Proposed tax plans hard to decipher for average Joe

Published 12:27 am Sunday, November 2, 2008

NATCHEZ — Whether you are Joe the plumber from Ohio or Sarah the schoolteacher from Vidalia, one election rule remains quite the same.

The current campaign is politics as usual.

Many locals have their preferred candidate and their preferred tax plan.

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Miss-Lou resident Alma Evans said she supports Obama’s tax plan because the plan calls for a tax cut to be given to the middle class.

“It sounds good to me,” Evans said. “It’s what a lot of people need right now.”

Evans said it was through online research and watching each candidate speak that she came to her decision.

Kevin Friloux supports McCain’s plan because it does just the opposite.

Friloux said raising taxes on wealthy Americans doesn’t make sense. If those with the means to hire more people can get tax breaks, they’re more likely to hire more people and thereby stimulate the economy, he said.

“It makes more sense,” Friloux said.

But neither Evans nor Friloux have all the information they need to make an informed decision, the experts say.

Marty Wiseman, director of the Mississippi State University John C. Stennis Institute of Government and a political science professor, said its impossible to break down the tax plans because they haven’t been fully revealed.

“It’s a very intricate and detailed process,” Wiseman said of making up tax laws. “And it’s all a little bit fuzzy.”

Certified public accountant Dennis Switzer of Natchez’s Silas Simmons accounting firm said trying to get an accurate idea of specific tax plans can be very confusing.

Switzer said core specifies that would give a clear picture of taxation don’t exist yet.

Switzer pointed to one aspect of Obama’s plan that lacks information and makes it impossible to determine where people would fall under his new plan.

Right now tax brackets are measured with something called the tax rate schedule.

That schedule is bracketed in a way that shows specific percents of federal tax that will come from designated income amounts.

For instance, the current schedule says a person making $78,850 to $164,550 will pay a 28 percent income tax.

The current schedule is also reflective of tax cuts put in place by President Bush.

In that schedule the highest bracket is the 35 percent bracket.

In Obama’s plan, that 35 percent bracket would be changed to 39.6 percent, as it was in 2000, to allow the low to middle class to pay less taxes.

However, Switzer said since Obama’s plan currently has no specifics that re-bracket the bottom income levels it’s not possible to know everyone that will be paying lower taxes.

While Switzer, like Wiseman, said neither candidate has divulged all the details of their plan, McCain’s is fairly simple since it involves leaving the Bush tax cuts in place and not altering the tax rate schedule.

Wiseman did say that McCain’s plan would count money that an employer contributes to an employee’s healthcare as taxable income.

But McCain would then offer a $5,000 tax credit to encourage people to purchase their own insurance.

And while both McCain and Obama will be making a final push for votes in the coming days, some say both of their tax plans could use some work.

“They’re both a little dissatisfying,” said William Shughart, an economics professor at the University of Mississippi.

Shughart said the economy would be best served by a tax cut that benefited all taxpayers, not just some.

Shughart said the current plans appear more like a way just to entice voters, not offer the best benefit.

“It seems purely reactionary at this time,” he said.