August 25, 2008
Tax Foundation Analyst Mark Robyn Calls for More Details for Obama?s Tax Relief Plan for Seniors on The Hill?s Congress Blog
"Obama Tax Relief Proposal Needs More Details"
By Mark Robyn
Barack Obama's no-tax pitch for some seniors was one of those too-simple proposals. We found that as soon as a senior crossed the $50,000 threshold, his entire income would be taxed at 15%. In this way, the policy acts as a "cliff," as you can see in the figure below, suddenly slamming the taxpayer with a substantial tax bill. A person earning $51,000 would actually make less after taxes than someone who earned $49,000 ...
Well, after Foon Rhee of the Boston Globe blogged about it last Friday afternoon, Jason Furman, economic adviser to the Obama campaign, replied by saying that his plan actually includes a $2 billion a phase-out of the tax break, which would be designed later, so that the tax bill would rise gradually above $50,000 in income and there would be no "cliff." ...
Over here at the Tax Foundation, our job is not to come up with the best one-liner that can maximize votes; our job is to vet and take a critical look at any tax proposal that comes our way. All candidates, Republican and Democrat, presidential to congressional, are guilty of making policy proposals so simplistic that that they really don't mean anything. The campaign is getting too old for that—the public needs some details in these next two months.
