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Summary of Obama's Economic Plans

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Understanding the Proposed Economic Policies of Obama and McCain – PowerPoint PPT presentation

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Title: Summary of Obama's Economic Plans


1
Understanding the Proposed Economic Policies of
Obama and McCainSponsored by ASP Civil
Controversy
  • Vinit Jagdish
  • Brandon Dupont
  • WWU Economics Department
  • October 6, 2008

2
A Current Snapshot of the U.S. Economy
  • Unemployment Rate
  • September 2008 Unemployment Rate 6.1
  • Nonfarm payroll employment fell 159,000 in
    September (760,000 jobs lost so far in 2008)

U6 Unemployment Rate
3
Gross Domestic Product
4
Inflation Rate
5
Credit Markets Freezing Up
6
Obama on Energy
  • Cap-and-trade system ? 2050 carbon emissions 80
    below 1990 levels
  • 150 billion over 10 years invested in clean
    energy
  • Make permanent RD tax credits for corporations
    and renewable energy production tax credits

7
McCain on Energy
  • Drill, Baby, Drill (maybe?)!!

8
Other McCain Energy Proposals
  • Cap-and-trade system ? 2050 carbon emissions 60
    below 1990 levels
  • Repeal tariff on imported sugar ethanol (rollback
    corn based ethanol mandates)
  • 2 billion per year for developing clean coal
    technology
  • 45 new nuclear plants by 2030
  • Plus cash prizes!

9
Obama on Health Care
  • Require health insurance for children
  • Pay or Play for employers
  • Targeted refundable tax credits to low-income
    families without access
  • National Health Insurance Exchange with private
    insurance options and a new public plan
  • Reduces number of uninsured by 18 million in 2009
    and 34 million by 2018.
  • Total estimated cost 1.6 trillion (if
    implemented in 2009)

10
McCain on Health Care
  • 2,500 refundable tax credit to individuals
    5,000 to households (indexed to inflation)
  • End tax exemption on employer sponsored plans
  • Pool and subsidize high risk individuals
  • Total estimated cost 1.3 trillion (if
    implemented in 2009)

11
Comparing Coverage Levels
12
Obama on Taxes
  • Make Bush tax cuts (2001 2003) permanent for
    middle class but allow them to expire for upper
    class
  • Increase max tax rate on capital gains from 15
    to 20 on those with AGI250,000 (married
    couples) or 200,000 (others)
  • Corporate taxes?
  • Estate tax 3.5 million exemption and 45 rate
  • Eliminate income tax for poor seniors (
  • Expand EITC and child/dependent care tax credit

13
McCain on Taxes
  • Extend 2001 2003 tax cuts except for estate tax
    (15, 5 million exemption)
  • Permanently adjust AMT for inflation
  • Cut corporate tax rate from 35 to 25
  • Deductions for RD and investment
  • Create simpler alternative tax structure?

14
Comparing the Plans Average Percent Change in
After-Tax Income
15
A Rising National Debt
16
  • Source Tax Policy Center, 2008

17
Note The OMB estimates earmarks to be 16.9
billion in 2008. Current federal expenditures for
2008 are not yet available, so the chart uses the
2007 value of 2880.5 billion from the BEA (the
ratio is approximately one half percent, i.e.
0.59). Since federal expenditures for 2008 will
exceed those of 2007, this means that the area
for earmarks shown in the diagram is
overestimated, i.e. it is larger than the true
value. The NY Times also notes that "earmarks ...
make up less than 1 of the federal budget.".
18
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