% of GDP taxed under either candidate.

[Bovril]

I've seen alot of talk on this forum about Obama favouring 'big government' and 'redistribution'. What I haven't seen anywhere are projections of how each candidate would change the level of taxation and govenment expenditure as a proportion of GDP (if at all). If anyone has any independent assesments of this, I think they would greatly improve the quality of discussion in other threads.

[Sphere]

I remember a good graph showing that the %GDP spent by the US government has basically been stable since WWII, no matter what party is in office.

[craziii]

bovril, just google usa national debt, you will find plenty of graphs. don't trust one source, try to read as many as you can then make your call. also, the post above mine is totally wrong.

[Sphere]

Since about 1950 spending has been between 30-35% of GDP. There has been a somewhat steady trend upwards for maybe a total of ~10%, but it wasn't instituted by any one administration.

[Bovril]

I'm not so interested in spending and taxation historically (well, not in this thread), but predictions for how each candidate's proposals will change these things from their current levels. I realise this may be hard to do (particularly predicting spending), but some idea would be very useful. I realise that spending and taxation aren't likely to change much, but even having this confirmed would be important.

[Sphere]

Well, both say they are going to cut spending (but in the most vague terms possible) and cut taxes. Obama wants to repeal the Bush tax cuts, which he probably would. Both have healthcare plans that are not going to happen. A re-working of the entitlement programs is more likely, but those are costs/expenses that won't happen for 20-30 years.

In all it's a wash. I would guess Obama might spend more by about .5% GDP, as I think McCain would curtail the Defense Budget more than his predicessor, but its really hard to tell. 90%+ of the campaign platform never comes to fruition. GWB is the perfect example, he promised small government, fiscal responsibility etc. yet he completely reversed the downward spending trend that had been going on since Regan left office.

"Fight Big Government" has been a political ralling cry for decades, but it has never effected actual governance.

[Big War Bird]

This may be of some use to you.

One of Barack Obama's most potent campaign claims is that he'll cut taxes for no less than 95% of "working families." He's even promising to cut taxes enough that the government's tax share of GDP will be no more than 18.2% -- which is lower than it is today.

It's a clever pitch, because it lets him pose as a middle-class tax cutter while disguising that he's also proposing one of the largest tax increases ever on the other 5%. But how does he conjure this miracle, especially since more than a third of all Americans already pay no income taxes at all? There are several sleights of hand, but the most creative is to redefine the meaning of "tax cut."

For the Obama Democrats, a tax cut is no longer letting you keep more of what you earn. In their lexicon, a tax cut includes tens of billions of dollars in government handouts that are disguised by the phrase "tax credit." Mr. Obama is proposing to create or expand no fewer than seven such credits for individuals:

- A $500 tax credit ($1,000 a couple) to "make work pay" that phases out at income of $75,000 for individuals and $150,000 per couple.

- A $4,000 tax credit for college tuition.

- A 10% mortgage interest tax credit (on top of the existing mortgage interest deduction and other housing subsidies).

- A "savings" tax credit of 50% up to $1,000.

- An expansion of the earned-income tax credit that would allow single workers to receive as much as $555 a year, up from $175 now, and give these workers up to $1,110 if they are paying child support.

- A child care credit of 50% up to $6,000 of expenses a year.

- A "clean car" tax credit of up to $7,000 on the purchase of certain vehicles.

Here's the political catch. All but the clean car credit would be "refundable," which is Washington-speak for the fact that you can receive these checks even if you have no income-tax liability. In other words, they are an income transfer -- a federal check -- from taxpayers to nontaxpayers. Once upon a time we called this "welfare," or in George McGovern's 1972 campaign a "Demogrant." Mr. Obama's genius is to call it a tax cut.

The Tax Foundation estimates that under the Obama plan 63 million Americans, or 44% of all tax filers, would have no income tax liability and most of those would get a check from the IRS each year. The Heritage Foundation's Center for Data Analysis estimates that by 2011, under the Obama plan, an additional 10 million filers would pay zero taxes while cashing checks from the IRS.

The total annual expenditures on refundable "tax credits" would rise over the next 10 years by $647 billion to $1.054 trillion, according to the Tax Policy Center. This means that the tax-credit welfare state would soon cost four times actual cash welfare. By redefining such income payments as "tax credits," the Obama campaign also redefines them away as a tax share of GDP. Presto, the federal tax burden looks much smaller than it really is.

The political left defends "refundability" on grounds that these payments help to offset the payroll tax. And that was at least plausible when the only major refundable credit was the earned-income tax credit. Taken together, however, these tax credit payments would exceed payroll levies for most low-income workers.

It is also true that John McCain proposes a refundable tax credit -- his $5,000 to help individuals buy health insurance. We've written before that we prefer a tax deduction for individual health care, rather than a credit. But the big difference with Mr. Obama is that Mr. McCain's proposal replaces the tax subsidy for employer-sponsored health insurance that individuals don't now receive if they buy on their own. It merely changes the nature of the tax subsidy; it doesn't create a new one.

There's another catch: Because Mr. Obama's tax credits are phased out as incomes rise, they impose a huge "marginal" tax rate increase on low-income workers. The marginal tax rate refers to the rate on the next dollar of income earned. As the nearby chart illustrates, the marginal rate for millions of low- and middle-income workers would spike as they earn more income.

Some families with an income of $40,000 could lose up to 40 cents in vanishing credits for every additional dollar earned from working overtime or taking a new job. As public policy, this is contradictory. The tax credits are sold in the name of "making work pay," but in practice they can be a disincentive to working harder, especially if you're a lower-income couple getting raises of $1,000 or $2,000 a year. One mystery -- among many -- of the McCain campaign is why it has allowed Mr. Obama's 95% illusion to go unanswered.

[Bovril]

While that's interesting, it doesn't really answer the question. Does nobody actually have any info. about this? Does this mean that there's a hell of a lot of people on this board talking uniformed nonsense about 'big government' and 'socialism'? Come on people. You can do better than this.

[Nietzsche]

While that's interesting, it doesn't really answer the question. Does nobody actually have any info. about this? Does this mean that there's a hell of a lot of people on this board talking uniformed nonsense about 'big government' and 'socialism'? Come on people. You can do better than this.

Read BWB's post again. It clearly shows the redistribution you are asking about. Read Obama's own campaign page and note the ~$300B in new spending he is proposing. Add it up. It's pretty clear.

I'll give this to Obama. He's clever. He's managed to lie his way into the White House under a bunch of illusionary promises and political doublespeak while looking like a hero on a charger. If we are really lucky, some of us may still have our homes when he's done in 4 years.

I note with great sadness the level of government spending as a % of the GDP. It makes you think just how wealthy this nation would be if the damn government could just keep it's filthy hands out of our pockets while taking bribes from every corporate hat that walks into the room. It's disgusting and makes me wonder if we don't deserve an economic collapse.

[The King Of Peasants]

Well during campaigns they generally just make promises and don't show their actual plans until in office. Bwb that is most likely just another promise for voters who would like more money in their pockets. At least on here much discussion is just speculation based on campaign promises.

[Erik]

Well during campaigns they generally just make promises and don't show their actual plans until in office.

That's very true.

It really doesn't matter what the candidates tax proposal looks like, it's all just empty campaign rhetoric.

Although McCain will probably increase the deficit, to keep taxes low.

[Viking Prince]

That's very true.

It really doesn't matter what the candidates tax proposal looks like, it's all just empty campaign rhetoric.

Although McCain will probably increase the deficit, to keep taxes low.

What would happen is a McCain Presideny is that he would push to make the current tax structure in place and not expire. A Democrat controlled Congress goes along, but they are not willing to cut back spending. McCain then goes along with the spending and does not veto.

I just wish that some politicians could show some backbone and completely kill programs before starting up new pet projects.

[Big War Bird]

That's very true.

It really doesn't matter what the candidates tax proposal looks like, it's all just empty campaign rhetoric.

Although McCain will probably increase the deficit, to keep taxes low.

McCain's wouln't matter at any rate, he would have a cooperative Congress to get anything changed. Obama on the other hand will have a Congres seager to pass his agenda.

[Viking Prince]

@Bwd -- good to bring back the WSJ piece -- this clearly shows that the Obama proposal will increase the marginal rates on nearly all taxpayers and dispells the 95% tax cut garbage. If you are paying federal income tax now -- you will be paying more under Sen. Obama's plan. Only way to get around this is to comply with the social enginnering and get tax credits for what the goverment wats you to spend your money on -- such as the Chevy Volt.