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We’re talking taxes. And Americans are almost coming to blows over how taxes will change after the election is over.
McCain on Taxes
According to the Associated Press Senator John McCain proposes extending all of President Bush's tax cuts and cutting corporate tax rate to 25 percent. He’s also pledged not to raise taxes, but then equivocated, saying nothing can be ruled out in negotiating compromises to keep Social Security solvent.
He twice opposed Bush's tax cuts, at first because he said they were tilted to the wealthiest and again because of the unknown costs of Iraq war. Now he says those tax cuts, expiring in 2010, should be permanent.
If McCain wins the White House how will it impact you? The Nonpartisan Tax Policy Center estimates a tax break of $325 for the middle 20 percent of taxpayers -- those making $37,600 to $66,400.
Obama on Taxes
Again, according to the Associated Press Sen. Barack Obama intends to raise income taxes on families making over $250,000 and individuals making over $200,000.
He has promised to raise corporate taxes and provide $80 billion in tax breaks mainly for poor workers and elderly as well as triple the Earned Income Tax Credit for minimum-wage workers and allow higher credit for larger families. He will also eliminate tax-filing requirement for older workers making under $50,000.
If Obama wins the White House how will it impact you? The Nonpartisan Tax Policy Center estimates a tax break of $1,118 for the middle 20 percent of taxpayers -- those making $37,600 to $66,400.
Tax Reform
For insights on tax reform the traders turn to Arthur Laffer, Laffer Associates Chairman and creator of the Laffer Curve. (The Laffer curve shows the relationship between tax rates and tax revenue collected by governments. Laffer suggests that after a certain point higher taxes would cause people not to work as hard, thereby reducing tax revenue. Eventually, if tax rates reached 100% then all people would choose not to work because everything they earned would go to the government.)
"If we could reform tax policy I’d like to see a low rate flat tax, Laffer says on Fast Money. “Get rid of all federal tax and have a flat tax on business sales and another on personal income,” he says. That’s the fairest way to do it.
But don’t expect this kind of change any time soon. Laffer tells us most politicians aren’t too keen on his idea.
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Trader disclosure: On Nov.3, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (C), (BTU), (GS), (INTC), (MSFT), (NUE); Macke Owns (UUP), (SDS), (MSFT), (WMT); Macke Is Short (TM)
Finerman's Firm Owns (MSFT); Finerman's Firm Owns (OIH) Puts; Finerman's Firm Is Short (USO), (IYR), (IJR), (IWM), (MDY), (USO), (SPY); Seymour Owns (AAPL), (EEM), (F); Terranova Owns (VLO), (AAPL), (EXM), (FCX), (FTO), (POT), (X), (NOV)
Terranova Is Chief Alternatives Strategist Of Virtus Investment Partners, Ltd.; Virtus Diversifier PHOLIO Owns (IGE), (DBC), (DBV)
Terranova Is Co-Portfolio Manager Of The Virtus Diversifier PHOLIO; Virtus Investment Partners Owns More Than 1% Of (ABD), (ARE), (BIG), (CLB), (DLR), (EPR), (EXR), (MAC), (SLB), (SKT), (UA), (IGE), (DBC), (DBV),Virtus Investment Partners Owns More Than 1% Of Seagate Tax Refund Rights, Virtus Investment Partners Owns More Than 1% Of Shares Of Essex Property Trust Inc., Virtus Investment Partners Owns More Than 1% Of Shares Of Corporate Office Properties Trust SBI MD
Data is a real-time snapshot *Data is delayed at least 15 minutes