Comparing presidential tax plans

Which do you prefer, tax cuts with debt or tax cuts that are paid for?  That's your choice in the tax plans of the campaign.  McCain's plans skews to the rich (in percent of income and absolute dollars) and will increase the deficit.  Obama's plan offers tax cuts skewed toward the middle class and pays for it with an income tax surcharge on the very rich.

 

If Tax Cuts Don't Boost the Economy, What Do They Do?

The left-leaning Center on Budget and Policy Priorities has a very thorough analysis of state tax cuts during the latter half of the 1990s and the economic performance of those states since. While some of the tables and figures in the report are probably obscuring some contradictory data (note the comment about Michigan in the box on page 3), the overall analysis is startling. Tax cuts lead to slower economic growth, higher unemployment and bigger budget deficits.

A traditionally high-tax state like Minnesota should take note. A recent Minnesota Public Radio news story (I was unable to find a link) noted that Minnesota's advantage in the unemployment rate - versus the national average - is the smallest it's been in over 10 years. Is Minnesota becoming average by becoming average?

Bush Budget: Less Health Care, More Wal-Mart

In keeping with tradition, President Bush's submitted budget proposes extensions of all his tax cuts, including a repeal of the estate tax (costly war, what?). Matt Taibbi of Rolling Stone excoriates the Bush plan, noting that the cuts to Medicaid - health care for the poor - are about the same as the bottom line boost to the Walton family, the Wal-Mart heirs.

That's right. Bush's budget would reduce funding to Medicare by $28 billion and guarantee a tax break worth $32 billion to the Waltons. Now that's what I call democracy!