Making Cents from the Candidates’ Tax Plans

I 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.
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]

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