I came across an article today by Jeremy Siegel on Yahoo Finance that gives a nice summary of each Presidential candidate’s tax policy. I will attempt to summarize the summary.
Obama wants to increase the dividend and capital gains tax rate to 24 percent. At the same time, Obama recognizes the power of start-up companies to create jobs, and wants to eliminate capital gains tax on them. Obama would also like to raise the top income tax bracket to a 39.6 percent tax rate.
Clinton is essentially advocating for the same rates as when her husband was in office, before the Bush tax cuts. That would mean capital gains taxes would be raised to 20 percent from their current 15 percent rate, and dividend income would be taxed at a maximum 35 percent. Clinton also supports a raise in the upper tax bracket rate to 39.6 percent, same as Obama.
McCain wants to keep the current tax rates, but Siegel points out that he may not be able to. The Bush tax cuts are set to expire in 2011, and taxes will revert to pre-Bush rates if the cuts are not re-approved. Seeing as the Democrats strongly oppose the Bush cuts, and that they are likely to control Congress, McCain could have a difficult time getting the necessary laws passed. It should be noted that McCain and several other Republicans voted against making the Bush tax cuts permanent, which is why Bush had to settle for a test run of the current rates.