PRESIDENTIAL ECONOMICS: Last week John McCain and Barack Obama kicked the presidential campaign into full swing by announcing their plans to deal with America's lagging economy. As expected, their economic approaches vary radically.

Their economic policies reveal their views about the role of government. McCain proposed free-market economics over big government and tax cuts that favor business and the wealthy. Obama proposed more government economic stimulus programs and higher taxes for the rich.

Obama & McCain on Taxes

The tax cuts put in place by President Bush and Congress over Bush's last two presidential terms expire in 2010. These tax cuts provided refund checks for most taxpayers, and large decreases in tax rates for the wealthiest Americans.

Obama called for these changes to current tax strategy:

• Expand current tax cuts for low- to middle-income households.
• Return income tax rates for taxpayers making more than $250,000 each year to their pre-Bush level.
• Increase capital gains tax on the wealthy.
• Increase cap on Social Security tax paid by high-income wage earners.

McCain called for these changes to current tax strategy:

• Leave the Bush tax cuts in place for low- and middle-income households.
• Cap tax rates on investments and capital gains.
• Eliminate Alternative Minimum Tax, which mostly affects wealthier taxpayers.
• Cut corporate income tax rate from 35% to 25%

Which Economic Plan is Best?

Obama Critics: He Doesn't Back His Plan up with Realistic Numbers

Critics said Obama's plan is unrealistic. They wanted to know how Obama plans to pay for his policies.

Powerful businesswoman and McCain's Victory Chair, Carly Fiorina, said, "Lay the numbers out. He [Obama] has said he will begin withdrawing troops in 90 days but will do it responsibly. It takes a long time to draw down a presence as large as we have in Iraq, so what is his estimate of savings? And over what time period? The only way his proposals can be paid for, is if he is raising even more taxes at an even higher level than he is, at this point, identifying." (Chicago Tribune, 6/15/08)

McCain Critics: He Gives Tax Breaks to Super Rich

Meanwhile, Obama's economic policy advisor Jason Furman took issue with McCain's tax plan.

"Some 23% of the tax cuts they are proposing would go to households making more than $2.8 million under the McCain plan. That's a phenomenally large benefit for the super rich, beyond anything George Bush has proposed." (Business Week, 6/12/08)

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Question for Readers:

Do you prefer Obama's economic plan or McCain's? Why?