BYU NewsNet - Opposing Viewpoints: Taxes

College Democrats; The new American dream for dummies

By Taylor Jacoby

More now than ever, all we hear about is money. As if finances weren't confusing enough, the tax plans of John McCain and especially Barack Obama have been so distorted that discussion has been discarded in favor of the easily digestible, blanket statement, "He will raise your taxes. I won't." As BYU students, we all fall into different, though often overlapping, groups: we are dependents, workers, married couples and providers for young children. McCain and Obama's plans would affect each of these groups differently, so everyone should seek out concrete, accurate information instead of making assumptions before sealing your fate on Nov. 4.

The McCain campaign has released multiple ads that simply lie about Obama's tax plan. I think we all agree on the sensibility of honest disclosure concerning our money, so let's dispel some of those myths. First of all, it is very unlikely that he will raise your taxes. In fact, 95 percent of American workers, or everyone making less than $250,000 annually, will receive a $500 cut ($1000 for working couples). This "Making Work Pay" credit will eliminate federal income tax altogether for 10 million low-income families.

For the 3,000 students enrolled in the Marriott School of Business, it may interest you that Barack Obama will not raise taxes for small businesses either. Ninety-nine percent of small businesses make less than $250,000 a year (don't let that discourage you), according to the Tax Policy Center. In fact, most of these businesses will have their capital gains taxes completely eliminated and receive a 50 percent credit to reduce the cost of health care, rather than having their employer contributions to health insurance taxed as John McCain is proposing.

Some other vital aspects of the Obama plan for BYU students are the American Opportunity, Child and Dependent Care and Clean Vehicle credits. These provide services such as a $4,000 credit to college students for tuition expenses (meaning that community college and BYU are essentially free), a 50 percent refundable credit for $6,000 worth of child care (about 7.5 million working mothers would benefit from this) and up to $7,000 to purchase an energy-efficient vehicle (though he has no confirmed plans to make parking this vehicle on campus any easier).

Funding for this credit will come by repealing some of the tax cuts put in place for the Bush Administration for families making more than $250,000 a year. However, even with these increases, every American household will pay the same amount or less than they did in the 1990s. And these rates cannot be too economically debilitating since more than 20 million jobs were created and personal incomes doubled during this decade. McCain is going to fund his plan later. He proposes to cut corporate taxes by 25-35 percent in an effort to make our businesses more competitive internationally. This is a decent idea, but it does not figure in the existing national deficit, any funding for defense (of which there will be plenty on his foreign policy plan) or any unseen financial complications. As it stands with current tax breaks, Obama's plan would bring in an additional $700 billion in taxes over the next 10 years, while McCain's would cost the Treasury $600 billion.

The overwhelming majority of BYU students would benefit from Barack Obama's tax plan. He is working for the average American and not big business. His policies, if implemented, would ease the financial burden of students, families and small business. He is trying to help those reaching for the American dream, recognizing that those already at the top don't need assistance and could instead give back a fair portion to the economy that made them so successful.

But again, what is most important is that every citizen demands all the information. Research each candidate's plan for yourself. This is not the time to tick boxes. Know what you're voting for, not just who.

College Republicans; Spreading the wealth around

By Alexa Lee

The proposed policies of Barack Obama resemble the failed polices of President Herbert Hoover. Herbert Hoover was the man in charge when a recession in the 1920s slipped into a long, hard depression in the 1930s. Will history repeat itself? Will a deep recession spiral into another great depression? Vote for Obama, and you'll find out.

Hoover increased tariffs, putting a strain on trade relations and raising costs of goods. Hoover used policies of protectionism, isolating America when it most needed outside support. Along with ripping up the North American Free Trade Agreement and tightening foreign trade regulations - policies reminiscent of Hoover's protectionist efforts - Obama wants to raise taxes on both small businesses and large corporations, two engines that drive American jobs.

When money gets tighter, do you spend the extra money on the fresh foods packed with nutrients essential to your health, or do you opt for whatever you can get at the cheap and convenient Totino's dollar pizza? Common sense says, "We're having Totino's tonight!" So when corporations and businesses have to pay higher taxes, decreasing their budgets, will they spend more on expansion, innovation, job creation, higher wages and increased benefits? Common sense would argue no. Will corporations spend the extra time, effort and money to make it efficient to keep business in America, when it will be cheaper to send production and jobs abroad? Again, common sense says no.

So why is Obama daring depression to grasp onto the few remaining strengths in the American economy, when common sense would suggest doing the opposite? The United States is only second to Japan when it comes to corporate tax rates, with businesses paying 39.3 percent in taxes. Ouch. Obama's plan would propel the United States to the top of the corporate tax food chain.

McCain has proposed cutting corporate taxes to 25 percent, a move that The Tax Foundation agrees would increase America's international competitiveness.

Under Obama's plan, higher taxes aren't just expected for those in the Fortune 500 club. Joe the Plumber is reconsidering investing in a business worth $250,000, because he isn't sure he could balance his mortgage payment and increased business taxes. Forty-four percent of Obama's tax cuts for the middle will go to people who don't even pay an income tax. Some argue that even if these folks don't pay income taxes, they pay into Social Security. So, in reality, Obama seeks to worsen the already underfunded Social Security program.

That makes sense.

Also, the tax credits Obama is proposing for the middle class phase out as income rises. Families making $40,000 will actually lose up to 40 cents in credits for every dollar earned from working overtime or taking a new job, punishing Americans for working toward the American dream.

Meanwhile, McCain looks to support the middle class by continuing Bush tax cuts and providing a $5,000 tax credit to purchase the best health care plan for individual and family needs. McCain's plan calls for a first year tax deduction for businesses on equipment and technology investments, encouraging innovation and competitiveness. To further American economic competiveness through innovation, McCain proposes a permanent tax credit equal to 10 percent of wages spent on research and development. This policy will provide incentive for businesses to improve and expand as well as simplify the tax code. To help families keep their business, McCain proposes trimming the Estate Tax to 15 percent and permitting a $10 million exemption.

John McCain's tax policies encourage innovation and ambition in American businesses, instead of punishing business and decreasing competitiveness, during a time when business needs the extra support. His policies keep in mind middle class Americans working for their piece of the American dream. Obama's policies are politics over common sense. Obama seems stubbornly intent on repeating the mistakes of the past, the mistakes of President Hoover which pushed a recession into a depression. John McCain's policies are ones of common sense over politics.