On the Question of Taxes

The issue of taxation has generated a lot of heated debate and exchanges between the Presidential candidates. Both claim that the tax proposals of the other will result in higher taxes for Americans. Recently, the Tax Policy Center (TPC) came out with an updated comparative analysis of Barack Obama's and John McCain's tax proposals.
Their findings were pretty interesting.

When compared to current law, McCain's plan would reduce taxes by nearly $4.2 trillion and Obama's plan would reduce taxes by $2.9 trillion over the next decade. This would be the case if the 2001 and 2003 tax cuts expired in 2010 and the Alternative Minimum Tax (AMT) was fully effective with 2008 exemptions.

However, if we assume that the 2001 and 2003 tax cuts are extended, Obama's plan would result in an increase in Tax revenues of $600 billion whilst McCain's would lead to a loss of revenues of about $600 billion.

The McCain campaign is fond of accusing Obama of wanting to "raise taxes" on Americans. Even a brief google search would reveal that this claim is a partial lie.
Most Americans would experience a greater tax cut under the Obama plan than under the McCain plan. By year 2012, middle income tax-payers, which is most of America, would experience after tax increases in income by 5% or nearly $2,200 annually. Those in the top 1% income bracket would see their taxes go up by about $19,000 or 1.5% fall in after tax income.

However, under the McCain plan middle income families would only experience a 3% increase which is about $1,400 annually. In contrast to Obama's plan, McCain's plan would cut taxes for those in the top 1% by 9.5% which would raise their after tax incomes by about $125,000.

Thus, the truth is both plans would result in lower taxes for most Americans, however, most Americans would experience greater tax cuts under the Obama plan.