The Truth About Our Taxes Under a John McCain Presidency

Under the McCain tax plan, John and Cindy McCain will recieve as large a tax break as almost half the town of Wasilla, Alaska.

John McCain has made taxes one of the major talking points of his campaign. The problem with this is that he’s lying to your face. While many of his claims that Barack Obama is going to raise various taxes are true, his is leading people who will NOT be affected to believe that they will. The vast majority of us will actually pay MORE under a McCain-Palin administration. Let’s take a look at each claim individually:

Federal Income Taxes:
It is true that Barack Obama will raise federal income taxes – if you make more than $227,000 a year. If you make less than that, you will receive a tax break. Under John McCain’s plan everyone will receive some tax relief, but the benefits are grossly skewed towards the upper class. For example, someone making $38,000 will pay 0.8% less in federal income taxes under McCain. Someone making $112,000 will pay 2.3% less. Someone making $227,000 will pay 3.46% less. If you make $603,000 you’ll pay 7.52% less, and someone making 2.9 million dollars a year will pay a whopping 9.28% less of their income to the federal government. If you make less than $112,000 a year, you will receive a bigger tax break under Barack Obama’s plan, and even though you’d still see a tax break under McCain, at $40,000 a year you’ll get $319 back while someone making 3 million a year will get more than a quarter of a million dollars back. Under the McCain tax plan, John and Cindy McCain will recieve as large a tax break as almost half the town of Wasilla, Alaska.

The Burden on Small Business:
One of the major talking points of both John McCain and Sarah Palin’s stump speeches is that small business will suffer under Obama’s tax plan. Their reasoning for this is two-fold: firstly, Obama has vowed to raise payroll taxes for those employees making more than $250,000 a year. Right off the bat I think we can agree that most “small” business don’t pay any of their employees more than a quarter of a million dollars a year (certainly not the small businesses that they are inferring in small town America). Secondly, they are making this claim based on the fact that many small business owners file as individuals. What they aren’t talking about however, is that only the top 1.4% of small business owners are in the tax brackets that will be affected by Obama’s tax hikes. I would venture to guess that most of the businesses in the top 1.4% aren’t struggling to get by.

The Estate Tax:
As it stands (and would remain under an Obama Biden administration) the estate tax (or “death tax” as the republicans have chosen to characterize it) affects only estates worth more than 3.5 million dollars, though admittedly it comes in at a hefty 45%. John McCain proposes raising that cap to 5 million dollars, and lowering the rate to 15%. Not only is McCain trying to make a political stance on an issue that affects fewer than 400 people each year, but it’s a move that would also cost us hundreds of billions of dollars in tax revenue over the next decade.

Health Care Tax Burden:
Here’s one that neither candidate is talking about, but that is extremely important. John McCain wants to count any money your employer pays towards your health insurance as income, and tax you on it. The average plan for a family costs about $12,000 a year, and the average employer pays more than $8,000 of that. That means that on top of the $3-4,000 you are already paying towards that health insurance, you will now pay federal income tax on an additional $8,000 of income. For someone making $35-60,000 a year, that will amount to more than $100 a month that you will be paying in new taxes – an amount that is significantly greater than the $319 you’ll be getting in tax relief under the republican plan.

To put it simply, under John McCain all those making more than $112,000 will see their true tax burden go down. If you make less than that amount and don’t have employer provided health coverage, you will see a SLIGHT decrease in your tax bill. If you make less than $112,000 and DO have employer provided health coverage, you will actually pay more in taxes than you do today, while those making millions will get a nice $269,364 break from the McCain Palin administration. This is the opposite of the Obama plan, wherein those making less than $227,000 will see a dramatic decrease in their tax bill while those making more will see an increase (the big increases don’t start until you earn more than $603,000 a year).

How can anybody making less than 6-figures vote for John McCain on the basis of taxes? What really frightens the republicans and their supporters is wealth redistribution, because they have it and want to keep it. If you’re not wealthy, you are hurting yourself by supporting the republican ticket, yet somehow they manage to convince the general populace that Barack Obama, the guy who would lower the average person’s tax bill, is a tax and spend menace. It’s time to listen to the facts and not the sound bites. If you’ve used the term “death tax” or argued against it and you don’t stand to inherit more than 3.5 million dollars, then you are a misinformed fool.