THE EDWARDS TAX PLAN
July 27, 2007
The tax proposals of presidential hopeful John Edwards lays down a big marker in the 2008 campaign tax debate, but it's unclear how easy it would be to implement his ideas, says the Wall Street Journal.
Highlights of the Edwards plan:
- The capital gains tax rate would be raised to 28 percent from 15 percent and income taxes on those making more than $200,000 a year would be boosted in order to finance tax cuts and other benefits for middle- and lower-income families.
- A dollar-for-dollar government match -- up to $500 a year -- for families with incomes of as much as $75,000 who use the money for such things as college, a home or retirement.
- Lower-income families would be eligible for another $500 in government match money and the first $250 in investment income would be tax-exempt for all families.
- Expansion of the childcare tax credit to cover up to 50 percent of childcare expenses up to $5,000 and expand the earned-income tax credit.
But while Edwards has detailed how he plans to pay for the proposals, the fiscal realities of the government may throw a wrench in his plans, says the Journal.
"The dilemma that's going to confront the next president the day he or she walks into office is the huge fiscal gap in terms of the promised expenditures we're going to make," said Eugene Steuerle, senior fellow with the Urban Institute, a nonpartisan think tank. Looming obligations for entitlement programs like Social Security and Medicare are going to leave little room for spending or tax cuts.
Source: Deborah Solomon, "Edwards's Tax Plan Focuses On Low, Middle-Income Families," Wall Street Journal, July 27, 2007.
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