Personal Finance 

Obama vs. McCain Tax Plans: Obama Saves You More

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Rich people, watch out.

The Tax Policy Center broke down the tax policy proposals of your options this November and if you make over $603,000 a year, watch out!

If Barack Obama wins and his plans go through as vaguely outlined, expect your tax bill to go up $115,974. If you make over $2.9M, expect to pay an extra $701,885. Now, if John McCain wins and you make more than $603,000, breathe a sign of relief because you can buy yourself a brand new 2008 Porsche Cayenne with the estimated $45,361 you’ll save. If you make more than $2.9M, buy yourself a new house somewhere with the $269,364 you’d save thanks to McCain.

Of course I jest, because rich people don’t read blogs. They get their people to read blogs and then tell them about it as they are being served tea and crumpets (mmmm crumpets). For rest of us, the 89% that benefit more from Obama’s proposal, our wallets tell us to vote for Obama because his tax policy would result in a greater benefits.

Income McCain
Avg. Tax Bill
Avg. Tax Bill
(Obama – McCain)
$2.9M+ -$269,364 +$701,885 +$971,249
$603k and up -$45,361 +$115,974 +$161,335
$227k – $603k -$7,871 +$12 +$7,883
$161k – $227k -$4,380 -$2,789 +$1,591
$112k – $161k -$2,614 -$2,204 $410
$66k – $112k -$1,009 -$1,290 -$281
$38k – $66k -$319 -$1,042 -$723
$19k – $38k -$113 -$892 -$779
< $19k -$19 -$567 -$548

Incidentally, over the next ten years, the Tax Policy Center estimates that McCain’s proposal would increase the national debt by $4.5 trillion and and Obama’s could add as much as $3.3 trillion.

Of course, this is all in good fun, nice campaign fodder, but until things get signed then nothing is set in stone (how did Pelosi’s first 100 days go… forget the first 100 hours).

Here it is in beautiful chart form (courtesy of ChartJunk):
Chart Comparison comparing McCain and Obama Tax Plans

It does a good job of showing not only the differences in the tax rates but also the number of people affected.

What they’ll do to your tax bill [CNNMoney]
90% of Americans will pay less income tax under Obama than McCain [DailyKos]
The economy: McCain vs. Obama [CNN Money]

{ 43 comments, please add your thoughts now! }

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43 Responses to “Obama vs. McCain Tax Plans: Obama Saves You More”

  1. I always vote with my wallet!

  2. Frugal Dad says:

    I don’t know, it seems there is more at stake in this election than our wallets. I’ll balance this with other information on both candidates to make the most informed decision. Of course, it is worth noting that neither candidate can spend a dime without the approval of Congress, so this is all just pretty campaign speak. Thanks for sharing this.

  3. Darin H says:

    Except I expect Obama’s to be exactly like Bill Clinton’s middle class tax cut that turned into a middle class tax hike. I just don’t believe him. McCain? I don’t think he’s much of a tax cutter either, but I think he’ll keep spending under control much better which will let tax rates stay lower longer.

  4. Llama Money says:

    Mmmmm higher national debt…..

    I’m not sold on Obama, but I’m sold against McCain for sure. Tax cuts for the rich? Yea…. we need more of that….. let’s not worry about “cutting spending”, that’s just crazy talk..

  5. Slava says:

    The interesting part is that rich people most of the time have people who’s job is to find all loopholes to pay less taxes. So if you charge rich person a lot they’ll find a way to get their paycheck through some fake company in Bahamas. it’s the middle class and poor people who have almost no escape from hikes.

  6. MonkeyMonk says:

    I’m not sure what your point is Slava? Are you arguing for Obama’s plan or McCain’s plan?

    It sounds like your saying McCain’s plan is better since under Obama’s the rich will just escape paying taxes anyway. Sounds pretty defeatist to me.

  7. KRod says:

    Another Obama article?

  8. jim says:

    Obama’s been in the news a lot since finally beating out Clinton in the longest “car accident” ever known.

  9. Dough Roller says:

    As one who will not “benefit” from Obama’s tax proposals, I think we need to consider a few other details. First, even the “rich” today pay a ton in taxes. At the margin, they are losing 50% of the gross income between local, state and federal taxes. Why in the world should they pay even more? Second, what the tax analysis doesn’t consider are the programs Obama has proposed that will cost hundreds of billions a year forever. They all sound great (free health care, free college education, free retirement benefits), until our grandchildren have to pay for them. Cold chills run up my spine every time he talks about “shared prosperity.” Share opportunity I can embrace, but “share prosperity” sounds like something out of a George Orwell novel. What ever happened to “ask not what your country can do for you, ask what you can do for your country”?

  10. Llama Money says:

    I hear ya, Dough Roller. What we need is smaller government, not bigger. More programs, more spending….. this is not the way. Our Gov’t is so freakin huge and bloated it’s a wonder they ever get anything done…

  11. JoeTaxpayer says:

    I am not convinced by either man yet.
    I do worry when I hear a candidate respond to the observation that raising cap gain rates actually reduces revenue to the government with “I just want a fair policy”. The current 15% rate is actually 22.5% for most high earners (ever hear of AMT?) so there’s already a higher rate there. Raise it too high, and annuities become attractive again, and that money is locked away til retirement.

    Anyone else find the numbers above pretty odd? I mean is a family making $227K in the same league as those making $600K? Most of that average $7000 McCain savings is going to the $600K guy. I’d like to see the numbers with better granularity, every $50K or so in a grid, as shown, but with more steps. Or just give me the new rates these guys are suggesting. Funny, no matter what I earn, every change in tax rates hits my wallet. When I was just starting, the cuts went to the rich, as I increased my earnings, the cuts still go elsewhere. I don’t mind paying taxes, really, I just mind where the money goes. Eliminate pork barrel spending. Fund education and health care. I’ll pay for that.

  12. I’m with DoughRoller on this one. The “rich” already pay a buttload of taxes. I understand (and embrace to a point) the wisdom behind a progressive tax scheme. But… There’s a point when you just go overboard.

  13. James says:

    Why can’t we just have smaller government? If government were smaller than there would be less need for taxes.

  14. Curtis says:

    “Incidentally, over the next ten years, the Tax Policy Center estimates that McCain’s proposal would increase the national debt by $4.5 trillion and and Obama’s could add as much as $3.3 trillion.”

    I haven’t read the Tax Policy Center’s report, but here are my questions:

    1. Does this take into account McCain’s claim that he will veto earmarked appropriations?

    2. Does it take into account that if Obama is elected, there would be both a Democratic white house and congress? Historically, one party holding both offices usually means increased spending.

    3. By definition, a tax cut cannot increase national debt. It’s spending by congress that increases national debt. Whoever gets elected, we need to impress upon our congresscritters that spending must go down.

  15. Thomas says:

    What a lovely myopic viewpoint!

  16. DemandTruth says:

    It is a complete urban myth / republican talking point that democrats want BIGGER government. We absolutely do not! Democrats want SMARTER government – meaning gov’t that works FOR the “average working American” and NOT for huge multinational corporations. It has been a long 8 years of almost TOTAL REPUBLICAN CONTROL over our gov’t. And what have we got? MORE government intrusion than EVER BEFORE! Illegal spying on Americans (supported by republicans – opposed by democrats). Prying into our bedrooms and medical and family decisions (supported by republicans – opposed by democrats). Torture (supported by republicans – opposed by democrats). No – Democrats want the government to work FOR us again, not infringe on our civil liberties or give our tax dollars to war profiteers whose work is so shoddy it’s killing American soldiers on American bases with no accountability.

    But who are we kidding? Logical and critical thinking were lost to the republicans years ago. Now it’s just Karl Rove trash-talking points repeated over and over ad nauseum.

  17. Anonymous says:

    Your have been blinded by Democrats, and brain washed by the media. Your comment reeks of the mindless dribble I hear on a constant basis from my uninformed liberal comrades. You clearly have paid great attention to Obama’s speeches, but have done no real research on either candidates economic plans. Consider, if you will, the topic at hand.

    The biggest tax savings in Obamas’ plan is for the 19K-38K/year earners, netting them a whopping $779.00 extra per year, or basically $15.00/week. Likewise, according to the scale above, that same group of individuals would save about $6/week under McCain’s plan. Times are tough for many, but the $9/week difference is not going to change anybody’s lively hood. But every penny does help.

    Now imagine if you will, you were fortunate enough to work your tail off through life and climbed to point where you made $2.9mil/year. Under the CURRENT tax structure you pay about 40% of that to federal taxes, or $1.16 mil/year. McCain says 40% of your income going to the fed is to much. So he will cut you tax liability to 30%, or $890K per year. Putting money back in your (the tax payers) hand. Obama’s plan says 40% is not enough, and wants to increase your tax liability to about 64%, or $1.86mil per year. Enough to make a grown man cry.

    What do you think those wealthy people are going to do if the government gives them an extra $270K under McCain’s plan? Maybe invest it? Possibly Invest in their own company, creating jobs. Maybe they’ll blow it on house they don’t need like the above article suggests, but at least that would help the housing market right? In any case, it would probably go back into the economy in one way or another.
    What would they do Under Obama’s plan? Probably spend less and have less to invest. Definitely not going out and buying property. God for bid they may actually be some sort of entrepreneurial American, who might control the lively hood of some employees. I don’t even want to think of the implications there.

    In the end, McCains plan gives tax breaks to EVERYONE.
    Obama’s plan takes EXCESSIVE amounts from the rich, and gives SLIGHTLY MORE to the poor. Who wins here? Oh wait, it looks as if uncle sam does, and wait, thats under Obama’s Plan isn’t it. No that can’t be right, It’s the blood sucking republicans that do that stuff. After all, they want an extra $9 a week from some of us.

    Taking a law abiding Americans money because he is to successful in life is the BIGGEST GOVERNMENT INTRUSION OF ALL.

    By the way, I would get more money back in Obama’s plan, but I’m thinking about the country here, not the extra $200 I would see in my wallet. ( that’s $0.26 a week by the way)

  18. Shane says:

    I was responsible for that last post, accidentally left it as anonymous.

    Also wanted to clarify that I would get $3.84 per week not .26 cents, lol.

    Still sitting in McCain’s camp though…

  19. INDY says:

    Anonymous from 9/4/08 3:25pm,

    Your do make some good points, however, you cannot say that DemandTruth has been brainwashed and blinded. The wealthy, if they are smart, invest their money and invest to benefit themselves, probably in an overseas investment since republican rule has done a good job of stifling innovation in this country. And you did not address any of DemandTruth’s points about government interference which the Republican party seems to be all to good at.

  20. Shane says:

    Quite frankly, I was merely trying to address the topic at hand, and my post was already way to long addressing the current topic.
    But I am republican, so obviously I support the inhumane torturing of others, so I will go on.
    Illegal spying on Americans. I have to assume this refers to calls made to or from foreign nations being monitored to help prevent terrorist actions. Pure result of the events of 9-11, but definitely a sever intrusion on our privacy. However, If it can prevent one terrorist action that is only fraction of the size of the catastrophe of 9-11, it is a necessary means to an end.
    Spying into our bedrooms & medical records? I’ll need some better explanation on how this is supported by the republicans. I thought the democrats wanted the government to control health care. And if you can’t put two & two together, that would result in BIGGER government and complete disclosure to a federal agency of your medical records.

    Maybe we should stop all the finger pointing and name calling the has increased exponentially since the Gore-Bush election of 2000. It seems more important to bash any opposing idea, than to fight for a middle ground. It has become more important to highlight every misspoken word, than to grasp the issues at hand. You would think in our advanced society our government would work for the good of ALL Americans.
    Unfortunately it does not. This is not due to republicans or democrats. It is due to each and every one of us. The constitution is no longer up held by either side. Lawyers interpret the letter of law, and not the intent or over all purpose of what was written. We live in a world where our laws are no longer decided on by the people. They are decided on by a group of judges, where on most occasions, one vote determines law.

    I honestly hold very little hope for us in the near future. A republican win will only mean the power struggle will continue, and less will be accomplished by us as a nation. A win for the democrats in this election looks like it will send this country back to the years of Carter, and for those who can remember, they weren’t good times.

  21. fraincey says:

    and if you inherit your parents house? expect obama to slam you for 100’s of thousands…after you’re done paying for funeral services, etc….

    have any of you democrat morons thought of this? do you care?

  22. Anonymous says:

    Regarding estate tax policy of Obama, you need to first read the tax code. You are exempt from at least $600,000 which includes real estate. Also, the inheritance tax he is talking about is for the very very wealthy with multi-million dollar assets. If your parents are still living, have them see a good tax attorney and put the house into a Family Limited Partnership divided into shares between all of the beneficiaries if the house is worth more than $600,000. There are ways to get around this that have nothing to do with what you might think are Obama tax policies. Federal law is on your side now and you can make the right arrangements now if you have major assets. Anything in an estate is exempt from federal tax up to $600,000 and it might be higher now. They were talking a couple of years ago about $1M and making a lot of exceptions for family owned businesses so they can be passed down. I worked for tax attorneys who do this all day.

  23. get real says:

    this is a silly comparison. rich people pay more taxes so of course their refund under mccain’s plan yields a big absoulte dollar amount… you can’t refund someone who is making $16K per year $200K in taxes. DUH. we should have a straight flat tax anyways… everyone pays the same percentage. why should i pay more taxes (as a percentage of income) because i studied in school, got good grades, paid for and went to college, and saved/invested my money and sacrificied before retirement.

  24. for the best says:

    To “get real”: Income taxes are meant to be progressive (that would be the actual vocabulary word to describe what you are complaining about). Your incredibly idiotic proposal for everyone to pay the same percentage of income tax (and referring to that as a “flat tax”, which it is not) shows us you’ve no idea what you’re talking about. That aside, to answer your question as to why “you” should pay more taxes for making more money is simple: because you can. Life is more expensive for people who make less money and less expensive for those who make more. Progressive taxes aim to redistribute wealth because it’s best for the economy as a whole. If you look at Europe, you’ll see nation after nation that charges much higher income taxes than the U.S. but provides far superior social services such as universal health care and even higher education. And they have a cap on how much CEOs can make compared to their employees as a percentage. Now, I don’t know if you’ve noticed, but Europe sure has come back strong economically in the 60+ years since WWII. The Euro is incredibly strong against the dollar. While Europe is keeping its gap between rich and poor narrower, we’re letting our human resources and infrastructure rot. If we don’t start taking care of public schools and health care for all Americans, it’s only a matter of time before face the next depression. We’re in the same boat, folks.

  25. Tiara says:

    I think McCain is such a butt hole what about the poor people they are people to they need food and clothes too. all yahh rich folks only care bout yourselves and not others. and god want everybody to give to the people who need it the most.

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