Analysts Say Obama Offers Three Times the Tax Break for Middle Class

Source: Nashua Telegraph

Analysts say Obama offers three times the tax break for middle class

The Nashua Telegraph | June 12, 2008
By KEVIN LANDRIGAN

The tax cut plan of Democratic nominee to be Barack Obama offers three times the break for middle class families than proposals of likely Republican nominee John McCain, according to analysts working for a left-leaning think tank.

Families making between $37,595 and $66,354 of annual income with Obama would get an average tax cut of $1,042 per family while McCain’s tax cut for this group would be $319, the report states.

“The choice in November for tax policy may be the largest voters have ever had in this country,” said Jason Furman, director of economic policy for Barack Obama’s campaign. “John McCain’s tax cut is far larger, more regressive and far more radical than anything President George W. Bush has ever proposed. Barack Obama is proposing one of the largest income tax cuts for the middle class in American history.”

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“The choice in November for tax policy may be the largest voters have ever had in this country,” said Jason Furman, director of economic policy for Barack Obama’s campaign. “John McCain’s tax cut is far larger, more regressive and far more radical than anything President George W. Bush has ever proposed. Barack Obama is proposing one of the largest income tax cuts for the middle class in American history.”

Read more: http://www.barackobama.com/2008/06/12/analysts_say_obama_offers_thre.php

The income tax is already very small for everyone. It's the payroll tax (FICA) that is punishing. It instantly adds a 6% tax (12% for the self-employed) to the tax liability of anyone making under $97,000 per year.

The real answer amounts to three things:

1. Abolish the FICA limit of $97,000 so everyone contributes to it.

2. Return to the graduated income tax rates of the Kennedy era, which not coincidentally was the country's most accomplished. Anyone making over $1 million a year should pay well over 50% of anything over $1 million in income tax.

3. Tax "unearned income" (dividends and interest) at the same rate as "ordinary income" (wages.) Today, they're hardly taxed at all.

How will we get the rich to work? How will this economy function without rich people working 80 hours a week and not taking any vacations?

You sir have some dangerous revolutionary ideas! :applause:

It hasn't been reindexed in ages, so with inflation many who are getting hit hardest by it now weren't the initial targets of it.

The initial more wealthier targets of this tax can move their investments around a lot more (and not just be hit with this tax on employee stock plan stock, etc. like those at the low end are), whereas those less wealthy may have to sell off their stock prematurely at a loss just to pay off the tax. I remember when I had to pay AMT tax and received unemployment in the same year!

It is only capital gains and qualified dividends that get taxed at a lower rate. Just the Tax CPA in me.

Too big a sticking point. Deal breaker. I want this done. I'd go with taxing unearned at 25% after the first million and I doubt we'd get that. But, of course, start negotiations at, say, 45%.

Then can we talk about progressive capital gains? Less tax the longer you hold the stock and take some of the insanity out of the market?

Wait. On two...we have rampant inflation...make it the second million. But start negotiations with the first.