J.D. Foster, Ph.D. at The Heritage Foundation has just posted this excellent short analysis
of the tax plans of both candidates.
Senators John McCain (R-AZ) and Barack Obama (D-IL) have released tax plans indicating their priorities when one of them becomes President of the United States. These plans involve significant changes to the federal tax system. While numerous blanks and vagaries remain in both plans, much of their respective plans are now clearly laid out.
As expressions of tax policy design, the two tax plans share the unfortunate attribute of adding to tax complexity. In other respects, the McCain proposal significantly advances good tax policy by emphasizing lower rates while the Obama plan raises tax rates. The Obama plan also suffers in its proliferation and expansion of refundable tax credits, further (and inappropriately) using the income tax system as an income support system.
The Heritage Foundation's Center for Data Analysis (CDA) has a detailed overview of the two plans and an assessment of their economic effects.[1] According to CDA, by 2018 the economy would be more than $320 billion larger (after inflation), and average household income would be more than $2,600 greater under the McCain plan than under the Obama plan.
