June 17, 2008
Barack Obama’s tax plan will either raise $262 billion over the next 10 years or increase the national debt by $2.7 trillion. John McCain would add either $615 billion or $3.6 trillion to the debt. What’s going on? Don’t everyone turn your computer off at once, but we need to talk about budget baselines.
June 17, 2008
We have updated our preliminary estimates of the revenue effects of the candidates’ tax plans. Our estimate for the ten-year revenue change compared with current law from Senator Obama’s plan is identical to that in our original study—a $2.7 trillion revenue loss. Our updated projection for Senator McCain’s plan shows a revenue loss of $3.6 trillion instead of $3.7 trillion. With interest costs, Obama would add $3.3 trillion to the national debt, while McCain would increase the debt by $4.3 trillion.
June 15, 2008
We've heard from the Obama campaign about our blog post on Senator Obama's Social Security tax increase on people earning more than $250,000. The campaign clarified that the threshold would be $250,000, but Senator Obama has not specified what the rate would be, when it would take effect, whether it would apply to employers, employees, or both, or what the tax base would be.
June 13, 2008
In preparing our analysis of the candidates’ tax plans, we sent descriptions to each campaign for comment/clarification/correction. Senator Obama’s staff asked us not to include his reported support for a Social Security tax on earnings above $200,000 or $250,000, saying that there was no specific proposal. So we left the Social Security proposal out of our core analysis. We also left out Senator McCain’s proposal for an optional alternative tax system on similar grounds. We did discuss these non-proposals in two sidebars in our analysis.
June 12, 2008
Barack Obama looks at the U.S. economy and worries about recession—which he would cure with a $50 billion stimulus bill. Increasingly, Fed Chairman Ben Bernanke looks at the same economy and sees inflation—which he would treat by raising interest rates.
June 11, 2008
In the first detailed analysis of the Barack Obama and John McCain tax plans, the Tax Policy Center has run their proposals through the Big Computer and discovered that their schemes are, well, painfully predictable. Each would raise the national debt by trillions of dollars. Obama would use the money to provide modest tax cuts to low- and moderate-income people while imposing stiff tax hikes on the very wealthy. McCain would cut taxes a bit for the working-class and a lot for the rich.
June 10, 2008
I've just finished two terrific new books: High Wire: The Precarious Financial Lives of American Families by long-time LA Times reporter Peter Gosselin, and Hospital by Julie Salamon. In quite different ways, each illuminates some of the critical social policy issues of our time.
June 5, 2008
As 401(k) plans and other defined contribution savings vehicles have become more popular in recent years, retirement experts have become increasingly worried about how workers can make these funds literally last a lifetime. Too often, retirees withdraw the money too quickly and end up outliving their savings or, worse, take the whole pot of cash and go off to buy that bass boat they’ve always wanted.
June 3, 2008
Interesting confluence of events: Barack Obama is about to wrap up the Democratic Presidential nomination and the Senate has begun debating a major plan to cap carbon emissions—an idea Obama strongly supports.
May 29, 2008
It is a nice object lesson in how a couple of obscure changes in the tax law can save a few people a lot of money. The IRS has reported that the number of those earning $200,000 or more who paid no taxes rose sharply in 2005. More than 7,300 of these worthies avoided U.S. income tax entirely, two-and-a-half times the year before. About 85,000 paid worldwide taxes of less than 10% of their income.