Thoughts On the New Obama-Biden Tax Calculator
October 15, 2008
Yesterday the Obama-Biden campaign introduced the “Obama-Biden Tax Calculator” on the campaign’s website. The calculator allows you to input your income, filing status, and number of dependents, and asks you if any of your income goes towards things like child care and retirement savings. The calculator then tallies your “tax savings” under both Obama’s and McCain’s tax plans and compares the two. Unfortunately, the calculator does not break down the resulting tax cuts to show which parts of the candidates’ tax plans are providing the cut, so it is impossible to tell exactly how it arrived at its number. However, an FAQ is provided, and after reading it a couple of problems become immediately obvious.
First, the “Obama-Biden Tax Calculator” is really a tax cut calculator, because it does not include any of the tax increases in Obama’s plan. Instead, the calculator determines if you would receive a tax cut, and if so it estimates that tax cut. The tax increases that are ignored would hit mostly higher income taxpayers (over $250,000 for joint returns, $200,000 for singles).
The big problem with the calculator is the omission of Obama’s and McCain’s health care plans. According to the FAQ, “The calculator focuses on the candidates’ tax plans, not their health care plans.” But McCain’s health care plan is part of his tax plan. As we have pointed out before, the McCain health care plan, which includes taxing health benefits and providing an offsetting refundable credit ($5000 for families, $2500 for singles), is a tax cut for most taxpayers. Obama’s health care plan would also include some refundable credits, but if both candidates’ health plans were included, it would show that middle-income tax units (as a group) would see a larger income tax cut from McCain than from Obama. This comes from Tax Policy Center.
The FAQ states that the goal of the calculator is “to make it easy for you to get an accurate sense of what would happen to your taxes under Obama and McCain.” But without including the above tax plans, the Obama-Biden Tax Calculator becomes misleading and does not provide a completely accurate picture of what would happen to most filer’s taxes.