Wednesday, August 13, 2008

Obama’s Senior Citizen Tax Plan Draws Criticism

Although Presidential hopeful Barack Obama deserves to be commended for thinking outside the box with his tax proposals (high capital gains increases, energy tax credits, etc.), many of his aspirations are getting heavily criticized by tax professionals around the country. Below is a quote from another article from the Associated Press on how one proposals of his in particular is getting a lot of negative attention. You can read the full text at Obama's 'no income taxes on seniors' draws critics.

“If you're a senior citizen and earn less than $50,000 a year, Barack Obama has a deal for you: a life free of federal income tax.

Sounds appealing, right? Maybe to many seniors. But tax policy experts in Washington are giving it bad reviews. They see it as another subsidy for senior citizens, who already get federal help through Social Security and Medicare and often have economic advantages over other demographic groups.

Seniors typically have paid off their mortgages, many have investments and usually don't pay taxes on their Social Security benefits. The kids are usually grown, so they're not saddled with day care or college costs.

‘The odds are the retired folks - they're getting pensions, they're getting Social Security, they have investment assets, they own a house - so ... they're better off than somebody who is 30 or 40 years younger who's trying to buy a house (and) trying to start saving,’ said Clint Stretch, managing principal of tax policy for Deloitte Tax.

The Obama campaign says the idea would give tax cuts averaging about $1,400 to 7 million seniors who are battling inflation with mostly fixed incomes. The campaign also says the plan would relieve millions of older people from having to file complicated tax returns.”

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