Barack Obama vs John McCain – What Will They Do With Your Money?
October 25, 2008
The Presidential election is just over a week away, and there are millions of undecided voters out there. The economy seems to be the hottest topic for this election, because we have recently seen the stock market go crazy, investment banking firms go under, and the sub-prime mortgage industry wreak financial havoc throughout the country.
We try to avoid partisan political discussions on this site, however, we want you to be be aware of some of the economic policies we might see when you vote for Barack Obama or John McCain. As the election draws near, we’re going to look at the candidates financial plans for topics like energy costs, tax reform, job creation, and home ownership.
We’re not political experts but this is what we understand from listening to McCain and Obama, if we didn’t explain something correctly or you disagree with our take, let us know in the comments.
One of the things Obama promises to do is enact a windfall profits tax on excessive oil company profits to give Americans a $1,000 energy rebate to help pay for rising energy costs. How he will define “excessive” is not explained, and now gas prices are back to the price they were a year ago, so this concept may not have as much traction as it would of a while back.
This tax relief is part of his plan to restore the economy, which is different from his tax reform plan.
- Provide a tax cut for “working” families. He will set up a tax credit called the “making work pay” tax credit, not sure what criteria he will use to classify a working family.
- He’ll eliminate taxes for senior citizens that make less than $50,000 a year.
- Obama wants to amend the way taxes are filed by requiring the IRS to gather basic financial information from banks and employers, pre-fill the forms, and send them to taxpayers whom then can verify that the information is correct and add or delete anything else on the forms.
Obama’s philosophy and plan towards trade is to make moves that help American workers keep their jobs and create new manufacturing jobs for American workers.
Part of this plan is to amend the NAFTA with Canada and Mexico. This was the center of controversy during the primary season, because he took a very strong position against NAFTA early on his campaign, and then retracted his strong comments after that. Although, he still wants to amend it, he is not specific what he would like to do with it.
Creating New Jobs
Obama takes two issues, creating jobs and creating alternative sources of energy, and fuses them together. He starts out by investing $150 billion dollars toward clean energy, and thus creating more jobs for workers because more of these plants will be created.
Obama also wants to mandate that all households derive 25% of their energy from renewable energy by 2025, and this will in effect, force the creation of more jobs due to higher demand for renewable energy sources.
Supporting Small Business
- Eliminate capital gains taxes on start-up businesses and small businesses; which I don’t undertand because small businesses don’t typically pay capital gains taxes do they?
- Plant entrepreneurship incubators around disadvantaged areas of the country to encourage small business start-up in areas that need their economies boosted.
Homeownership and Mortgage Reform
- Create a universal mortgage tax credit that will give an average of $500 tax savings to households making less than $50k per year.
- Ensure more accountability for the subprime mortgage industry, and create a more standardized way of helping consumers learn the true cost of a loan or mortgage product.
- Work to eliminate the provision that allows mortgage companies to prevent bankruptcy courts from modifying the mortgage payments of individuals that file for bankruptcy.
Those are some of the economy policies proposed by Obama that could effect your wallet in one way or another. Make sure you note that political candidates make a lot of promises on the campaign trail so you should do your own research and make an informed opinion about whether you think the promises are feasible or realistic. Next time we’ll take a look at John McCain’s economic plan.
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