There’s a lot of debate going around right now about tax policy. I thought it’d help to look at the actual tax rates compared to historic numbers. But let’s keep in mind that I took Math for Elementary Education in college (i.e., I’m no mathematician or economist).
The big question seems to be whether or not Barack Obama’s tax policy is socialist (or how socialist is it, depending on your perspective). So let’s take a look at those proposed income tax brackets and compare them to historic income brackets.
To simplify things, I’m only looking at income tax rates for the highest bracket:
- Current income tax: 35% for those earning more than $357,700.
- Obama’s proposed income tax: 39.6% for those earning more than $357,700.
- McCain’s proposed income tax: remain at 35%
(The current tax brackets are set to expire and revert to 2000 levels, so both Obama and McCain talk about their plans as cuts, which is a bit misleading. They’re both talking about extending the cuts, except that Obama wants to expire the cuts for the top two brackets; Source)
So the difference between McCain and Obama for the top bracket is 4.6% (for the second highest bracket the difference is 3%; for other brackets there’s no difference*). I have a hard time believing that 4.6% pushes us into socialist territory. The fact is both favor a progressive tax policy where the more money you make the greater percentage of taxes you pay.
Bottomline: The McCain and Obama tax proposals are relatively similar. Compared to a historic perspective, they’re very similar.