April 29, 2008
Summary of the Presidential Candidates’ Tax Plans
| Summary of the Presidential Candidates' Tax Plans | |||
|
| Clinton | McCain | Obama |
| Taxation of Households | |||
| Income Tax Rates | • Rollback lower wage tax rates for those with incomes above $250,000 • Raise tax on dividends and capital gains from 15% to 20% | • Permanently extend lower tax rates (wages, dividends and capital gains). | • Rollback lower wage tax rates for those with incomes above $250,000 • Raise tax on dividends and capital gains from 15% to 28% |
| Alternative Minimum Tax | • Reform | • Permanent repeal | • Reform |
| Families and Children | • Permanently extend the "middle class" provisions of the '01/'03 tax relief, specifically the child tax credit and marriage penalty relief • Raise the child tax credit even further • Expand the EITC and the Child and Dependent Care Tax Credit | • Raise dependent exemption from $3,500 to $7,000 | • "Making Work Pay" tax credit ($1,000 for families/$500 for individuals) to offset payroll taxes (refundable) • Expand and enhance Child and Dependent Care Tax Credit by making it refundable and increasing the credit rate to 50% • Expand the EITC |
| Housing | • No specific tax proposal | • No specific tax proposal | • A new 10% Universal Home Mortgage Credit for taxpayers who do not itemize (refundable) |
| Savings | • New American Retirement Accounts: individual contributions up to $5,000 with government matching the first $1,000 contributed (100% match for couples with incomes below $60,000 and 50% match for incomes up to $100,000) | • No specific tax proposal | • Expand Low Income Savers Credit—50% match for first $1,000 saved for families with up to $75,000 in income (refundable) |
| Job training and education | • College tax credit of $3,500 (partially refundable) | • Tax-free training accounts for education and also health care | • New American Opportunity Tax Credit -- credit for the first $4,000 of college education expenses (refundable) |
| Overall Reform | • No specific plan | • Allow taxpayers to pay tax under a simple alternative tax with two tax rates, broad tax base, and a large standard deduction | • Simplify tax filings so that most Americans can fill our their returns quickly—moves towards a return-free tax system for many taxpayers |
Estate Taxation | |||
| Estate Tax | • Reform with $7 million exemption | • Reform with $10 million exemption and 15% rate | • Not specified |
Taxation of Businesses | |||
| Corporate tax rate | • No change | • Lower top corporate tax rate from 35% to 25% | • No change |
| Investment | • No change | • Full expensing for investment in equipment | • Eliminate capital gains taxes for start-up businesses |
| Small business expensing | • No change | • Permanently extend expansion of Sec. 179 expensing | • No change |
| Research and Development (R&D) | • Reform and permanently extend the R&D tax credit (incremental increase from 20% to 50%; ARC increased form 12% to 20%) | • Permanent tax credit equal to 10 percent of wages spent on R&D | • Permanently extend the R&D tax credit |
| Energy Taxes | • No change • Windfall Profits Tax on oil selling above a threshold • Holiday for federal excise tax on gasoline (18.4 cents) and diesel (24.4 cents) during the summer months | • Holiday for federal excise tax on gasoline (18.4 cents) and diesel (24.4 cents) from Memorial Day to Labor Day | • Extend production tax credit to renewables • Windfall Profits Tax on oil selling above a threshold |