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An Updated Analysis of the 2008 Presidential Candidates' Tax Plans: Executive SummaryThe nonpartisan Urban Institute publishes studies, reports, and books on timely topics worthy of public consideration. The views expressed are those of the authors and should not be attributed to the Urban Institute, its trustees, or its funders. The text below is an excerpt from the complete document. Read the full report in PDF format. An Updated Analysis is availableAbstractBoth John McCain and Barack Obama have proposed tax plans that would substantially increase the national debt over the next ten years, according to an updated analysis by the non-partisan Tax Policy Center. Compared to current law, TPC estimates the Obama plan would cut taxes by $2.8 trillion from 2009-2018. McCain would reduce taxes by nearly $4.2 trillion. Under current law, the 2001 and 2003 tax cuts would expire in 2010 and the Alternative Minimum Tax would remain in full force. IntroductionBoth John McCain and Barack Obama have proposed tax plans that would substantially increase the national debt over the next ten years, according to an updated analysis by the non-partisan Tax Policy Center. Neither candidate’s plan would significantly increase economic growth unless offset by spending cuts or tax increases that the campaigns have not specified. Compared to current law, TPC estimates the Obama plan would cut taxes by $2.8 trillion from 2009-2018. McCain would reduce taxes by nearly $4.2 trillion. Under current law, the 2001 and 2003 tax cuts would expire in 2010 and the Alternative Minimum Tax would remain in full force. Both candidates prefer to compare their plans to the “current policy” baseline, which would extend the 2001 and 2003 tax cuts and indefinitely extend an indexed AMT “patch.” Against that baseline, Obama would raise revenues by about $800 billion over the decade, while McCain would lose $600 billion. But choice of baseline doesn’t change how the proposals would affect the budget picture; without substantial cuts in government spending, both plans would sharply increase the national debt. Including interest costs, Obama would boost the debt by $3.4 trillion by 2018. McCain would increase the debt by $5 trillion. (End of excerpt. The entire report is available in PDF format.) |
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