Voters weighing Obama, McCain tax plans

“If you’re paying more in taxes,” he says, “then you have less money to do other things, be it grow a business, buy a yacht, or ... [fund] a child’s education.”

That doesn’t mean that every top-bracket taxpayer is backing McCain.

Ted Almon, owner and chief executive of a medical-supply distribution company based in Warwick, R.I., says he leans more toward Obama than McCain, despite the prospect of a hit to his wealth in the short run.

His reasoning is that America’s interest, and his own long-run self-interest, lies in finding a middle ground on the political spectrum.

“I feel strongly that there is a balancing point somewhere between the far left, or social activists, and the far right, or fiscal conservatives, where the economy clicks at its best, which is to everyone’s benefit,” Mr. Almon says.

In recent years, a rightward tilt of economic policy has gone too far, he argues. “The middle class and working class are losing their ability to consume.”

For him, it’s a balancing act partly because he sees tough choices in all directions.

The budget demands fiscal discipline, but society also shouldn’t “be faced with dismantling the safety net,” Almon says. And if taxes went through the roof, it would squeeze out private-sector growth – “the goose that lays the golden egg.”

He echoes a tension felt by many Americans, who are leery of big tax hikes but also of big cuts in government services.

As they struggle to win voter hearts and minds, the candidates are selling their plans in connection to the immediate challenges many Americans face. A housing downturn and a historic rise in energy prices have dragged the pace of economic growth well below normal.

During the Republican National Convention last week, McCain criticized Obama for advocating higher taxes. It is true, according to the Tax Policy Center analysis, that Obama’s plan would raise $600 billion more tax revenue, over 10 years, than if the Bush tax cuts were all extended.

Still, the economy might recover before any new tax plan is enacted.

And for the long term, both candidates are seeking to appeal as politicians who can break the traditional mold – including on the looming fiscal crunch.

Whether solutions are forged by Obama, McCain, or someone else, they will require mold-breaking leadership.

The key to the fiscal challenge is healthcare (an issue that will be addressed in detail later in this series). Even assuming some slowdown in medical inflation, spending on Medicare and Medicaid appears likely to grow three times as fast as Gross Domestic Product (GDP) over the next quarter century, for example.

The aging of America’s demographic profile also puts pressure, to a lesser extent, on Social Security. And to the degree that all these expenses add to the national debt, interest payments could soar.

How big is the problem?

At present, the federal debt is not unusually large as a share of GDP.

But if current fiscal trends continue unchecked, America might see federal spending nearly double, as a share of GDP, over the next three decades, according to the nonpartisan Government Accountability Office.

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