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Presidential Candidate Tax Plan Comparison

Oct. 27, 2008 (SmartPros) With the 2008 presidential election just over a week away, it's important to be informed and SmartPros has gathered some resources to help you get up to speed on the candidates' tax plans.

Barack Obama
John McCain
New Tax Cuts Refundable "Making Work Pay Credit" of 6.2 percent of earnings up to a maximum earnings of $8,100 per worker

Refundable "Universal Mortgage Credit" of 10 percent of mortgage interest for nonitemizers up to $800

Eliminate income tax for seniors making less than $50,000 per year

Make Research and Development and renewable energy production tax credit (wind, solar) permanent

Extend childless Earned Income Tax Credit (EITC) phasein range and increase phaseout threshold; increase EITC phase-in rate to 45 percent for families with three or more children; increase add-on to EITC phase-out threshold for married filers to $5,000

Make Child and Dependent Care Tax Credit refundable and equal to 50 percent of child care expenses less than $6,000

Make saver's credit refundable and change to a 50 percent match of the first $1,000 of contributions

Rename the Hope Credit the "American Opportunity Tax Credit" and expand it to a refundable credit of 100% of the first $4,000 of college expenses

Provide a refundable $3,000 per employee credit for increases in employment for firms with growing employment

Eliminate the taxation of unemployment insurance

Allow first-year deduction of 3 and 5-year equipment, deny interest deduction (expires after 2013)

Reduce maximum corporate income tax rate from 35 percent to 25 percent (phased in by 2015)

Increase the dependent exemption by two-thirds (phased in by 2016)

Convert Research and Development credit to 10 percent of wages incurred for Research and Development, make permanent

Tax the first $50,000 of withdrawls from IRAs and 401ks at 10 percent in 2008

Exempt unemployment insurance benefits from tax in 2008 and 2009 for those making less than $100,000

Capital Gains Increase maximum capital gains rate to 20 percent for those earning more than $200,000 ($250,000 for married couples)

Require information reporting of basis for gains

Make permanent current rates on capital gains and dividends, (0 and 15 percent)

Increase the amount of capital gains that can be deducted against ordinary income to $15,000 in 2008 and 2009

Reduce the tax rate on long-term capital gains to 7.5 percent in 2009 and 2010

2001/2003 Tax Cuts Permanently extend child credit expansions, 10, 15, 25, and 28 percent rates, and changes to tax implications of marriage

Restore 36 and 39.6 percent statutory income tax rates in 2009

Restore phaseouts of personal exemptions and itemized deducations (PEP and Pease) for households making more than $200,000 ($250,000 for married couples), increase the PEP and Pease threshold

Make permanent all provisions other than the estate tax repeal
Alternative Minimum Tax Extend and index 2007 AMT patch Extend and index 2007 AMT patch, further increase exemption by additional 5 percent per year after 2013 (temporarily)
Estate Tax Make permanent estate tax with $3.5 million exemption and 45 percent rate Make permanent estate tax with $5 million exemption and 15 percent rate
Simplification Provide taxpayers with simple returns the option of pre -filled tax forms to verify, sign, return to IRS Create optional alternative tax with two rates and larger standard deduction and personal exemption
Revenue Raisers and Tax Havens Eliminate oil and gas loopholes

Close loopholes in the corporate tax deductibility of CEO pay

Tax carried interest as ordinary income

Reallocate multinational tax deductions

Impose a windfall profits tax on oil and gas companies

Require publicly traded financial partnerships to pay corporate income tax

Codify economic substance doctrine (requires transactions that qualify for tax benefits have economic justification beyond those benefits)

Create an international tax haven watch list of countries who do not share information with the U.S. and require greater financial disclosure to decrease tax shelters

Repeal domestic production activities deduction

Eliminate oil and gas loopholes

Unspecified corporate base broadeners

Health Income-related federal tax subsidies for health insurance purchased through new health insurance exchange

Require employers to provide insurance or pay a percentage of payroll to support the national plan

Small business healthcare tax credit of 50 percent of employer paid premiums

Replace exclusion from income for employer sponsored health insurance with refundable credit of $2,500 for individuals and $5,000 for families who purchase qualifying health insurance
Other Social Security/payroll taxes: impose additional tax of 2-4 percent (combined employer and employee) on workers with income above $200,000 ($250,000 for married couples)

Allow penalty-free withdrawls of up to 15 percent from retirement accounts

Mandate automatic 401(k)s and automatic IRAs

Ban internet and cell phone taxes

Suspend rules that require distributions from IRAs at age 70.5

Matrix used with permission of the Urban-Brookings Tax Policy Center. Detailed analysis available as a free PDF download. Data provided prior to Emergency Economic Stabilization Act of 2008. 

U.S. Chamber of Commerce

The U.S. Chamber of Commerce has a wealth of information at The Chamber's VoteforBusiness project is not only focused on pro-business initiatives related to the presidential campaigns, but also at stake this election is the entire U.S. House of Representatives, 35 U.S. Senate seats, 11 governorships, 75 percent of the nation's state legislative seats, and over 300 ballot measures in 23 states.

The U.S. Chamber's 2008 Election Center allows you to register to vote, learn about voting early or by absentee ballot, and see how candidates voted. In addition, you can sign up to have customized content-in-depth candidate profiles, detailed race reports, current polling information, ballot measure updates, and political multimedia-delivered directly to them via e-mail.


CCH detailed the presidential candidates' tax policies in this free PDF report.

"Newly elected presidents have a good track record for getting major tax legislation passed their first year in office," said Mark Luscombe, JD, CPA and CCH principal federal tax analyst. "Therefore, although many details of the candidates' proposals are unclear, tax practitioners are anxious to learn as much as they can about their positions -- and perhaps take advantage of planning opportunities between the election and the end of the tax year."

Tax Foundation

The Tax Foundation has launched an interactive chart that allows you to select the presidential candidates from which to compare their tax policies. The list not only includes Senators Obama and McCain, but also Bob Barr, Libertarian Party; Chuck Baldwin, Constitution Party; Cynthia McKinney, Green Party; and Ralph Nader, Independent. 

If you have resources to add to this page, please email

2008 SmartPros. All Rights Reserved.

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