President must decide who'll bear tax burden

Evolution and shifts in position
Since Obama began serving in the Senate in 2005, he has consistently voted against efforts to cut taxes on investment income and to reduce or abolish the estate tax.

During this 2008 campaign, McCain has advocated cutting income tax rates and reducing the estate tax. But in 2001 and 2003 McCain opposed the same kind of tax cuts that he now favors.

In 2001, he voted against a bill supported by President Bush that cut income tax rates and phased out the estate tax.

The 2001 bill also doubled the tax credit that parents got for each child, from $500 to $1,000.

McCain was one of only two Republican senators to vote against final passage of the 2001 bill.

In 2003, McCain voted against a bill that cut taxes on investment income and accelerated the income tax cuts that Congress had enacted in 2001. McCain was one of only three Republican senators to vote “no.”

How they have voted
Looking only at how each senator voted on tax proposals is akin to examining only half of the balance sheet. A vote for more spending could matter as much as those tax votes.

McCain voted in 2003 against the Bush administration’s new Medicare prescription drug entitlement program. This program will add at least $400 billion to the taxpayers' burden just in its first ten years, according to an estimate by the Congressional Budget Office.

In 2005, Obama voted for an energy bill which included $14.6 billion in tax breaks and credits, including $2.8 billion in incentives for fossil fuel production and $1.3 billion in incentives for alternative-fuel vehicles. McCain voted against that bill.

As former Treasury Department official Eugene Steuerle points out, such tax breaks must paid for through higher tax rates.

In 2006, McCain voted for a bill that extended lower tax rates on investment income (capital gains and dividends) through 2010. Obama voted against the bill.

In recent years the Senate has had several votes on proposals to lower or entirely get rid of the estate tax.

In 2006, the Senate voted on a procedural motion to debate a bill that would have permanently repealed the estate tax. The tally was 57-41, three votes shy of the 60 required under Senate rules. Obama voted against the effort to abolish the tax. McCain voted for it.

The Senate also voted last year on an effort to modify the estate tax by making the first $5 million of an estate free from the tax, and setting the top tax rate at no more than 35 percent, beginning in 2010. McCain voted for this idea, but Obama voted against it.

Surprises for the new president
The health of the economy will influence the tax debate.

Veteran tax lobbyist Ken Kies, the former chief of staff of the Joint Congressional Committee on Taxation, said, “If in January or February we’re in a serious recession, and a world-wide recession, most people will think that is not a good time to increase taxes on individuals,” as Obama wants to do for upper-income people.

MORE FROM BRIEFING BOOK: ISSUES '08

Briefing book: Issues '08 Section Front

Candidates debate path to education reform Candidates stances on consumer issues Science goes under political microscope How McCain, Obama will change abortion policy Candidates on gun control: Shooting for the sweet spot Iraq -- waiting to re-ignite? Overhauling health care: Two divergent visions Pakistan relations complicate al-Qaida fight Can Social Security, Medicare promises be paid for? Trade, outsourcing and tariffs top '08 concerns Briefing book: Issues '08 Section Front   Add Briefing book: Issues '08 headlines to your news reader: