Saturday, November 1, 2008

A More Detailed Look at How the Election Could Affect Your Taxes

I began researching a little more about the tax cuts and credits promised by the presidential candidates, spurred by a comment left here that Obama was offering credits, not cuts. In answer to that, both candidates are indeed offering various fully refundable tax credits. I'm listing some of Obama's proposed credits below. McCain has offered $2,500 to individuals and $5,000 to families to pay health insurance premiums, but this is to make up for the fact that he wants to tax health care benefits provided by employers. For most people, that will be a wash, according to this New York Times piece.

Reading up on those credits, I began to wonder if the small Obama tax cut promised by the Obama Tax Cut Calculator was accurate. After all, according to Obama's tax page, there are a number of credits my family could claim:

1000 per couple "make work pay" credit
1000 mortgage interest credit
1000 savings credit
1500 child care credit (that's 50% of what you pay up to $6k)
4500 in new credits my family could get

I'm guessing I might pay less taxes under Obama than the calculator knew -- after all, it didn't know about my annual mortgage interest and childcare expenses. Heck, if they actually pass a credit for 50 percent of childcare costs, it might motivate my family to use more paid childcare. Same with education -- if we get the $4000 college credit Obama promises, that would certainly inspire me to go back for that Master's degree.

If others are also dubious about the number they got from the Obama Tax Cut Calculator, here's a much more detailed one: Election Taxes. You'll need your tax forms to fill it out, though.


moana blogger said...

thanks for the closer look you took. i, too, was a bit perplexed at that comment in your recent post about how much you can save with obama's tax plan (registered democrat here) only i only googled far enough to learn that both candidates are offering tax credits and not necessarily tax cuts. that mccain health care plan is a bit shifty to me and doesn't help those who need it, like children of the uninsured working poor.

just my .02.