Here is a quote from page two of the report done by the Tax Policy Center:
Quote:
I. How we did our analysis
One challenge facing anyone who wants to estimate the effects of candidates’ tax plans is that no one—not even inside the campaigns—knows exactly what the proposals are. Stump speeches and campaign white papers are often short on the technical details needed to analyze the proposals fully. In addition, the candidates’ plans are often works in progress that change during the campaign.
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We do know what current tax policy is (Bush Tax Cuts), we know McCain wants to make them permanent, that is a little more specific than Obama's plan. We also generally know that Obama's plans involve carving out specific groups for tax cuts, deductions or credits. McCain's plans are broader in nature. So, if you are lucky enough to be in one of Obama's targeted categories you may benefit (and I would not assume anyone can make the call if they are in one of his categories), otherwise you would benefit under McCain's plan. Basically, there is no "reality" at this point.
Also found in the report was this quote supporting some points I have been making about "rich" people having options the rest don't have regarding tax planning.
Quote:
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Although evidence is mixed on how much high-income taxpayers react to increases in their tax rates, most research has found only relatively small permanent reductions in income, but that taxpayers with the highest incomes respond more to tax changes than those with lower income and they have more ability to shift income to avoid temporarily high tax rates.
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In addition the report comments on disincentives to work under some of Obama's tax proposals, again support a point I made about marginal tax rates.
Quote:
Many of Senator Obama’s proposals would reduce taxes or increase refundable credits for low-income households. In general, such provisions make the tax system more progressive by shifting resources toward poorer workers and families. Because most of them would also affect after-tax wage rates or the net cost of working, saving, and attending school, they could have marked effects on work patterns and other behavior, although both the size of any changes and their net effect across the whole population are highly uncertain.
The Making Work Pay credit is intended to offset some of the regressivity of the Social Security payroll tax and encourage low-income people to work, but it does so at a substantial revenue cost—$728 billion over 10 years. Because most workers earn more than $8,100 annually, most of the revenue loss would go to taxpayers who receive no incentive to work more. A credit that was targeted more toward low-income workers would provide a more cost-effective work incentive. And because the phaseout of the credit increases marginal tax rates for those workers in the phaseout range, it might actually give those workers an incentive to work less. On efficiency grounds, the money would probably be better spent reducing marginal tax rates overall or reducing the deficit.
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And
Quote:
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The proposal to exempt seniors earning under $50,000 from income tax is poorly designed according to its current description and creates inequity between older and younger taxpayers with the same income. As we understand it, the proposal contains a “cliff:” filers with income just below $50,000 would owe no income tax, but those with income just above that level could owe substantial tax. This would create substantial disincentives for seniors near the income threshold to work or otherwise earn income. Phasing out the benefit over a range of income would correct this flaw but would extend the benefit of the exemption to taxpayers at higher income levels and thus raise the revenue costs (assuming no behavioral response to the “cliff”). And phasing out the benefit only reduces work disincentives since the phaseout itself increases effective marginal tax rates on affected taxpayers and could therefore reduce their willingness to earn more income.
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Looking at these components of the analysis suggests that "rich" people may avoid increased taxation and that middle class and poor will be given disincentives to work. Thsi sounds like a recipe for economic disaster.