Joe exposes candidates’ sharp divisions

‘08 ISSUES

John McCain and Barack Obama have starkly different views on taxes, just ask Joe the Plumber.

The presidential candidates used Joe Wurzelbacher of Toledo, Ohio, as a prop in their final debate, sparring over how their tax plans seek to generate prosperity and benefit average, hardworking Americans.

Mr. McCain, Arizona Republican, says that stronger economic growth flows from low tax rates that unleash private savings and investment capital to expand businesses or help people like Mr. Wurzelbacher to purchase one.

He says Mr. Obama’s plan to increase taxes on those earning more than $250,000 will hurt small-business owners and is an effort to redistribute wealth.

But Mr. Obama, Illinois Democrat, says that the engine of the economy is the nation’s vast working class and that transferring some of the nation’s wealth from upper-income Americans to lower-to-middle-income workers will help lead the country out of recession.

“McCain appears to be more concerned about how higher tax rates affect overall economic growth, but Obama says the distribution of the economic pie from all his refundable tax credits for those at the bottom outweigh any adverse economic effect of higher rates,” said economist Gerald Prante at the nonpartisan Tax Foundation.

Mr. Obama would raise taxes on the wealthiest 5 percent of income earners and redistribute much of that money to lower-income Americans through refundable tax credits or checks; keep the 35 percent tax rate on corporations; and raise taxes on investors, energy companies and businesses that move parts of their operations overseas.

“Obama’s focus is on giving working families a tax break, and rolling back the upper tax levels that [President] Bush gave to the very wealthy, the net effect of which is to make the tax system more progressive,” said Roger Hickey, co-director of Campaign for America’s Future, a liberal advocacy group.

“Obviously, giving a tax cut to lower- and middle-class workers will stimulate the economy,” he said. “But his economic program is not so much driven by tax cuts as it is by investment to get the economy going for everyone.”

Eight years after the Bush tax cuts, which were applied across the board, liberals are cheering the prospect of raising the top rates on the wealthiest taxpayers to help those in the lower-income brackets who they say have been hurt by the administration’s economic policies.

Conservatives disagree, and Mr. Wurzelbacher became their representative when on Sunday he questioned Mr. Obama at a campaign rally on whether his “new tax plan is going to tax me more” if he bought the business whose income was between $250,000 and $280,000, the senator replied it would because the high tax rate was a key part of his social agenda to “spread the wealth around.”

“There is a fundamental difference between McCain and Obama on taxes. Obama wants to, in his words, ‘share the wealth’ by redistributing income, while McCain wants to create new wealth by boosting incentives for job-creating investment,” said economic policy strategist Cesar Conda, who was Vice President Dick Cheney’s chief domestic adviser.

“Both McCain and Obama promise tax cuts. But many of Obama’s ‘cuts’ are actually increased federal spending on refundable credits. By contrast, McCain offers broad-based, pro-growth cuts that will benefit every American family,” said tax analyst Chris Edwards at the Cato Institute.

Obama’s plan

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