An AP story posted yesterday analyzes one component of Sen. Obama's taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. plan, which is to exempt all seniors who make less than $50,000 from having to pay federal income tax. The theme of the article is that tax policy experts agree it is bad tax policy. It's a gimmick, just like Sen. Obama (correctly) labeled John McCain's gas taxA gas tax is commonly used to describe the variety of taxes levied on gasoline at both the federal and state levels, to provide funds for highway repair and maintenance, as well as for other government infrastructure projects. These taxes are levied in a few ways, including per-gallon excise taxes, excise taxes imposed on wholesalers, and general sales taxes that apply to the purchase of gasoline. holiday.
The article also explains how there would likely have to be an exemption of $50,000 with a phase-out, as opposed to a cliff at $50,000. This would undoubtedly lead to the provision having to cost more than has been estimated by the Tax Policy Center because TPC's estimates assumed the cliff.
Given Obama's support for this provision, the new DNC platform has reportedly adopted this as one of its planks (early drafts report). Speaking of which, much of the DNC platform regarding tax policy uses rhetoric that sounds nice (like the exemption for seniors), but if you think about any of them for more than 10 seconds, you end up asking yourself, "What does that even mean?," and probably concluding that it is pure nonsense. (And don't worry, I'm pretty sure you'll find similar meaningless language in the Republican platform on both fiscal and non-fiscal issues when the new platform is released in a few weeks.)
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