The Tax Foundation

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

 

Attached Files