 "Photo: MCT Campus")
The current state of the economy is undoubtedly a central issue in the upcoming presidential election. Nov. 4 is right around the corner and it marks the 56th quadrennial presidential election, which means it's time to get our hands dirty and diligently educate ourselves on the candidates.
But before diving into the differentiating policies of each candidate, it's necessary to explain the current economic playing field.
For months, the word "recession" has been looming over us like a headache that won't go away. The National Bureau of Economic Research defines a recession as a significant decline in economic activity spread across the economy, lasting more than a few months. For me the facts are clear: sinking housing prices, months of job losses, turmoil in the financial market and oil reaching a record high of $4.114 a gallon on July 17 - what else needs to happen?
With the sputtering economy in mind, it's prudent to choose the candidate that best tailors to your individual needs and wants. Choosing Sen. John McCain or Sen. Barack Obama is the essential question, but for many, it's a question of dollars and cents. McCain Under McCain's tax policy, everyone would see lower tax rates, but the largest relief would be predominately tailored toward higher income tax payers. Looking closer, McCain said he would double the current individual tax deduction, now at $3,500, lower corporate tax rates from 35 to 25 percent and significantly reduce the alternative minimum tax.
For those expecting to claim some inheritance, be mindful of the radical difference. McCain would set the maximum estate tax at a rate of 15 percent for estates valued more than $5 million, and Obama would set the maximum rate at 45 percent for estates valued more than $3.5 million. The Tax Policy Center found McCain's plan would cost the U.S. Treasury $3.7 to $4.1 trillion in tax revenue during a 10- year span compared to Obama's plan with a cost of $2.7 trillion.
Obama Under Obama, the coin is flipped. High-income taxpayers would pay more in taxes, while everyone else's tax bill would be reduced. Simply put, those who benefit the most, in taxes as a percentage of income, are blue-collar low-income workers.
Obama's plan would repeal Bush's tax cuts for the wealthiest 1 percent of America, allocate an up to $500 worker tax credit and establish a universal mortgage credit of 10 percent or non-itemizers.
Furthermore, Obama's plan would eliminate income tax for seniors making less than $50,000 and mandate automatic 401Ks and automatic IRAs.
Despite many sweeping differences in tax policies, the candidates' interests align on the most prudent issues facing our demographic today: money.
Why should students care? Both McCain and Obama endorse the idea of providing more money for starving college students. Both support the Bush administration's efforts on recapitalizing the student loan program, which has not surprisingly been devastated by the credit crisis.
Obama's plan would introduce a tax credit for the first $4,000 of college education. However, all great things come with a catch. To receive a $4,000 tax benefit, Obama would like 100 hours of community service a year. This plan would cost an estimated $10 billion a year.
McCain plans on making college affordable by supporting a large increase in Pell Grants, which Congress approved for needy students in 2007. McCain also is a firm advocate of low-interest loans for middle-class families who are struggling to keep up with college tuition increases.
Whether your decision for each candidate comes down to taxes or economic, fiscal, foreign or domestic policies, it's simply a choice between Democrat or Republican. Please remember to vote on Nov. 4 and let America's future voices be heard.
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