Barack Obama and John McCain Share Economic Proposals
October 14, 2008 by Miranda Marquit
Filed under Finance
Yesterday, Barack Obama unveiled six proposals that he claims will help the economy (especially ordinary Americans affected by the current situation. This morning, John McCain revealed a couple of his ideas regarding the economy at a campaign stop in Pennsylvania. While plans offered this morning from the current administration focused on helping banks get through the credit crisis intact, Obama and McCain are bent on wooing voters with promises of policies that will help the struggling middle class with their personal finances.
Tax proposals
For the most part, both of the plans hinge on taxes:
- John McCain wants to reduce the tax rate on early withdrawals from IRAs and 401(k)s while temporarily waiving the 10% early withdrawal penalty. (Obama wants to waive the penalty, but has not expressed a plan for lowering the income tax on such withdrawals.)
- Barack Obama wants to give companies a $3,000 tax credit for each person hired. His reasoning is that it will encourage employment at a time when the jobless rate is on the rise.
- John McCain wants to slash the long-term capital gains tax for 2009 and 2010. That way, he insists, more people will want to invest and save. Plus, in theory, more people and businesses will sell their shares in order to take advantage of the tax treatment, and that will result in a chunk of capital that can be used for other things.
- A tax write-off acceleration for those forced to sell in the current market is also being encouraged by McCain.
The rest of Barack Obama’s propsals
While John McCain’s new details pretty much stop on new tax breaks, Obama outlined a few more points:
- The Federal Reserve should be able to lend to state and local governments in order to increase liquidity on a local level.
- Unemployment benefits should be extended by 13 weeks. (Benefits would be exempted from income tax.)
- In addition to removing the early withdrawal penalty on up to $10,000 from retirement accounts, Obama proposes that seniors, on a temporary basis, not be forced into taking the minimum disbursement at age 70.5 to give accounts time to recover from the ravages of the stock market.
- A 90-day moratorium on foreclosures from institutions that take advantage of government bank rescue programs.
While I think that many of the measures proposed by both candidates would help ease things for regular people, I am a little wary of the idea of waiving early withdrawal penaties from retirement accounts. After all, now is not a good time to draw down what capital remains in the account. I am also wary of extending unemployment benefits, as well as skeptical about how much slashing the long-term capital gains tax would actually benefit ordinary folk.
What do you think of the proposals offered by the presidential candidates?
Dunno… is “”slash the long-term capital gains tax for 2009 and 2010″ fighting a bubble with a bubble? (encourage speculation)
Or is it the opposite… a form of “reduce the tax rate on early withdrawals from IRAs and 401ks?” (encourage liquidation)
I’m not sure how it helps us long term, especially when we create the expectation of higher future taxes, but I’d love to see more of the rationale.
Thanks for your thoughts, Sean! I agree that more rationale would be nice. But during an election, we’re probably not going to see a lot beyond, “It’ll help you! I promise!”
I don’t think much of any of them. I’ve carefully revised both their policies.
They’ve changed them around several times.
And with the exceptions of a few things, they’re virtually the same.
Voting is irrelevant.
Major corporations donate to both parties campaign’s for a reason. Either candidate will have to return favors once elected, regardless their policies.
The big financial institutions in this country make the laws, everyone else (politicians) are just puppeteers. Poster boys, if you will.
Thanks for sharing, Luis. I think that many people are starting to feel that way this election. And while I, personally, will vote for Obama this election (first time I’ve voted for a major party presidential candidate in 8 years), I rather intensely dislike our two-party system. And I would like to see lobbyists have reduced power.
Voting is irrelevant.
Major corporations donate to both parties campaign’s for a reason. Either candidate will have to return favors once elected, regardless their policies.
The big financial institutions in this country make the laws, everyone else (politicians) are just puppeteers. Poster boys, if you will.
Luis: If this is the case, then Obama owes a bunch of favors!!!!
While special interests do throw a lot of money around, I still get out there and vote. It can be a tough slog, though. However, I think that it is good to start at a more local level. If you can vote out the Congressional representatives that take the money and bow to the pressure, eventually politicians will get the idea.
I do like Karen’s point, though. Obama has had record numbers of individuals giving in smaller amounts — between $5 and $100. He’s also had record amounts of individuals forking over the minimums. Not to mention the volunteers that have been turning out in droves. He’s so well-funded in large part because of individuals — so maybe if he’s elected he’ll return the favor to the American people.
I think tax cuts is not the answer. Money shoulld be destributed to public is those who are at the verge of house foreclosure,debt trapped woulld be given a 50.000 /taxpayer
credit approval then foreclosure will be resolve and money will circlulate from the public up to car makers and lastly it will buy time foe a person with outr a job to find job within 3 months
I agree that tax cuts are not the best answer. Then what happens when you try to raise them later to pay for all the money you’ve been spending? I agree that — for the purpose of accomplishing stated objectives — a one-off payment to individuals would be more effective.
tax cuts will not be the answer coz it will only cut public services and job lost. GOVERNMENT SHOULD GIVE MORE APPROVAL THE ONCE WHO ARE APPLYING FOR A LOAN SPECIALLY WITH SECURED ONES. GOVERNMENT CAN GIVE 50.000/TAX PAYER SO THEY CAN PAY CREDIT CARD AVOID FORECLOSURE, AND INCREASE SPENDING ,THE PEOPLE, BANKS EVEN THE AUTO MAKER WIOLL BENEFIT COZ MONEY WILLCIRCULATE