While over 90 percent of all firms have between 0 and 20 employees, these firms only employ 19.2 percent of all private sector workers. These small firms can be anything from coffee shops to small car dealerships and are...
- Eight Tax Policy Questions for Senators John McCain and B...
Eight Tax Policy Questions for Senators John McCain and Barack Obama
With 39 Days Left in Campaign, Tax Foundation Wants Answers from Presidential Contenders
Washington, DC, September 26, 2008 - In the midst of a financial crisis, and with the economy as the number one issue this election, the Tax Foundation is asking Senators John McCain and Barack Obama to answer eight questions about their tax proposals and their philosophical objectives when it comes to fiscal policy.
Tax Foundation President Scott Hodge urges the Republican and Democratic nominees for the Oval Office to clarify their positions on specific tax issues and the goals they want to achieve through the tax code.
"While our scholars have done comparative studies on the candidates' tax plans as well as analyses of specific items, including McCain's health credit and Obama's senior tax relief proposal," says Hodge, "the Tax Foundation is looking for answers to very important questions that will determine the fiscal future of this country."
The following are the questions to Senators McCain and Obama:
- The Treasury Department and the Congressional Budget Office say that housing receives more tax subsidies than any other industry, thanks to the ever-growing government effort to boost home ownership. Most tax experts say we've got to pull back some of those subsidies so that people only buy a house when they can afford it.
- Senator McCain, your plan doesn't rescind any of housing's tax benefits. Isn't it time to take on the housing industry's claim to tax breaks that subsidize home ownership?
- Senator Obama, your plan actually piles on more tax benefits for housing. Why are the experts wrong?
- A recent OECD study reports that the U.S. corporate tax rate is the second-highest among industrialized countries. Do you believe this affects America's ability to attract capital and to compete economically in the global marketplace? If so, what would you do about it? If not, why not?
- Polls show that most Americans think our income tax system is too complicated and nearly 60% of taxpayers pay someone else to fill out their tax forms. Next year, there will even be a worksheet for the standard deduction. Despite the calls for a major overhaul and simplification of the system, both of you offer tax proposals that further complicate the tax code with more credits and deductions. Why can't you remove some?
- Congress has always eliminated taxes for the poorest. But with new credits, even middle-class filers are joining the ranks of "non-payers." Currently, one-third of tax filers owe nothing in income taxes, and if either of your plans is enacted next year, about 43% of filers would get every dollar back that was withheld from their paychecks. Do you think it is desirable to have nearly half of Americans disconnected from the income tax system?
- Since the early 1990s, lawmakers have increasingly used the tax code, instead of government spending programs, to funnel money to groups of people they want to reward, enacting credits to subsidize families with children, college students, and purchasers of hybrid cars. Do you think it is still a good idea to use the IRS as a vehicle for social policy?
- Tax Foundation economists have described Barack Obama's tax plan as an advancement of redistribution, focusing on dividing the "economic pie", while John McCain's tax plan places more emphasis on "growing the pie."
- To John McCain: Is it the role of taxes to enforce fairness, and if so, how will your plan accomplish that?
- To Barack Obama: How will you make sure that the pie that you want to divide differently can grow overall?
- There have been claims made by both campaigns on each other's tax proposals that have appeared in several advertisements.
- To John McCain: You have attacked Sen. Obama for wanting to tax electricity. Then why do you support doing essentially the same thing with your carbon cap and trade proposal?
- To Barack Obama: Why have you said the McCain tax plan gives no benefits to "100 million households" while the liberal Brookings-Urban Tax Policy Center scores the McCain health tax credit as a big tax cut for the vast majority of households?
- There has been considerable debate during the campaign over what the federal government should do about the higher price of gasoline, but the proposals of both candidates have little economic backing.
- To Barack Obama: Why impose a windfall profits tax on U.S. oil companies when it failed so miserably during the 1980s? Don't private and public pension funds invest in them?
- To John McCain: Why did you support a gas tax holiday when experts have called it a gimmick that would not lower gas prices significantly?
To learn more about Presidential tax proposals, go to http://www.taxfoundation.org/candidates08/.
The Tax Foundation is a nonpartisan, nonprofit organization that has monitored fiscal policy at the federal, state and local levels since 1937.
To schedule an interview to discuss the Presidential candidates' tax plans, please contact Matt Moon, the Tax Foundation's Manager of Media Relations, at (202) 464-5102.
Join the Tax Foundation's fight for sound tax policy Go
Tax Policy Blog
The official weblog of the Tax Foundation.
Tax By State
For information on your state, select it from the drop-down menu.
Ask a Tax Expert
Contact information for Tax Foundation policy staff Ask