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Which Tax Plan Is Better for My Family?
Posted By Guinevere Nell On October 31, 2008 @ 3:16 pm In Ongoing Priorities | 7 Comments
A lot of focus has been on how the candidates’ tax plans affect different income groups. But, The America Dream is all about climbing the income ladder. A family that is “middle class” one year may be considered “rich” the next. This depends on economic growth, and on opportunity and the chance to succeed in entrepreneurial endeavors.
Analysis shows that McCain’s tax plan is better for economic growth , and reduces the burden on small business more . So, if families are able to better their conditions, then perhaps a better question is: which tax plan is better for my family?
The Center for Data Analysis Individual Income Tax Model was used to compare the average income tax rate faced by different kinds of families, under the Obama and McCain tax proposals. These are the effective rates, in other words, the actual percentage of income paid out after considering all exemptions, deductions and credits.
Even seniors on the average do worse (although seniors with less than $50,000 are exempt from taxes) under Obama’s plan. This is because seniors with more money face much higher taxes, and most seniors with less than $50,000 wouldn’t pay taxes under McCain’s proposal either.
The Tax Model also shows immediate relief for middle class households under McCain’s proposal. A household with Adjusted Gross Income (income before subtracting deductions and exemptions) between $70,000 and $75,000 with one dependent would on average face a higher tax rate under Obama’s tax plan than under McCain’s plan. This is because such a household would be able to take a larger exemption under McCain’s plan.
Article printed from The Foundry: Conservative Policy News Blog from The Heritage Foundation: http://blog.heritage.org
URL to article: http://blog.heritage.org/2008/10/31/which-tax-plan-is-better-for-my-family/
URLs in this post:
 better for economic growth: http://www.heritage.org/Research/Taxes/cda08-09.cfm
 reduces the burden on small business more: http://www.heritage.org/Research/Taxes/bg2203.cfm
 Image: http://www.foundry.org/wp-content/uploads/2008/10/effective-tax-rates.JPG
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