Obama, McCain and Taxes

[dollardaze]

It seems that the big question when considering the presidential candidates and their proposals for tax cuts, is.....what is middle class?Both presidential candidates promise tax cuts for the middle class. Yet under the tax proposals of Democrat Barack Obama and Republican John McCain, defining "middle class" becomes tricky.

For example, a worker making about $67,000 a year would see a $325 annual tax cut under McCain's plan and $1,200 a year under Obama's plan, according to an analysis by The Tax Policy Center, a Washington-based nonpartisan effort by the Brookings Institution and the Urban Institute.
For a worker making about $160,000, the cuts are almost identical - Obama would lower taxes about $2,500 and McCain about $2,100.

The Web site factcheck.org says "middle class" could mean the nation's middle 20 percent of income earners. That would be between $48,000 and $60,000, according to the Census Bureau, which estimated the 2007 median income for the 15-county Greater Cincinnati/Northern Kentucky area to be about $52,000.

Yet many people at either end of the spectrum consider themselves middle class. And above and below those thresholds of $67,000 and $160,000, the tax policies of the two candidates have pretty big differences.
"The difference is that Obama looks to redistribute the tax burden, make the pieces of the pie more equal, in other words, while McCain wants to grow the pie," said Gerald Prante, senior economist with the Tax Foundation, a Washington-based nonpartisan fiscal policy think tank.
While those are the objectives, Prante says, it's another question whether either plan will work.

For example, McCain would barely cut taxes for workers earning less than $40,000, while Obama would raise taxes on those making above $250,000 - although the Tax Policy Center says he would cut taxes for 81% of Americans, not the 95% his campaign claims.

In a recent poll sponsored by Ohio's major newspapers, including The Enquirer, cutting taxes for the middle class emerged as the favored way among six alternatives to stimulate the economy. Among 876 likely voters in Ohio surveyed Oct. 4-8, 31% listed the tax cuts as their top choice, according to the University of Cincinnati's Institute for Policy Research.

Cutting business taxes was the top choice among six for Republican voters, at 32% with 26% picking a middle-class tax cut.
Meanwhile, 37% of Democratic voters chose lowering taxes on the lower/middle class as their top remedy, and only 3% picked lowering business taxes.

When it came to raising taxes on upper-income households, 15% of Democratic voters listed that as their top choice, while 5% of Republicans chose that option.