Election 08: What’s Best for the U.S.? - PowerPoint PPT Presentation

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Election 08: What’s Best for the U.S.?

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  1. Election 08: What’s Best for the U.S.?

  2. Consumer Taxes Keep the current capital gains and income tax structures. (The Bush Plan) Double the dependent exemptions, benefitting big families of all incomes. Give tax credits for those with qualifying health care Raise taxes on capital gains and dividends for those making more than $250,000. Cut taxes $500 for workers or $1,000 for working couples under $250,000 Raise the top two income-tax brackets tax percentages Seniors with little or no income pay no income tax. John McCain Barack Obama

  3. Consumer Tax Analysis McCain plan – Lower individual taxes regarding income and gains/dividends, Encourage taxpayers to consume, save & invest in businesses (all improving economic outcomes) Obama's plan- Raise individual taxes for upper tax brackets, reducing business investments and spending of “wealthy” Low income tax credits projected to have little impact

  4. Corporate Taxes Reduce the current corporate tax rate (35%) to 25%. Broaden corporate tax base and close corporate loopholes to raise revenues Small Businesses: Reduce the individual tax rate (continuation of the Bush administration’s plan) to reduce taxes for partnerships or Schedule C corporations who are taxed at individual rate Maintain corporate tax rate of 35% Eliminate all oil and gas loopholes, impose windfall profits tax on same companies Reverse policy that allows tax deferrals or breaks for companies investing overseas Small Businesses: Eliminate capital gains taxes; raise taxes on individuals earning more than 200,000. John McCain Barack Obama

  5. Both candidates - reduce loopholes in taxation, mainly for gas and oil industry Small Businesses (where the most new US jobs are created) Corporate tax cut combined with Obama’s tax increase on the uppermost income brackets would hurt some small businesses (ex. partnership vs. corporation – no cut for small biz., same high inc. tax) Neither addresses immediate needs (like payroll taxes) Tax cuts => reduced government revenue If the revenue is not made up by spending cuts or revenue-raisers, government deficit will increase Increase in the deficit => to higher interest rates, reduce consumer spending and business investment, higher taxes in the long run Analysts predict that the deficit will increase under either Obama ($3.3 trillion) or McCain ($4.3 trillion). Corporate Taxes Analysis

  6. Federal Spending Cut taxes, reduce discretionary spending, stimulate economic growth Balance budget by 2013 Increase defense spending, remain in Iraq (perception = longer than Obama) Limit spending growth 1 yr Discretionary spending freeze/review of all federal programs, make Bush tax cuts permanent Billions in healthcare and health technologies Billions in clean energy investment Transportation infrastructure payments to generate $35 billion annual activity Mandating competitive bids on government contracts over $25k Allow Bush tax cuts to expire John McCain Barack Obama

  7. Spending Analysis End Goal is the Same – Growth McCain trends towards supply-side Obama trends towards demand-side

  8. Foreign Trade Pro Globalization Wants to engage in multilateral, regional and bilateral efforts to reduce barriers to trade Strongly supports the NAFTA, CAFTA and GATT Strongly supports fair trade ideologies. Wants to increase exports by strengthening American Companies Supports Outsourcing Supports globalization but wants to adopt a “cautious” approach towards it. Strongly opposes CAFTA. Opposes NAFTA in its current form. Against outsourcing Supports trade policies that will open foreign markets but not at the expense of labor and environmental problems. John McCain Barack Obama

  9. Foreign Trade Analysis Policies of Obama Appears to move away from globalization. Opposes outsourcing, reducing the competitive advantage of American industries. Reduce trade deficit by reducing imports and raising barriers. Policies of McCain Free trade, eliminate barriers, bolster exports Understands outsourcing as a part of advancing economy and re-training workforce

  10. Conclusion Overview of the Issues • Interrelated -Ex: Tax cuts, and government spending, & foreign trade all affect the national deficit – Each contributes to increase/decrease spending, encourage/discourage growth, etc. • International perspective – Ex: China finances more and more of our debt • How will increased spending put economy back on track? • Government spending doesn’t always equal increased output. • Higher corporate taxes • Decreases incentives for businesses and consumers to invest • Decreases foreign incentive to invest which supports our current debt financing. • Trade barriers only exacerbate the problem, as free trade bolsters national output and invites foreign investment