TaxVox: Individual Taxes

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The voices of Tax Policy Center's researchers and staff

Campaigns, Proposals, and Reforms

Looting Your 401(k) To Fix the Economy

October 16, 2008 –
Talk about a bad idea. Barack Obama and John McCain both want to give people tax incentives to empty their retirement savings accounts. They’d help contribute to a disastrous old age for many middle-class seniors, even as they provide a windfall to wealthy savers. In the name of relieving financial hardship caused by the economic slowdown, Obama would allow penalty-free withdrawals from 401(k)s, IRAs, and the like of up to $10,000 for the next two years. McCain’s plan, which is even worse, would cut the tax rate to 10 percent on up to $50,000 of withdrawals in both 2008 and 2009. Workers contribute pre-tax money into these accounts and, currently, withdrawals are taxed at rates up to 35 percent.
Campaigns, Proposals, and Reforms

The McCain and Obama Stimulus Plans: An Update

October 14, 2008 –
TPC's Katherine Lim has crunched some numbers on John McCain's proposal to temporarily cut capital gains tax rates from 15 percent 7.5 percent. In 2009, under a plan that lowers taxes on both gains and dividends, those making $1 million or more would get two-thirds of the benefit, and an average tax cut of more than $72,000. Those making less than $50,000 would get, on average, nothing.
Campaigns, Proposals, and Reforms

McCain and Obama Stimulus Plans: The Good, Bad, and Ugly

October 14, 2008 –
Both Barack Obama and John McCain have rolled out new economic stimulus plans. Each is a hodgepodge of some good ideas, some not-so-good, and some potentially awful. Obama says his new ideas would cost $60 billion. McCain says his would cost about $52 billion. Here is a quick look at what they have in mind: The centerpiece of Obama’s proposal is a new refundable tax credit for companies that add domestic jobs. Businesses would get $3000 for every net new full-time worker they hire. Any business would be eligible, even those that pay no taxes.
Individual Taxes

How McCain’s Health Reforms Would Raise Marginal Tax Rates

October 9, 2008 –
A recent TPC
Individual Taxes

McCain’s Mortgage Refi Plan: Half a Good Idea

October 8, 2008 –
The most interesting thing I heard in last night's debate between John McCain and Barack Obama (in fact, the only interesting thing I heard) was McCain's call for a new federal effort to directly refinance residential mortgages into new low-interest loans. The plan got me thinking about a provocative way to pay for it—eliminate the mortgage interest deduction for these new loans.
Campaigns, Proposals, and Reforms

Tax Cuts Coming? Investors Don’t Think So

October 7, 2008 –
With Barack Obama and John McCain arguing about who is going to cut taxes more, I though it would be interesting to find out what investors think is going to happen to their tax bills in the coming years. So, in a totally unscientific survey, I asked four money managers what their clients think. The results were striking: Every one said their clients overwhelmingly believed their taxes would rise in the coming four years, no matter who is president. As you watch tonight's debate, keep in mind both candidates are desparately pitching tax cuts to voters who don't believe either will deliver.
Individual Taxes

The Next Financial Bailout

October 6, 2008 –
My sources at the Federal Reserve and in the financial markets increasingly expect that Washington is going to have to put up hundreds of billions of dollars more to directly recapitalize troubled banks. Such a step would be in addition to the $700 billion authorized by Congress last week and could require new congressional appropriations. It would put even greater pressure on the short-term budget deficit and add to uncertainty over the total cost of cleaning up the financial system mess. It could also require new federal legislation, setting up yet another bruising battle on Capitol Hill.
Individual Taxes

California Dreaming, Take 2

October 3, 2008 –
What’s the solution to the short term credit problems of California? A federal loan, of course. According to a story by Randal Archibold in the New York Times Governor Schwarzenegger sent a letter to Secretary Paulson asking for a $7 billion loan. If it works for AIG, why not states? Though maybe Treasury should demand the Golden Gate Bridge as collateral.
Individual Taxes

Kick the Can or California Dreaming?

October 3, 2008 –
After close to three months of debate, California finally passed its $103.4 billion general fund budget last week. While other outrageous fiscal events trump the state’s fiasco, it is worth noting that no one in California actually thinks the state’s budget problems are solved. Rather, they’ve plastered over a mess that will worsen with economic conditions next year and make it even tougher to balance the budget after that.
Federal Budget and Economy

Brother, Can You Spare a Tax Credit?

October 2, 2008 –
Let it be written: If the Senate-passed financial services bailout bill turns out to save us from the next Great Depression, we will owe a deep debt of gratitude to… chicken poop. If not, we can simply say the entire proposition turned out to be little more than, well, you know.