What's Missing from the Presidential Candidates' Tax Plans?
As we enter fall and approach the end of September, the presidential election is just a few short weeks away.
And though a number of social issues remain unresolved, one of the biggest factors playing into the rankings at the polls is the economy – specifically how the plans for the economy will affect the individual and American households.
That means candidates are honing in on highlighting their tax plans... or they should be, at least.
At first glance, it may appear as though each candidate has laid out his intentions for his tax plans, and each is very different. But actually, the two candidates are very similar on one big thing: they're not clear at all.
Let's take a look at what each candidate has in mind for the next four years.
One of the major problems with the tax code is the extensive numbers of loopholes and exemptions, things that end up costing the Treasury $700 billion a year.
President Barack Obama intends to raise tax rates on the “wealthiest households” – those making over $250,000.
He will allow George W. Bush's tax cuts to expire for those households, putting rates at 39.6%.
His “Buffett Rule,” meanwhile, will put the tax rate for those earning over $1 million each year at no less than 30%.
And he will also “crack down” on tax breaks for oil companies and carried interest exemptions for asset traders.
But none of these changes will help clean up the tax code. And none of these changes have been clearly explained.
Obama has insisted he will raise these tax rates, but he never mentioned how.
Mitt Romney, meanwhile, will not raise taxes for the “middle class of America.”
His tax plan involves more reforms to the actual tax code than President Obama's, and yet his plan is equally unclear.
Romney will cut all income tax rates by 20%, and further reduce taxes on capital gains, dividends, and interest for those earning below $200,000 annually.
Corporation taxes will fall to 25% from 35%.
He will cut out the loopholes that cost the Treasury so much in order to compensate for these sweeping tax cuts.
But he has yet to say which loopholes he will cut or how. And a number of the loopholes that could be cut currently benefit the middle class.
The video below from the Economist explains the problem of these vague tax plans in more detail.
It seems as though both candidates are waiting until the election is over to get down to the nitty gritty details of their plans. And by then, what will the voters have to gain?
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