I figured we should take the debate to a new thread :-)To start off, I got this from my Netscape news(whatever service they use)
Tax Plan Benefits in Eye of Beholder
WASHINGTON (AP) - Republican presidential nominee George W. Bush and Democratic candidate Al Gore are fiercely debating which tax cut proposal is best for the average American. Who's right?
As usual in matters of the federal tax code, it depends. It depends on how much taxpayers earn, whether they have a house or children and what they're doing in life.
The basic difference between the two: anyone who pays income taxes now would get money back under Bush's $1.3 trillion plan, while Gore's $500 billion proposal would only kick in for people engaged in certain activities and below specified income levels.
For example, the two proposals would both cut taxes for a couple earning $60,000 a year with two children, but in much different ways and depending on a family's choices, according to calculations produced by the Gore and Bush campaigns.
Under Bush's proposal, this couple would see their income tax rate fall from 15 percent to 10 percent. The current $500 per-child tax credit would rise to $1,000 for each child. Assuming they itemize their deductions- most homeowners do to deduct mortgage interest - that amounts to a tax cut of $2,050.
Gore's plan works differently. Under his example, the married couple takes the standard deduction - which Gore would significantly raise - instead of itemizing deductions. They have one older child in college, so they claim Gore's proposed tax credit for tuition and expenses. And they could get $2,000 in government matching funds if they take advantage of tax-free
retirement savings accounts Gore is pushing. Total tax cut: $3,025.
The bottom line in this situation is that Bush's plan is much simpler and doesn't require the taxpayer to do anything except earn money, while the benefits of Gore's proposal depend upon taxpayers taking certain actions or dealing with particular needs.
In another example, a single working mother with two kids earning $30,000 a year would get a $1,310 tax cut under Bush's plan. Dropping the 15 percent income tax rate to 10 percent and doubling the per-child credit would essentially remove her from income tax rolls.
Gore's plan could be similarly generous, but again only under certain circumstances. The single mother could get a $1,358 tax cut, but that assumes she is attending community college to claim the higher education tax credit and has her kids in day care to
claim the expanded child care credit Gore is proposing. She would also benefit from a higher earned income tax credit under Gore but would remain on tax rolls.
Except for the proposed increase in the standard deduction for married couples, Gore's tax credits are phased out for taxpayers with incomes above $100,000 a year. This holds down the cost of the plan and ensures more money from the projected budget surplus is available for such priorities as education, paying down public debt and shoring up Social Security and Medicare.
But targeting the tax relief almost exclusively at people in a certain income group allows Bush to claim that Gore's plan would only benefit a portion of all taxpayers - and only if they make the right choices.
``The so-called 'targeted' tax cut means that some are targeted out of tax relief,'' Bush said during a campaign swing last week.
Gore, on the other hand, is able to argue that giving an across-the-board reduction in tax rates, as Bush would do, means that 60 percent of the overall Bush tax cut would go to taxpayers with incomes above $92,500 a year - because they pay the greatest share of all income taxes in America.
``I'll fight for middle-class tax cuts that go to you and your families, that go to the people who have the hardest time paying the taxes, who most need the help, who most need the attention and the priority placed on them,'' Gore said in a campaign speech last week.
Ultimately, the difference comes down to political philosophy: Bush and the Republicans favor a more straightforward refund of surplus tax revenue to the people who pay it, regardless of their income level or life situation. That has the added attraction of holding down government spending.
``The governor believes everybody deserves tax relief,'' said Bush spokesman Ari Fleischer. ``He thinks it's wrong to take 40 percent of somebody's income, that nobody should pay that much in taxes.''
To Gore, tax cuts are one of many ways to use the budget surplus to tackle social problems, particularly for lower-income people.
``Spending the whole surplus on tax cuts for the rich deprives everybody else of sharing in this prosperity,'' said Gore spokesman Doug Hattaway. ``It's a matter of doing what's right and putting first things first.''
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Intelligence, Integrity, Responsibility.
Vote Bush/Cheney 2000
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