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How are you feeling today about the economy? The candidates? The Dow Jones rebounded Monday, setting a record for the biggest single-day increase. Since then, it’s seesawed violently, exhibiting an alarming and unprecedented volatility.
The economic future for Americans is just as alarming. That’s why the final presidential debate focused so much on economic issues (See Wednesday’s post for more). Joe the plumber’s concerns about Obama’s tax policy echo many Americans’ concerns. Joe now admits that Obama’s policy would not increase his taxes.
Just how different are the tax policies of the two presidential contenders? Very different, according to a panel of experts who met this week at the University of Michigan. (Watch the video here.) Their tax policy differences reflect deep differences in basic values.
McCain focuses on cutting business taxes, a classic free-market approach to stimulate economic growth. He would, for example, cut the corporate income tax from 35% to 25%. He would cut the capital gains tax from 15% to 7.5%.
Obama wants to cut taxes for middle-income taxpayers. He would end Bush’s tax cut for those making more than $250,000 a year. And, low-income Americans and seniors would get new tax credits. The capital gains tax would revert to what it was before Bush. For every new full-time job created, the business would get a $3,000 tax credit.
Those are just a few details. Overall, what’s the effect? McCain’s tax plan would reduce tax revenues by $100 billion more than Obama’s, the experts estimated.
But neither candidate proposes a revolution.”There is no sign of fundamental tax reform,” said Joel Slemrod, the Paul W. McCracken Collegiate Professor of Business Economics and Public Policy and director of the Office of Tax Policy Research at the Ross School. “And there’s no sign that tax policy would address the serious fiscal imbalance between the promises of Social Security and Medicare and our unwillingness to pay for it.”
Whose tax policy do you prefer? Would you want to see a revolution of the tax system?
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