September 6, 2012

Table: Obama, Romney, and Bowles-Simpson Tax Plans

Comparison of Tax and Budget Plans

Obama

Romney

Simpson-Bowles

Top Marginal Rate on Personal Income

39.60%

28%

23%-28%

Top Marginal Rate on Long Term Capital Gains

30%*

15%

23%-28%

Top Marginal Rate on Dividends

43.4%**

15%

23%-28%

Top Marginal Rate on Corporate Income

28%

25%

26%-28%

Top Marginal Rate on Corporate Income from Foreign Sources

28%

0%

0%

Tax Expenditures (Some 250 credits, deductions, and other preferences amounting to more than $1 trillion a year)

Adds more than are taken away and complicates many existing ones, though limits benefits for high-income earners

Potentially eliminates all, except middle-class preferences for mortgage, health, retirement, and charity

Eliminates all under the 23% top rate plan; Eliminates all but Child Credit, EITC, mortgage, health, and retirement benefits under the 28% top rate plan

Alternative Minimum Tax, PEP and Pease (Limitations on high-income tax benefits)

Maintains PEP and Pease; replaces AMT with a "Buffett Rule" minimum tax of 30%

Eliminates

Eliminates

Payroll Tax

Increases the top rate from 2.9% to 3.8%

Maintains

Increases the wage base 2% each year until 2050

Other Taxes Contained in Patient Protection and Affordable Care Act ("Obamacare")

Maintains

Eliminates

Maintains

Estate Tax

Maintains

Eliminates

Maintains

Gas Tax

18¢ per gallon

18¢ per gallon

23¢ per gallon

Tax Revenue as a Share of GDP in 2015

19.40%

18.00%

19.30%

Spending as a Share of GDP in 2015

22.40%

20.00%

21.40%

Deficit as a Share of GDP in 2015

3.10%

2.00%

2.10%

Publicly Held Debt as a Share of GDP in 2015

79.40%

Not Scored

69.00%

Balanced Budget

Never

2020

2037

* Based on the "Buffett Rule" minimum tax of 30%.

** Includes the 3.8% investment tax under the Affordable Care Act.

Sources: Candidate statements, CBO

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A 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.

A 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.

Tax expenditures are a departure from the “normal” tax code that lower the tax burden of individuals or businesses, through an exemption, deduction, credit, or preferential rate. Expenditures can result in significant revenue losses to the government and include provisions such as the earned income tax credit, child tax credit, deduction for employer health-care contributions, and tax-advantaged savings plans.

A payroll tax is a tax paid on the wages and salaries of employees to finance social insurance programs like Social Security, Medicare, and unemployment insurance. Payroll taxes are social insurance taxes that comprise 24.8 percent of combined federal, state, and local government revenue, the second largest source of that combined tax revenue.

An estate tax is imposed on the net value of an individual’s taxable estate, after any exclusions or credits, at the time of death. The tax is paid by the estate itself before assets are distributed to heirs.