Franco, as they say, is still dead.
In the first detailed analysis of the Barack Obama and John McCain tax plans, the Tax Policy Center has run their proposals through the Big Computer and discovered that their schemes are, well, painfully predictable. Each would raise the national debt by trillions of dollars. Obama would use the money to provide modest tax cuts to low- and moderate-income people while imposing stiff tax hikes on the very wealthy. McCain would cut taxes a bit for the working-class and a lot for the rich.
Obama, who casts himself as an out-of-the box, post-partisan politician, has put together a fairly conventional Democratic tax plan. Despite McCain’s recent claim that Obama would raise taxes for all, it turns out that middle-class families would do better under Obama (who would cut their taxes by $1000 in 2009) than McCain (who would cut them by only $300). Obama’s generosity comes at a price, however, He’d raise the national debt by a staggering $3.3 trillion over the next decade, and that includes more than $900 billion in promised revenue raisers that TPC could not verify.
McCain, who once opposed President Bush’s 2001 and 2003 tax cut as a give-away to the rich, but now embraces them, has designed a plan more consistent with the New McCain than the old. It is as Republican a plan as Obama’s is Democratic. The top 20% of taxpayers get a 3% reduction in after-tax income in 2009, while the lowest-earning 60% would get less than 1%.
The real contrast, though, is at the very top: In 2009, taxpayers making more than $2.9 million (the top 0.1%) would get a nearly $300,000 tax cut from McCain, but face a whopping $700,000 tax hike from Obama.
Keeping to the pattern of Bush-era Republicans, McCain would also go deeper into the red than Obama. Including interest, he’d increase the national debt by $4.5 trillion over a decade. To what I suppose is his credit, McCain only includes about $365 billion in unspecified revenue raisers in his plan compared with Obama’s $900 billion. Let’s just say both have wills far bigger than their wallets.
McCain, especially, says he’ll offset many of his tax cuts with spending reductions. And, in fairness, the TPC analysis looks only at taxes, not spending or health care. It also excludes two extremely controversial tax proposals—Obama’s plan to raise Social Security payroll taxes and McCain’s promise to give people the option to file a vastly simplified return. TPC could not model either because the campaigns did not provide enough details.
Finally, a quick word about baselines. Both McCain and Obama insist that we should assume that the Bush tax cuts will be made permanent before estimating what their own tax cuts will cost. This is little more than an outrageous bit of accounting legerdemain. There is, in fact, zero chance that all the Bush tax cuts will be made permanent, just as there is no chance they will all be allowed to expire.
