McCain and Obama tax plans could be problematic

WASHINGTON — The competing tax plans laid out by Sens. Barack Obama and John McCain would both add trillions of dollars to the national debt and could add to the tax system's complexity, a nonpartisan tax research group concluded Wednesday in a newly released report.

Both campaigns have asserted that their plans to continue many Bush-era tax cuts and offer new reductions would aid the economy without requiring massive new spending. But the Washington-based Tax Policy Center warned that under either candidate, "the debt would likely continue to rise as it has over the past eight years."

Obama's plan -- a combination of cuts targeted to middle- and low-income Americans and increases for the wealthy -- would increase the national debt by an estimated $3.4 trillion over the next decade, the center reported. Under a similar analysis, McCain's tax proposals -- largely a continuation of the Bush tax reductions -- would add $5 trillion. The national deficit now stands at $9.5 trillion.

The report estimated that under McCain's plan, middle-income Americans who make between $38,000 and $66,000 a year would see average tax cuts of as much as $1,400 in 2012. But McCain, an Arizona Republican, would aid the wealthiest 1% -- those who make more than $603,000 per year -- with annual tax reductions averaging $127,000.

Under Obama's plan, the tax center reported, middle-income taxpayers would have tax cuts averaging $2,100 in 2012. But the affluent top 1% of taxpayers would see steep increases -- $38,000 a year, on average -- under the Illinois Democrat's plan.

Leonard E. Burman, a Tax Policy Center senior fellow who was on the team of analysts that reviewed both candidates' plans, said in an interview that important portions of both Obama's and McCain's plans had yet to be fleshed out.

Both proposals are filled with "soft numbers" and sometimes play "fast and loose with their figures," Burman added.

"We had to make a lot of assumptions because there are big parts of their proposals that are still being fine-tuned," he said.

Burman also said that although both candidates' plans attempt to streamline the tax system, they create potential new complexities for taxpayers.