Will Obama tax home sales, or raise Capital Gains taxes?

With “both John McCain and Barack Obama offering tax cuts,” according to the Christian Science Monitor, “the 2008 election promises a boost for the typical family budget” regardless of which one wins. But it could also strain the much larger budget of the US government, and there is abundant misinformation circulating about Obama’s plans (and a few outright lies.)

The Tax Policy Center has put out an analysis of the Obama and McCain tax plans. Here’s their conclusion:

If enacted, the Obama and McCain tax plans would have radically different effects on the distribution of tax burdens in the United States. The Obama tax plan would make the tax system significantly more progressive by providing large tax breaks to those at the bottom of the income scale and raising taxes significantly on upper-income earners. The McCain tax plan would make the tax system more regressive, even compared with a system in which the 2001–06 tax cuts are made permanent. It would do so by providing relatively little tax relief to those at the bottom of the income scale while providing huge tax cuts to households at the very top of the income distribution.

What follows is a brief discussion of some of the particulars people seem to be asking about often – with interest that may well stem from the debunked but still-circulating emails.

Home Sales:

The claim that Obama would impose a 28 percent tax on the profit from “all home sales” is false. Both Obama and McCain would continue to exempt the first $250,000 of gain from the sale of a primary residence ($500,000 for a married couple filing jointly) which results in zero tax on all but a very few home sales.

Capital Gains Rate:

It’s untrue that Obama is proposing a 28% capital gains tax rate. He said in an interview on CNBC that he favors raising the top rate on capital gains from its present 15% to 20% or more, but no higher than 28 percent. And as for a 28% rate, Obama added, “my guess would be it would be significantly lower than that.” Furthermore, he has said only couples making $250,000 or more (or singles making more than $200,000 according to his policy advisers) would pay the higher capital gains rate. That means the large majority of persons who pay capital gains taxes would see no increase at all.

Why all the misinformation?

Some of it’s based on simple confusion. After all, Obama’s not prone to cute sound-bites such as “Read my lips: No new taxes.” Some of the emails circulating, however, are so consistently mis-representing the facts – facts that are easy to verify – that one can only conclude a deliberately malicious intent to strike fear in the wallets of middle class voters is behind the lies.

In an ideal setting voters would all have access to reliable, current, accurate information sources. They’d also take the time to examine that information, no matter if it was Obama’s stand on taxes, McCain’s statements about taxes or his speeches on why health care doesn’t need the fixes Obama’s proposed, or rookie Governor Palin’s changing stand on the pork barrel “Bridge to Nowhere.” In practice, time is short, and rumors often get as much (if not more) coverage as facts on the evening TV news or in newspapers. Futhermore it’s often hard to tell which part of a story is the truth. The media producers have motives that must be examined, particularly those who profit from selling commercials since they obviously desire to make a profit. When in doubt, follow the money.

Who profits from the election of McCain or Obama — or your mayor?

Who profits from voters feeling disenfranchised and tuning out?

The airwaves are as full of misinformation – willfully employed – as the email is.  Are you ready to step up and be an Agent of change, to contribute to help spread the truth?