Making Cents from the Candidates’ Tax Plans

September 15, 2008     Posted in News

McCain and ObamaI don’t know about the rest of you, but I always scoffed at people when they complained about taxes. “Please,” I would say, “how do you think the government pays for things, hmm? Money doesn’t grow on trees you know. Taxes are a good thing.” This never produced the result I was looking for. Instead of applauding my common sense, or giving me a cookie in appreciation (although I did always suggest this course of action), people rolled their eyes. They sighed. They complained about youth not knowing anything these days.


By Meregan

Now, over the course of my employment history, I have helped 70-year-old women try on bras. I have scooped ice cream for ten hours straight. I have swiped cards at my dining hall after rugby practice lets out and the guys are pulling said cards from the sweaty waistbands of their shorts (um, ew). I fact checked articles on light bulbs and dumpsters all summer. I work hard for my money, darn it, and losing a substantial portion to taxes does not make me happy.

The upcoming election is a hot topic, and the discussion of what’s going to happen to our taxes is part of the reason. People are already paying large portions of their income to our government and it’s always scary to try and figure out just what the next person in office is going to do to your paycheck. Instead of paying for the new suit you need for work, that money just might be sucked into the oblivion of our national deficit.

So what to do? Well, for starters, look at the candidates’ tax proposals. Yeah, you might think that Democrats usually lower taxes for us in the peanuts range of the income scale and Republicans mean tax breaks for the wealthy, but in reality it’s far more complicated.

Take Obama, for example. If we only consider his individual tax changes (let me tell you, there are a lot of different taxes out there, for both corporations and individuals), we’re looking at tax cuts for what he terms “the middle class,” where he considers the wealthy anyone earning more than $250,000 annually. McCain is also proposing tax cuts, on a smaller scale. How is a person to choose?

The Los Angeles Times published a chart estimating how much the average federal tax (including taxes on income, dividends, capital gains, and payroll) bill will change for the everyday American under the two different proposals. Recent college graduates enter the job market at a variety of salaries, but for our purposes, let’s say it’s generally between $20,000 and $60,000.

If you’re on the lower end of that scale, McCain’s tax cuts are going to save you about $124, according the LA Times. In contrast, Obama’s will let you keep about $950. A week of groceries versus a month’s rent. The upper end of that scale means a difference of saving either $282 under McCain or $1,035 under Obama.

However, the more you earn, the more the gap narrows until the top 20% of earners, where Obama’s proposal will actualy increase the tax rate. You’re not there yet, but maybe your parents are, or you will be in a few years. McCain’s largest tax cut for the wealthiest 1% of earners saves them about $31,943, but Obama’s proposal adds a whopping $114,238. In my case, my parents pay my college tuition, for which I am profoundly grateful. That additional $114,238 covers almost three years for me.

I’ve heard people argue that the wealthy still make a lot of money despite huge tax payments, but the reality is, they generally work for it. Given the pain I feel at losing that $7.50 of an hour worked at an ice cream shop, I can only imagine what it feels like to give up one hundred grand. What does that represent to them? A week away from their family? Never being home in time for dinner? When looking at these tax proposals, absolutely consider your income range but also consider how the rest of the population will be affected. Yes, Obama’s plan is awesome for people like me, but McCain’s offers some relief for everyone. It’s at least something to think about.

I graduate in May of 2009, and as I refuse to undergo any more schooling for the time being, I will (hopefully) have a job. With the typical entry level salary for a college graduate, Obama’s proposal is going to be more beneficial to me, and probably to many of you CC readers. However, McCain is also offering us a break, just not quite as much of one. When it comes down to it, both plans will (unfortunately) increase our national debt by several trillion dollars. Different means, same results.

As for me, I will just be grateful if there are any tax cuts at all. Giving up the money from that hour I personally fitted someone’s grandmother into a Miracle Bra almost made me cry.

[photosource:www.msnbc.msn.com/id/24353211/wid/%2011915773]

8 Comments on "Making Cents from the Candidates’ Tax Plans"

  1. Finnish Engineer says:
    Mon, 15th Sep 200810:38 am 

    So greed killed your youthful idealogy?

  2. Wayne says:
    Mon, 15th Sep 200811:10 am 

    More like reality.

    Nice article.

  3. C says:
    Tue, 16th Sep 20086:39 am 

    The wealthiest SHOULD pay more. Hard work doesn't guarantee good pay, in fact I'm willing to bet the average teacher or nurse "earns it" way more then that CEO that's been giving himself bonuses left and right. Taking a little of a lot still leaves you with a LOT. No offense but even under Obama I bet you're parents can still afford to send you to Brown.

    MOST PEOPLE AREN'T RICH. The vast majority of people benefit from Obama's plan. One hundred grand to the middle class? That's big money. One hundred grand to someone who makes MORE than 99% of the population….yeah I'm betting they can afford it.

    Finally, I was getting sick of this "trickle down" ideological crap.

  4. CG says:
    Tue, 16th Sep 20087:00 am 

    I agree with C.

    Hard work does not equal a nice paycheck. My father works more than 80 hours a week, he does not get the nice paycheck associated with long hours, does not get to be home on time for dinner each night nor does he get to spend as much time with us as we'd all like. Why does he do it? So my brother and I had a roof over our heads and food on the table.

    Shouldn't the goal of a government FOR the people By the people aim to HELP the MOST people?

    Shouldn't we all promote the well being and comfort for those less fortunate than us. The Obama tax plan offers citizens of the United States a way to help those who need it the most. People with earnings under $60,000 are not lazy and should not be treated that way.

    If anything I would hope people in the top 1% of the income bracket would realize how fortunate their lives have been and in turn help the 99% of people who have not been so blessed.

  5. StygianAgenda says:
    Tue, 16th Sep 20087:20 am 

    I gotta agree with 'C' on this. Over the past decade, I've watched the cost of living become higher & higher with each year, mostly due to our war efforts in the middle & far east. Granted, taxes are generally what funds these wars. The thing is, if a war is lost, who stands to lose the most? The wealthy, you can bet. So, it's in their best interest to pony up to higher tax rates to protect their interests in this country.

    The average person in the USA makes less than $80K per year, whilst the 'fortunate few' make out like bandits. I look at it like this, "you wanna be rich in this country? then be prepared to pay the price for such".

    Now, you may be thinking I'm just bitter, and maybe I am, but I work for the government (State govt) and our pay is laughable at best, most of us making about 27% below the national average for the same job in the private sector. My annual salary is roughly $32K-p/y, and I'm lucky to see 70% of that. I wonder, how does that taxation rate compare to the suits at Haliburton or any of the other defense contractors that stood to make so much money from going to war. Afterall, isn't it their saying that "war is profitable"? I guess it is if you own a defense company. But, for the average Joe that is out here trying to make ends meet, it's anything but profitable… and don't get me started about the congressional 'Golden Fleece retirement plan'. We're out here losing our collective asses, whilst the upper 10% are complaining that they have to throw in like everyone else? Fugidabowdit… eat the rich!

  6. SomeAudioGuy says:
    Tue, 16th Sep 20087:46 am 

    Thing is, we've gotta stop looking at it like it's revenge on the upper class. For the last 7 years the rich have rolled around in some of the most fiscally irresponsible tax cuts in American history. With TWO wars going on, that means were putting these wars on credit … to China. As the rich tend to support these administrations, I feel it's also partly their responsibility to help pay off their debt.

    Getting the middle class back on their feet means more spending power for everyone. See, trickle DOWN doesn't work, but trickle UP does. Why rich people haven't figured this out is beyond me. Keep the lower and middle class buying and you make MORE money, and your money is worth MORE. Right now the value of our currency is below Canada's. Is no one else upset about that?

    This should be a multi-pronged solution though. Not just rolling back the tax cuts on the rich, but also going after companies that do business here but have PO Boxes over seas, and getting rid of tax credits for companies that ship jobs over seas.

    Lastly, you fail to bring up one important point. Tax BREAKS might stop at $200K, but if you make up between $200K and $600K, then your tax remains the same as under Bush.

    People making OVER $600K probably have access to much better financial advisers and accountants…

  7. Cecca says:
    Tue, 16th Sep 20089:10 pm 

    It's not just *who* they're taxing, but also *how* they're taxing. The McCain plan taxes employer-paid health benefits which, given as that is many people's only form of health care, I have a massive problem with.

  8. Matt says:
    Wed, 17th Sep 20087:20 am 

    Yes, Obama wants to give you about a grand. But it's not going to do much for you when you lose your job because the small business you work for has to fire 40% of its staff due to these new taxes. Nearly 80% of small businesses in America pay taxes through the personal filings of the owners (S corps etc.). Obama wants to raise taxes on these owners by a LOT more than 114k (that's just the average number). Have fun with that $1000, I'm sure it'll cover everything you need.

    And SomeAudioGuy, the poor don't hire. Trickle up is just as false as trickle down. There will always be rich and poor, haves and have nots. People should just be happy that, as Americans in 2008, they are living some of the most comfortable and privileged lives in the history of the world.

    StygianAgenda, great idea, screw the rich! Oh wait, the top 10% of earners pay 70% of taxes. And they rarely use the services their tax dollars go towards (medicare, ss, etc). Be thankful that people who are more successful financially pay for the things that you can't afford.

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