Tax Impact

Sep 10, 2008 5:30pm

There are some interesting nuggets on taxes in our latest ABC/Post poll: Registered voters by a 17-point margin are more apt to think their taxes would rise under Barack Obama than under John McCain, a perception that cuts closely to vote preference.

So why are they even overall? Because Obama makes it back among those who see a positive or neutral tax impact.

All told 51 percent think their federal taxes would increase under an Obama presidency, while 34 percent think they’d pay more in taxes with McCain in the White House. Just 9 percent think McCain would cut their taxes; slightly more, 13 percent, say Obama would do so. The rest think their tax load would stay the same. (McCain, it's worth noting, has been running ads hammering Obama as a tax-raiser.)

Among people who think their taxes would go up under Obama, our poll finds that 72 percent support McCain for president; it’s interesting that nearly a quarter of them, 23 percent, support Obama anyway. Among those who think their taxes would rise under McCain, similarly, 75 percent support Obama; 18 percent stick with McCain nonetheless.

Since more people think Obama would raise their taxes, he loses more ground there. But he gets more support from people who think he’d cut their taxes or leave them alone than does McCain – and that brings the contest between them back essentially to a dead heat.

Specifically, McCain’s supported by about three-quarters of people who think he’d cut their taxes, but Obama wins 93 percent of those who think he’d bring their taxes down. And Obama does 7 points better than McCain among people who think he’d leave their taxes unchanged.

The interplay among these views helps explain why the two ultimately come out even in overall trust to handle taxes – 45 percent of registered voters pick Obama, 44 percent McCain – as well as in overall vote preference, 47-46 percent.

It’s also noteworthy that there’s less overlap on these questions than you might expect: Just 14 percent of registered voters say that both Obama and McCain alike would boost their taxes as president. That suggests we’re seeing political (and certainly partisan) judgments – but not sheer cynicism.

One other of our results touches on personal finances: Sixty-five percent of registered voters describe themselves as financially secure, about the same as in July; many fewer, though, say they’re “very” secure financially – just 20 percent. (We know from our weekly consumer confidence index that ratings of personal finances are always better than views of the buying climate and national economy.)

What’s interesting is the correlation with vote: Among financially secure Americans, McCain has a 55-38 percent lead; among the financially insecure (who’re more apt to be Democrats), it’s Obama by 63-30.

Per our Political Unit’s Teddy Davis, a summary of the candidates’ tax positions follows:

McCain says he’d make permanent the 2001 and 2003 income-tax cuts that expire at the end of 2010, including those that set the tax rate for most dividend and capital-gains income at 15 percent. He’d would preserve most of George W. Bush's temporary cut in estate taxes, establishing a 15 percent rate for estates worth $10 million or more.

McCain says he’d eliminate the alternative minimum tax, double the personal exemption for dependents from $3,500 to $7,000 and would cut the corporate income-tax rate from 35 percent to 25 percent.

Obama, for his part, says he’d make the 2001 and 2003 income-tax cuts permanent for individuals making less than $200,000 a year; people in the top two income-tax brackets would return to their 1990s tax levels of 36 percent and 39.6 percent (including the exemption and deduction phase-outs).

Obama says he’d return the top capital-gains rate for families making more than $250,000 to 20 percent; the tax rate on dividends also would be 20 percent for families making more than $250,000, rather than returning to the ordinary income rate. He proposes effectively to repeal the estate tax for 99.7 of estates, retaining it at 45 percent for estates valued at over $7 million per couple.

Obama also says he’d provide a yearly tax credit of $500 for individuals and $1,000 for married couples who work and pay Social Security taxes; and an exemption from income tax for people 65 and older earning less than $50,000 a year. On income above $250,000 per year Obama would impose an additional payroll tax of between 2 and 4 percent, starting in 10 years.

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