Tax Lawyer's Blog

On June 20th, the Tax Policy Center issued a report titled, A Preliminary Analysis of the 2008 Presidential Candidate’s Tax Plans in which it found that Barack Obama’s tax plan, if enacted, would cause the U.S. deficit to balloon.

Lori Montgomery of the Washington Post reported yesterday in an article titled Obama Tax Plan Would Balloon Deficit, Analysis Finds that,

On the campaign trail, Sen. Barack Obama bashes President Bush for “reckless” economic policies that are “mortgaging our children’s future on a mountain of debt.” But the Democratic presidential candidate has adopted a key component of Bush’s fiscal policy: A novel bookkeeping method that guarantees that the $9.5 trillion national debt will get much bigger.

Obama says he wants to cut taxes for the middle class. This means he would have to keep, or make permanent, some of the tax cuts of the Bush administration and if he did that there would not be enough money to pay for the new programs he supports.

[U]nder current law, all the tax cuts expire and the deficit disappears completely. Democrats in Congress have vowed to preserve the Bush tax cuts only if they can cover the cost and keep the budget in balance. Measured against current law and against the promises of his fellow Democrats, Obama would rack up huge deficits. According to a recent analysis by the nonpartisan Tax Policy Center, Obama’s tax plan would add $3.4 trillion to the national debt, including interest, by 2018.

Given that Obama’s central negative campaign attack is that a McCain presidency would be a Bush third term, this fact could come back to haunt him. 

Leonard E. Burman, co-director of the Tax Policy Center said,

Obama has criticized Bush for his fiscal irresponsibility, and now he’s using Bush’s baseline as a yardstick by which to measure fiscal responsibility.

TaxProf, Paul Caron, blogged on the Tax Policy Center’s study in June but it seems he missed the part about Obama’s tax plan increasing the deficit.

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