Thursday, August 21, 2008

McCain and Obama tax plans diverge on wealth


“The sharpening rhetoric between Sen. John McCain and Sen. Barack Obama over their competing plans to overhaul the nation's tax system has underscored one of the most profound differences between them – how they would target America's wealthiest taxpayers.

Under McCain, the rich would see their tax burden ease. Under Obama, their rates would rise dramatically.

For much of the campaign, the two candidates have talked sparingly and obliquely about how they would deal with affluent taxpayers. But a recent volley of acid-edged campaign ads stirred up the tax issue, and a question posed last weekend by Orange County pastor Rick Warren zeroed in on how both men defined ‘rich.’

Obama said the dividing line was an income of $250,000 a year, while McCain responded somewhat flippantly that it was $5 million. McCain aides said later that the senator was joking, but his remark quickly became a campaign flashpoint.

‘I guess if you're making $3 million a year, you're middle class,’ Obama sniped, prompting a McCain aide to fire back: ‘It's not the job of the government to define who is rich.’

Where to draw the line among the nation's wealthiest taxpayers is the central difference between rival tax blueprints that offer starkly differing formulas for reviving a faltering economy.

On Tuesday, new ads from both camps played on the public's rising anxiety about taxes, incomes and the volatile economy. ‘Three Times,’ an Obama television ad airing from Virginia to Colorado, savages McCain for lavishing $200-billion tax "giveaways" on ‘big corporations.’ McCain responded with ‘Millions,’ a radio ad that predicts Obama will ‘raise taxes on your income, your electric bills, even your life savings.’

The two camps immediately issued rebuttals, each claiming its position on taxes was being distorted by the opposition. The Obama campaign contended that the overwhelming majority of Americans would not see a tax increase under his plan, only the wealthiest 5% or so. The McCain side retorted that the "$4 billion" in tax breaks for oil companies mentioned in Obama's ad was misleading because McCain is proposing an across-the-board tax cut for all corporations and is not favoring the oil industry.

A close look at their proposals shows that the differences fall neatly along the traditional policy gulf that has long divided Republicans and Democrats: liberating the wealthy with tax cuts to stimulate the nation's prosperity versus raising their rates to redistribute the tax burden and pay for crucial government programs.”

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