average of 915,800 jobs under Obama, 2.13 million under McCain. Both plans encourage job creation each year, but McCain’s leads to sig­nificantly larger growth — and sooner.”

    Some more evidence: A family of four would enjoy an average of $3,631 more in disposable income under Obama, but $5,138 more under McCain.

    McCain puts more emphasis on creating jobs and raising wages, Heritage fiscal policy analyst JD Foster writes at HumanEvents.com. In addition to extending all the 2001 and 2003 reductions in tax rates, McCain pledges to cut the corporate tax rate from 35 percent — second highest in the industrialized world — to 25 percent.

    By contrast, as Foster also argues in a related paper, the Obama plan would impede business investment by raising rates on capital gains and dividends. While increasing taxes on higher earners, Obama would cut taxes for — or give money to — those who already pay little or no income tax. How would Obama do this? By increasing the tax credit for child and dependent care, and making it refundable; creating a refundable “make work pay” credit for low-wage workers; and expanding the earned-income credit.

    Concludes Foster:

    Obama’s tax proposals exemplify his view that redistributing income among citizens is more important than increasing their earnings and creating jobs.”

    Posted in Economics [slideshow_deploy]

    5 Responses to Different Tax Plans, Different Futures

    1. Pingback: Illiterate Withdrawal » Different Tax Plans, Different Futures

    2. Barb - mn says:

      One thing about Obama, if it is already a failure, it is implemented, especially if it promotes hardships to others. He has people so easily convinced that his irrational ways are appropriate. My hope is that people open their ears and eyes.

      He's trained people to be ignorant, not even to listen to the other side. Hence: Howard Stern's experiment!

      Obama (and the like) has been oppressing people for a very long time. He says to a hard working independent man that that man should share his hard earned money, to give others a chance? How about encouraging people to take their own chance? Get rid of the social programs at the taxpayers expense! When there are programs there is no challenge when there is no challenge there is no will. Programs are costly, bias and unproductive. How about introducing them to equal opportunities? How about showing the hard work, dignity and will it took Oprah Winfrey to get to where she is today? Along with many others that worked hard to get to their success? People don't need you to open their door of opportunity, Obama. They just need you to get out of the way.

      Equal opportunity/Affirmative Action…contradicting isn't it?

      Obama, you are filled with excuses for everybody. You (and the like) have convinced people that they have no ability to carry out their right of freedom, their human qualities to be productive members of society. It's so much easier to label people "victim" then it is to build their strength to carry out their own human responsibilities, right, Obama? Beyond your pay? Your pay is beyond your worth. And the only thing you've achieved are titles. You have done nothing for the better of society. Just for the better of your pocket and your biases.

    3. Mayme, NY says:

      If tax cuts lead to jobs, then the last 8 years should have created tens of thousands of jobs. What happened?

    4. JT, KY says:

      Mayme, all you hear from the media about jobs is when people are losing them. The first 6 years of Bush's presidency we had a lowest unemployment rate EVER. Didn't hear the media talking about it then. Only when things are bad.

    5. Schulmis IN says:

      I consider my family to be one of the many families who are making it but at any moment could be on the verge of losing what we have worked so hard for. We did not buy a house that was more then we could afford. We live on our budget and I think that all americans even the gov't should get back to that. It is to easy in this day and age to just swipe the plastic and hope you can pay for it later. It seems that the american people are following the example that Washington set. Obama's tax plan puts my family in danger of having to do without the things we work so hard to obtain. Both my husband and I are employed by the types of small business that will see a tax increase under his plan and I fear that one or both could lose our jobs if he is elected. What good is a 3000 tax credit for creating a new job when the expense of hiring one new employee is so much more costly? What kind of insentive is that? Is that what Obama is looking for more and more people who need to depend on the gov't to survive? I feel that many families like mine who are I guess the middle of the middle class are in danger we are not I guess for a better lack of word "poor enough" to receive help but it will be families like mine that will be left out or even hurt by his tax plan. To take away the Bush tax cuts raises my taxes! Increasing the tax on corporations and the larger of the small businesses can not possibly create more jobs. It will lead to loss. I only hope that as election day looms ever closer that more and more americans will wake up and get a clue. If you are a middle middle class famly and employeed by a small business please really think about what Obama's tax plan could cost you!!

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