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Tax Plans Compared

McCain appeared on CNN's American Morning this morning (16 Sep) and again misrepresented his opponent's tax plan as a plan to "raise taxes."

Kiran Chetry reminded the senator that "the non-partisan Tax Policy Center [has] calculated the middle class would actually save significantly more under Barack Obama's tax plan than yours." Then she asked him: "How will your tax cuts, as it breaks down on income level, benefit the working class and the middle class?"

The honest answer would have been to say they won't.

But McCain responded that "Senator Obama wants to raise taxes."

Then he clumsily changed the subject to his health care plan, which, he said, is in effect, really a tax cut.

He said, "I'm not going to raise anybody's taxes and the fact is, that with my health care plan where people receive a $5,000 refundable tax credit, that will have a huge impact."

As it happens, this was also the day that a study published in the journal Health Affairs concluded that his health care plan would actually increase the number of uninsured Americans over the long term.

"After a short-term reduction of 1 million in the number of people without coverage, the number of uninsured would increase by 5 million after five years, the authors predict," according to a summary of the article found at The Caucus.

So, it's a good thing that his "health care" plan is really more of a "tax cut" plan, because a health care plan that actually increases the number of uninsured would really suck.

There's only one problem with this as a tax cut plan, however: To take advantage of it, you have to be able to afford health insurance. And that's kind of a weak spot with anything McCain offers in the way of tax cuts. You have to be making pretty good money to afford them

Getting back to the question the Senator was actually asked: "How will your tax cuts, as it breaks down on income level, benefit the working class and the middle class?"

Three graphic comparisons of the two tax plans are available at today's New York Times Freakonomics site. One graphic, from the Washington Post, illustrates what salary ranges get the largest percentage change in taxes: from McCain's plan, those earning $2.87 million and above; from Obama's, those earning less than $19,000.

Another, from chartjunk, shows how the tax breaks spread across number of people by income and the third illustrates the shift in tax burden by income. All three charts tell different, but compelling stories; and all three still manage to honestly represent the tax plans of each candidate.

But the really really short version: You have to have an income in excess of  $226,982 a year or higher to not get a tax cut under the Obama plan. You have to earn more than $603,403 a year to get a tax increase under the Obama plan. You have to earn more than $66,355 a year to get a tax cut of more than one percent under the McCain plan.

Do the math.