NYT and WaPo on McCain Economics and Holtz-Eakin’s Role
April 23, 2008
The New York Times and Washington Post had two articles today discussing McCain’s economic policies and his economic staff. First, David Leonhardt wrote a column in the New York Times that focused mostly on McCain’s advisor Douglas Holtz-Eakin, former director of the Congressional Budget Office, who is widely respected in tax policy circles in Washington.
Another McCain article, this one in the Washington Post by Ruth Marcus, looks at “McCainonomics.” Marcus mostly criticizes McCain’s current positions on tax policy, arguing that they are irresponsible.
One correction is necessary in Marcus’s article regarding AMT where she writes: “In fact, getting rid of the AMT — as opposed to patching it to make sure it does not catch increasing numbers of taxpayers — would primarily benefit those with annual incomes of $500,000 or more.”
That is not really true. While an AMT repeal would hit what most people would call rich (200,000 – 500,000), it doesn’t really hit people above $500,000 due to the fact that the AMT rates are much lower than the ordinary rates of 33 and 35 percent that these taxpayers are hit with. The Joint Committee on Taxation estimates that for tax year 2010 (the peak of AMT for the near horizon), under current law, those making above $500,000 in AGI would only pay $15 billion in AMT out of a total AMT payments (plus lost credits) amount of $119.5 billion. Approximately 56 percent of tax returns with AGI above $500,000 would be hit by AMT. The fact of the matter is that the hardest hit group is between $200,000 and $500,000, which would pay an additional tax of $46.8 billion (98.1 percent of tax returns in that group would pay AMT).
Was this page helpful to you?
The Tax Foundation works hard to provide insightful tax policy analysis. Our work depends on support from members of the public like you. Would you consider contributing to our work?Contribute to the Tax Foundation
Let us know how we can better serve you!
We work hard to make our analysis as useful as possible. Would you consider telling us more about how we can do better?Give Us Feedback