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I'm not a big fan of newspaper editorials, and I'm not usually a big fan of "cut and paste" bLog posts. That being said, today's Rocky had a pretty good article today that discusses which candidate would actually be best for the workers.

Who's best for workers?

A Labor Day analysis of the two candidates' positions

Rocky Mountain News

Monday, September 1, 2008

A presidential election is just two months away. So this Labor Day weekend, rather than reflect on the state of the work force, let's instead consider how working people are likely to fare under several of the policies of the two nominees, Barack Obama and John McCain.

The very concept of "working people" is fairly slippery, of course. Politicians who use the term clearly mean to exclude some Americans who do in fact work long hours but who earn too much money, in politicians' eyes, to qualify for consideration. So we'll define working people as those whose household income is at or below $75,000 (the median household income, reported last week by the Census Bureau, is $50,233 a year).

* Income taxes. Both candidates promise tax cuts, with Obama claiming Thursday that his would benefit 95 percent of "all working families." Moreover, McCain would make the Bush tax cuts permanent and double the dependent child credit from $3,500 to $7,000.

Obama has not been clear about whether he would let all the Bush tax cuts expire at the end of 2010 - if so, marginal rates would rise for everyone who files a 1040. He would, however, give a $500- per-worker tax credit for every household earning less than $150,000 and provide families a $4,000 credit for each college student.

Advantage: Obama for unmarried heads of household and (slightly) families with kids in college; McCain for everyone else - and a big edge to McCain should Obama let all the Bush tax cuts expire.

* Energy. Both candidates back a cap-and-trade proposal on greenhouse gases that would amount to a massive tax increase on fossil fuels, particularly coal. Consumers will pay higher energy bills.

Obama has promised a one-time, $1,000 energy "rebate" per household "for working families" that would be paid for with a windfall profits tax on oil companies. If the experience of the early 1980s is any guide, the tax would depress domestic energy production, boosting prices to everyone long after the rebate checks had been spent.

In McCain's favor, he opposes ethanol subsidies and mandates, which have caused corn prices to rise. Obama backs them.

Advantage: McCain.

* Health care. Obama would build on the current mix of employment-based health insurance and government programs. He would cover more of the uninsured by forcing big employers to insure all workers and expanding government subsidies. In the view of some prominent health-care economists, this plan could push companies to lay off low-wage workers, or at least not hire as many. That's no bargain. Whether it would save money for workers who are already insured is another matter. Obama is predicting a large reduction in annual premiums, but that seems extremely unlikely.

McCain, by contrast, would end the tax benefits for employer-provided health insurance and give individuals income-tax credits to buy coverage. He would also let people shop nationwide for insurance and let nonemployer membership groups like AARP and unions sell group policies. McCain's plan would end a major tax distortion that has boosted medical costs. But we need a lot more details.

Advantage: Unsure. Perhaps Obama, if he is correct about a reduction in premiums - a very big if. The more likely advantage is to McCain.

* Jobs. For most workers, the basic questions are: If you have a job, can you keep it? If you're looking for work, can you find it?

McCain's proposals would encourage growth and job creation; Obama's might in some cases - he said Thursday night, for example, that he'd eliminate the capital gains tax on startup companies, however he defines them. But some of his other proposals reduce incentives for capital formation and investment. For example, he favors a higher capital gains tax in most cases as well as higher taxes on dividends - meaning higher taxes on investment at a time when entrepreneurs (who provide jobs) need a boost.

The Democratic candidate repeatedly says he would create 5 million "green collar" jobs - but he means through subsidies. Those would not be 5 million net new jobs.

McCain would cut the U.S. corporate income tax rate from 35 percent to 25 percent, which is closer to the international norm. He also backs cuts in taxes on capital gains and dividends.

Advantage: McCain (clearly).

No president operates in a policy vacuum. Congress always has the prerogative to adopt, amend or reject a president's agenda.

Some would argue, for that matter, that Obama's promise to "end tax breaks for corporations that ship jobs overseas" would also help working families, but it's unclear how he intends to do this. Moreover, companies that invest abroad often end up expanding their operations here, contrary to the popular stereotype. In addition, one reason that U.S. companies invest abroad is because of the lower corporate tax rates they often find there. If Obama wants to keep more jobs in America he should follow McCain's lead and endorse a lower domestic rate, too.

GJFlash's Blog

Advantage : McCain

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