In total, McCain's tax cuts would benefit approximately 60% of all American tax-payers, including the super rich. In the 60-80 percentile (those earning between $37,595 and $66,354), the average tax cut equates to very little. For wager earners, including families with children, in the $18,981 and $37,595 tax bracket, less than half will see any benefit from McCain's tax cuts (but, half will).
Under McCain’s plan the following would benefit:
Families With Children
- Increase in Exemptions: Exemption for each dependent (currently $3,500) would increase to $4,000 in 2010, $4,500 in 2001, and continue increasing by an additional $500 each year until 2016 when the exemption would reach $7,000 per dependent. After 2016, the exemption would be indexed for inflation.
- Benefits for Married Couples Filing Joint Returns: Married couples with an adjusted gross income of $50,000 or less, and who also filed a joint return, would be eligible for the $7,000 exemption immediately. Those without children would not benefit much, and this does not benefit single parents raising children alone.
Alternative Minimum Tax (AMT) Taxpayers
The AMT has created a hardship for many tax payers. McCain would permanently extend the ATM exemption, raise the AMT threshold (therefore fewer tax payers may be subject to the ATM) and index it for inflation, providing some relief to the ATM. He would also allow individuals to claim personal, nonrefundable credits against the ATM.If you consider middle-class as wage earners in the 60-80 percentile, this will not help the "middle-class." According to the Tax Policy Center, “it would primarily benefit more affluent households in the 80th to 95th percentile of income — those earning between $111,645 and $226,918 in 2008 dollars, were McCain’s plan to be fully phased in next year. Still, households with more modest means would not be subjected to the AMT under McCain’s proposal.”
Continuation of Bush Tax Cuts
McCain also proposes to extend President Bush’s 2001 and 2003 tax cuts, currently set to expire at the end of 2010. This would continue, not increase, the following Bush tax plan benefits that already:- Reduced top marginal tax rates on individuals’ incomes;
- Cut the rates on capital gains and dividends;
- Expanded the child tax credit; and
- Reduced taxes on married couples compared to singles.
According to Politfacts.com, “The Tax Policy Center says McCain’s policy proposals collectively would reduce the tax exposure of 60 percent of all American households, though fewer than half of those making between $18,981 and $37,595.”
For the middle 20 percent of taxpayers (earning between $37,595 and $66,354):
- The average tax bill would go down by $325 in 2009 ($1,118 under Obama’s plan); and
- Longer term, in 2012, these 20 percent would see tax cuts of $1,441 under McCain’s plan ($2,197 under Obama’s).
Biden Lied, Sort Of
During the October 2, 2008 vice presidential debate, Sen. Joe Biden stated:
"John [McCain] wants to add $300-million, billion in new tax cuts per year for corporate America and the very wealthy while giving virtually nothing to the middle class. We have a different value set. The middle class is the economic engine. It’s fair. They deserve the tax breaks, not the superwealthy who are doing pretty well. They don’t need any more tax breaks."
While it is true that McCain's plan does favor the wealthy more than Obama's, McCain's plan also has some benefits for the middle-class.
If you compare elephants to mules, Obama's plan appears to have a wider and more significant positive impact on the middle-class, but it would be entirely wrong to say that McCain's plan would only benefit the superwealthy.
Sources:
Politifacts.com. ”McCain’s Plan Doesn’t Ignore the Middle-Class.”. Accessed October 3, 2008.
Checkfacts.org”The Budget According to McCain: Part II.” May 14, 2008.
Len Burman and Greg Leiserson. The Tax Policy Center. “Scoring McCain’s Tax Proposals.” April 17, 2008.
