Issue Position: Taxes
The Obama-Biden Plan
Barack Obama and Joe Biden's tax plan delivers broad-based tax relief to middle class families and cuts taxes for small businesses and companies that create jobs in America, while restoring fairness to our tax code and returning to fiscal responsibility. Coupled with Obama and Biden's commitment to invest in key areas like health, clean energy, innovation, and education, their tax plan will help restore bottom-up economic growth that creates good jobs in America and empowers all families to achieve the American dream.
Obama's Comprehensive Tax Policy Plan for America will:
* Cut taxes for 95 percent of workers and their families with a tax cut of $500 for workers or $1,000 for working couples.
* Provide generous tax cuts for low- and middle-income seniors, homeowners, the uninsured, and families sending a child to college or looking to save and accumulate wealth.
* Eliminate capital gains taxes for small businesses, cut corporate taxes for firms that invest and create jobs in the United States, and provide tax credits to reduce the cost of healthcare and to reward investments in innovation.
* Dramatically simplify taxes by consolidating existing tax credits, eliminating the need for millions of senior citizens to file tax forms, and enabling as many as 40 million middle-class Americans to do their own taxes in less than five minutes without an accountant.
Under the Obama-Biden Plan:
* Middle class families will see their taxes cut -- and no family making less than $250,000 will see their taxes increase. The typical middle class family will receive well over $1,000 in tax relief under the Obama-Biden plan, and will pay tax rates that are 20 percent lower than they faced under President Reagan.
* Families making more than $250,000 will pay either the same or lower tax rates than they paid in the 1990s. Obama will ask the wealthiest two percent of families to give back a portion of the tax cuts they have received over the past eight years to ensure we are restoring fairness and returning to fiscal responsibility. But no family will pay higher tax rates than they would have paid in the 1990s.
* The Obama-Biden plan will cut taxes overall, reducing revenues to below the levels that prevailed under Ronald Reagan (less than 18.2 percent of GDP). The plan is a net tax cut -- his tax relief for middle class families is larger than the revenue raised by his tax changes for families over $250,000. Coupled with his commitment to cut unnecessary spending, Obama will pay for this tax relief while bringing down the budget deficit.
Impact of the Obama Tax Plan
Married couple making $75,000 with two children, one of whom is in college
[includes $1,000 Making Work Pay; $500 universal mortgage credit; and $4,000 college credit net of current college credits]
Married couple making $90,000
[$1,000 Making Work Pay tax credit]
Single parent making $40,000 with two young children and childcare expenses
[includes $500 Making Work Pay; $500 universal mortgage credit; and $1,100 from expansion of the child care tax credit]
70-year-old widow making $35,000
[reflects elimination of income taxes for seniors earning under $50,000]
Source: Calculations based on IRS Statistics of Income. Tax savings is conservative; does not account for up to $500 in savings from expanded Savers Credit and the $2,500 in savings per family from the Obama healthcare plan