The
KDDK Advantage - October/November 2008
The
Presidential Candidates’ Positions
On Key Tax Issues
The following summarizes
some of our presidential candidates’ views on key tax
issues. This information was gleaned from the web site
of The Tax Foundation in Washington D.C., statements the
candidates have made, and other sources available to the
public. It is only a partial overview of the statements
and proposals senators McCain and Obama have set forth
during the presidential campaign.
Due to the nature of political
campaigns and the nation’s current economic and political
climate, the candidates’ views on some tax issues may
have changed since this article went to press.
Senator Obama
proposes keeping the Social Security tax at 12.4% (the
current rate) for earned income from zero to $102,000;
0% for earned income from $102,000 to $250,000; and 4%
for earned income totaling $250,000 or more.
Senator McCain
opposes increasing the Social Security payroll tax from
the
current 12.4% on wages up to $102,000. He supports supplementing
the current Social Security system with personal accounts.
Senator McCain
proposes that the lower rates enacted in the 2001-03 tax
cuts be maintained.
Senator Obama
suggests the nation should maintain the current 10, 15,
25 and 28 percent rates from the 2001-03 tax cuts, but
increase the top two rates from 33% to 36% and from 35%
to 39.6%, respectively.
Senator Obama
proposes increasing the maximum capital gains rate to
between 20% and 28%.
Senator McCain
proposes keeping the current 15% rate on capital gains
and dividends.
Senator McCain
proposes phasing out the AMT.
Senator Obama
proposes extending the AMT “patch,” which is meant to
limit the number of additional taxpayers that would be
subject to the AMT.
Some of Obama’s
proposals:
Eliminate income tax for seniors
making less than $50,000 per year. Give a Small Business and Micro-enterprise
Initiative Credit of up to 20% on up to $50,000 of investment
in small owner-operated businesses. A refundable Universal Mortgage Credit
of 10% of mortgage interest for taxpayers that do not
itemize their deduction, capped at $800. A refundable “Making Work Pay” tax
credit of 6.2% of earnings up to a maximum of $8,100.
Some of McCain’s
proposals:
Allow equipment that is depreciated
three to five years to be deducted in the first year
of purchase. A refundable health care tax credit
($5,000 for family coverage, $2,500 for individual coverage)
to replace the current exclusion for employer-based
health insurance premiums. Reduce the maximum corporate tax rate
from 35% to 25%. Increase the dependent exemption each
year until it reaches $7,000 in 2016.
Business attorney
Mark Samila’s practice areas include tax, commercial,
bankruptcy and employee benefits law. He holds a Certified
Public Accounting Certificate and has provided tax and
management consulting to privately-owned businesses for
the international firm of Ernst & Young. Mark can
be contacted at 812-423-3183 or msamila@kddk.com.
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