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44 Tax Features 1 (1999-2000)

handle is hein.tera/taxfeaturs0044 and id is 1 raw text is: TAX* FOUNDATION TAX FEATURES www. taxfoundation, org December 1999/January 2000 Volume 44, Number 1 Comparison of Tax Plans from Bush and McCain Shows Great Similarities, Great Differences Bush and McCain's tax plans differ most in their effect on elderly single filers at both ends of the income spectrum. A Tax Foundation analysis of how the Bush and McCain tax plans would affect taxpayers once the plans were fully effective in 2006 shows some similarities, and some striking differences. Both would provide significant tax relief to mil- lions of middle-class taxpayers, and both would increase the proportion of the total tax burden paid by the taxpayers who earn the most. The great difference between the two plans is that Senator McCain provides virtually no net tax relief to the lowest income married taxpay- ers, and effectively levies a large tax increase on low-income single retirees. The source of this tax hike is the set of corporate tax breaks McCain would eliminate. As is common practice, the Tax Foundation attributes the burden of corporate taxes, and therefore corporate tax hikes, to the owners of the companies. A recent study by the Federal Reserve Board showed that 48.8 percent of fami- lies own stock and that the median value of their holdings is $25,000. Many low-income elderly taxpayers receive a large share of their livelihood from pensions and other saving they did throughout their working lives. Much of this saving is invested in corporate equities, either directly, through mutual funds, or through their pensions. Increasing corporate income taxes reduces the value of these companies and re- duces the after-tax income received by the com- panies' owners. Said J.D. Foster, Executive Director and Chief Economist of the Tax Foundation, I'm sure Senator McCain didn't intend this, but his See Candidates on page 8 Inside. * Annual Dinner, Conference and Silent Auction Domenici on the Tax Code The Federal Income Tax Law: A Code * New Study of the Inland At with Isl Waterway Excise Tax War i tsel + Foster on Trade Policy + Conference on March 9 IJS. enator Pete Domenici (-NM) 6-7 Figure 1: Total Income Tax Relief for Single Filers by Income Class in Tax Year 2006 $5 $4 $3I $2 : $1Bush 0 j - McCain -$2 -$3t -$4V x -$5 __--I $1- $20K- $30K- $40K- $50K- $75K- $10OK- $200K- $500K- Over $20K $30K $40K $50K $75K $100K $200K $500K $11M $1M Adjusted Gross Income Note: Totals don't add to one because taxpayers with zero AGI and heads of households are omitted. Source: Tax Foundation

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