Obama on Taxes
• Income Taxes: Senator Barack Obama (D-Ill.) would hold most income tax rates steady, making permanent the Bush tax cuts for the vast majority of individual taxpayers. With those cuts scheduled to expire in 2011, he would allow rates for households making more than $250,000 (or individuals making more than roughly $200,000) to return to earlier levels. Earners who now pay today's maximum 35% rate would see their top marginal rate go back to the 36.9% in effect in the Clinton years, for example.
• Estate Taxes: Obama proposes setting inheritance taxes permanently at 45% on estates over $3.5 million.
• Capital-Gains Taxes: Obama would again limit any increases in capital-gains rates, as well as taxes on dividends, to households making more than $250,000 or individuals bringing in more than $200,000. For those folks, he proposes increasing the maximum rate to somewhere between 20% and 25%.
• New Tax Cuts: Obama has proposed a handful of new tax credits and other adjustments aimed at helping struggling families, students, and others. He would institute a refundable tax credit of 6.2% of earnings, up to a maximum of $8,100, for example, along with a refundable mortgage credit equal to 10% of loan payments for homeowners who don't itemize their deductions. Students would be eligible for a $4,000 annual credit to help defray college costs, while Obama would eliminate income taxes for seniors making less than $50,000.
• Economic Stimulus: Obama has proposed giving businesses a $3,000 tax credit this year and next for every net new job they create to help jump-start the stalled economy. He would also temporarily eliminate taxes on unemployment benefits and calls for legislation that would allow struggling individuals to take up to $10,000 from their IRA or 401(k) retirement accounts this year and next without paying the normal tax penalty for early withdrawals.
• Business Taxes: Obama has proposed eliminating all capital-gains taxes on investments in small business. He would also make permanent the R&D tax credit and credits for renewable energy production. But elsewhere, he would eke more revenue out of the corporate sector: He would like eliminate loopholes that he says favor oil and gas companies, for one. And he favors shifting the tax code to favor companies that create jobs in the U.S. and increase taxes on those that move jobs overseas.
Obama on Jobs
• Job Creation: Obama wants to steer $50 billion into an economic stimulus. He proposes that $25 billion go into a "Jobs and Growth Fund" to prevent cuts in road and bridge maintenance, and to fund school repair. He says this effort will save more than 1 million jobs.
• 'Green' Jobs: Obama wants to create 5 million new "green jobs" and invest $150 billion over 10 years in biofuels and fuel infrastructure, plug-in hybrids, commercial-scale renewable energy, low-emissions coal plants, and a new digital electricity grid. He also wants to expand federal transportation investments to the tune of $60 billion over 10 years, which he says will create 2 million jobs.
• Unemployment: Obama is calling for a temporary expansion of the unemployment insurance program for those who have exhausted their current benefits. He'd also extend unemployment insurance to a bigger pool of workers, including some part-time workers.
• Trade: Obama says he opposes new deals that lack labor and environmental safeguards. Obama wants to renegotiate the North American Free Trade Agreement with Canada and Mexico so it has more favorable terms for U.S. workers. He wants to expand the Trade Adjustment Assistance program, which trains workers who lose their jobs because of offshoring.
• Labor Rights: Obama wants to strengthen the ability of workers to organize unions through what's known as the Employee Free Choice Act (EFCA). The bill allows workers to join a union if a simple majority sign authorization cards instead of holding an election. He has won the support of the two major U.S. labor federations, the AFL-CIO and Change to Win, whose leaders say EFCA is their top legislative priority.
