I have been looking at the tax plans for both presidential candidates. I believe that both have good ideas and bad ideas. But it’s fair to say that we really don’t know if either of them will work.

It is true that Barack Obama’s plan is focused more on helping the “common man”, by providing tax relief to middle America - but at what expense?

Will a measly $1,000 a year really make the difference? How are we going to pay for it? The national deficit is growing at an alarming rate and additional tax cuts will just add to it.  This could have long term devastating effects on the economy and the value of the once “almighty dollar”.

On the other hand, John McCain’s tax plan calls for giving big business and the highest earners the larger tax cuts.  The “trickle down economics” of the republican plan doesn’t sit well with most Americans. But let’s be fair - it had worked in the past (some will obviously disagree).

So what is the right course to take on tax reform?  Everyone has ideas, but no one knows for sure.  I believe that giving the middle and lower classes a tax break can help the “psychology” of America.  It can help average folks feel like there is a future - that this economic crisis can be turned around.

The Obama plan calls for promoting and supporting domestic small businesses and that is great for America.  I believe that John McCain feels that same way, but he hasn’t really come across as the savior for the middle class.

I think both candidates agree that Alternative Minimum Tax must be eliminated. The tax reforms of 2001 expire in 2010 and AMT will tax more than 20 million Americans, if it is not changed.

John McCain’s plan calls for cutting the corporate tax rate to 25%, down 10% from the current 35%.  But will that only help big business?

Both candidates agree in health care reform. But again, it will cost trillions, yes trillions of dollars in the long run. Can we afford it - can we afford not to do it?

The bottom line is this: We won’t know what will work until a new president is elected,and the tax plan has time to mature.

I hate to say it - but most Americans want immediate gratification and middle class Americans deserve something to look forward to. The John McCain plan sounds great for big business and the wealthy - but what about the rest of us?

There are plenty of misunderstandings about the Obama Tax Plan. It’s time to lay out the facts and let the voters decide if the tax plan is in the best interest of America.

Before we do, it’s important to note that the Obama plan is all about giving middle and lower class Americans a tax break, which is approximately 95% of all Americans.

The John MCCain tax plan follows the tradition tax plans, giving the highest earners the biggest tax breaks, while providing little support to the middle and lower classes.  We all now this as trickle down economics.  The theory is that giving big business and the highest earners tax breaks, will trickle down to the average Joe, “no, not the average Joe Plumber”.  Bush subscribes to this policy - has it worked?

Here is what the Barack Obama tax plan is proposing:

Raise taxes for those making over $250,000 a year

Let’s be realistic - they can afford it.  Over the past eight years, the highest earners are the ones who have benefited from the Bush plan. They can afford health care, to buy a home, to maintain a home, to go on vacation and not have to worry about making ends meet every month. Even today, they are in much better shape, financially than most of America.

Increase the tax credit for low wage earners:

Barack is proposing to triple the amount of tax cuts for main street Americans. It sounds like a lot but in reality, it will barely be enough for us to get by.  But his plan is going in the right direction.

Here are some comments about the Obama Tax Plan:

Rea Hederman Jr., a senior policy analyst at the conservative Heritage Foundation “said the middle class would likely pay less under Mr. Obama’s plan than Mr. McCain’s.” [NY Sun, 8/15/08]

Obama’s tax calculator is “a very simple gadget that’s the most useful thing I’ve seen on any political website in a while.” [Forbes.com, 10/08]

Cut taxes for the small business owners and those companies that keep jobs in America

How many people do you know have lost their jobs because big business has shipped the jobs overseas?  I, for one, am directly affected by this - and I am still unemployed.  I am angry that the big companies are looking for a profit and forgetting about their employees, some who gave their sweat and blood for 10 - to 20 years, only to be told - get out!

Now, I’m starting my own small business - and I’m excited about the prospects under Barack Obama’s tax plan.  In order to compete globally, America must keep the jobs here and support our small businesses - we are capable of competing with anyone in world!

Here are a few more facts about Obama’s tax plan:

• Cut taxes for 95 percent of workers and their families with a tax cut of $500 for workers or $1,000 for working couples.

• Provide generous tax cuts for low- and middle-income seniors, homeowners, the uninsured, and families sending a child to college or looking to save and accumulate wealth.

• Eliminate capital gains taxes for small businesses, cut corporate taxes for firms that invest and create jobs in the United States, and provide tax credits to reduce the cost of healthcare and to reward investments in innovation.

• Dramatically simplify taxes by consolidating existing tax credits, eliminating the need for millions of senior citizens to file tax forms, and enabling as many as 40 million middle-class Americans to do their own taxes in less than five minutes without an accountant or tax advisor.

Tax Relief For Middle Class Families will include:

• A $1,000 Tax Credit
• A refundable $4,000 American Oppportunity Tax Credit
• A Universal 10% Mortgage Interest Tax Credit
• Elimate Income Taxes for Seniors Making Less than $50,000
• Expand retirement savings incentives
• Health Care Credits
• Expand the Earned Income Tax Credit
• Expanded Tax Credits for Clean Vehicle
• Simplify Tax System

We are hearing so many different intepretations of what the presidential tax plans will or will not do.  Here are the details of the John McCain tax plan:

1. Over five years, the starting points for the 28% tax bracket would be increased, from the current $43,050 in taxable income to $70,000 for couples, from $34,550 to $52,000 for single parents, and from $25,750 to $35,000 for singles without children. Note that the dollar figures refer to taxable income, so that, for example, families of four would get no benefit until their total income exceeds about $65,000 (in 1999 dollars). The full benefit would not be realized until income approaches $100,000. Because the new starting point for the 28% bracket for couples would be double the single level (although not twice the level for single parents), the change would reduce “marriage penalties” for many couples.
2. The $500 per child tax credit would be increased to $750 per child in 2001 and to $1,000 per child in 2002 and thereafter.
3. The estate tax exemption would be increased from the current $1 million to $5 million (effectively $10 million for couples), phased in over ten years.
4. Over five years, the standard deduction for couples would be increased by 19% (to twice the single amount) and for single parents by 16%. These changes would provide tax relief to many filers who take the standard deduction, as well as to some itemizers. (About 2 million current itemizers would switch to the increased standard deductions.)
5. Up to $200 ($400 for couples) in interest and dividends would be tax-exempt.
6. Limits for 401(k) plan contributions would be increased to $15,000 a year, and similar changes would be made to certain other kinds of retirement savings plans.
7. “Medical Savings Accounts” would no longer be limited to 750,000 taxpayers; the annual contribution limit on “Education Savings Accounts” would be doubled to $1,000; and new tax-deferred “Family Savings Accounts” would be provided for bottom-bracket taxpayers (few of who could afford to take advantage of them).
8. Long-term care insurance premiums would be made deductible.
9. Military personnel overseas would be exempt from tax on some or all of their earnings.
10. A 100% tax credit would be provided for gifts to public and private elementary and secondary schools, up to $200 a year. If all eligible taxpayers took advantage of this free opportunity to help their local schools, this provision could cost more than $17 billion a year (in 1999 dollars). Sen. McCain’s estimate of the size of his tax cuts does not appear to reflect the large potential cost of this school-aid program, which could be implemented more straightforwardly and with better targeting through direct grants to schools. (The distribution tables that follow do not include this credit, which appears to be intended as a backdoor way to funnel money to schools, rather than as a tax relief program.)
11. To offset much of the cost of his tax cuts, Sen. McCain proposes to curtail numerous corporate tax breaks, totaling $151.7 billion over five years. Sen. McCain provides an illustrative list, but does not specify the exact loopholes he would close.

According to CBS News, for the second day in a row, Sarah Palin focused the entirety of her attacks against Barack Obama on the Democratic nominee’s tax plan, rather than his personal associations.

“Just yesterday, we learned that America’s GDP actually fell in the third quarter of this year, and that confirms what we already know, and that’s that our economy right now is shrinking,” Palin said. “This is the worst possible time to raise taxes, but Barack Obama still wants to.”

Palin repeated her mantra that Obama has “an ideological commitment” that compels him to raise taxes.

“Now, his whole tax plan, really, it is, it’s so phony that it’s already starting to unravel, and we’re gonna call it the way that we see it,” she said.

Palin said that Obama’s definition of what constitutes the middle class seems to be evolving.

“And just this morning, Gov. Bill Richardson, a top surrogate for the Obama campaign, he who is working so hard to get Obama elected, Richardson said Obama’s tax plan would define middle class as $120,000 a year and under,” Palin said. “So now, we’re down to less than half the original income level and, just give it a little more time, and Barack Obama will be back to raising taxes on folks earning $42,000 a year.”

Appearing on KOAM radio this morning, Richardson said, “What Obama wants to do is he is basically looking at $120,000 and under among those that are in the middle class, and there is a tax cut for those,” according to a YouTube clip of the interview.

Richardson’s comments appear to have been a slip of the tongue, since the Obama campaign has not announced that it has changed its policy that everyone making less than $200,000 a year would get a tax cut and no one making under $250,000 a year would be burdened with a tax increase.

There seems to be a lot of confusion about the Obama-Palin Tax Plan. The true definition of the Obama tax plan appears to be elusive; it seems that everyone has a different opinion of exactly who will pay more, and who will pay under the democrat’s plan. Is it “fair and balanced”? It depends who you ask!