NAILBA Issue Briefing February 6, 2008 Super Tuesday Update At the beginning of the year, many of the pundits predicted we would know the Presidential nominees of both parties after the Super Tuesday Primaries. While it appears Arizona Senator John McCain, (RAZ) has all but locked the GOP nomination; the Democratic Primary continues to get more interesting. At press time, Senator Barack Obama (D-IL), appeared to win more Delegates on Super Tuesday then his rival, Senator Hillary Clinton (D-NY). Currently, this race is too close to call and it appears the race will go all the way to the Democratic Convention in Denver. Senator Clinton started with a large lead but it appears Senator Obama is surging and experts believe the longer this race goes, the more likely it is that Senator Obama will be the Democrat Nominee for President. Below is NAILBA’s most recent compilation of where the candidates stand on the issues of importance to our member agencies and their agents. SENATOR JOHN MCCAIN Taxes: Senator McCain’s position on taxes appears to have shifted since the start of the Presidential Campaign. A fierce budget hawk, Senator McCain was the only GOP Presidential Nominee to vote against the 2001 Bush Tax Cuts. At the time of the vote, Senator McCain cited the fact that we were not off-setting any of these tax cuts and they would lead to budget deficits for future generations. Recently on the campaign, Senator McCain has stressed his support to extend the Bush Tax Cuts. However, it’s unclear if these would be subject to Pay-Go and would need to be offset. If so, inside build-up and other issues of importance to the life insurance industry could be in jeopardy. Below are additional tax themes that Senator McCain has supported on the campaign trail. AMT: Senator McCain favors a permanent repeal of the Alternative Minimum Tax (AMT). Under his plan, a middle class family set to pay the AMT will save an average of over $2,700. His repeal plan would cost $60 billion per year. Estate Tax: Senator McCain voted to permanently repeal the Estate Tax. Extend the Bush Tax Cuts: Senator McCain has pledged to make the Bush income and investment tax cuts permanent, keeping income tax rates at their current level and fighting any efforts for a tax increase in 2011. To clarify, he voted against the original tax cuts in 2001. Make It Harder to Raise Taxes: Senator McCain has proposed to require a 3/5 majority vote in Congress to raise taxes. Capital Gains and Dividend: Senator McCain has proposed to keep the current rates on dividends and capital gains. Social Security Reform: Senator McCain supports supplementing the current Social Security system with personal accounts.
Health Care Reform: Senator McCain has not supported government run healthcare but has stressed reform is needed through market competition. SENATOR BARACK OBAMA Taxes: Senator Obama does not support extending the Bush Tax Cuts. Senator Obama has proposed between $80-85 billion in tax relief that is focused on workers, seniors and homeowners that would be funded by an increase on wealthier investors. Specifically, Senator Obama’s plan would: • Eliminate Income Taxes on Certain Seniors: Senator Obama would eliminate taxes on seniors making less than $50,000 annually. It is estimated that 22 million elderly Americans would no longer need to file an income tax return. Additionally, another 7 million seniors would see taxes cut on average an additional $1,400. Reverse Bush Tax Cuts for the Wealthy: Senator Obama has proposed to protect tax cuts for poor and middle class families, but he will reverse most of the Bush tax cuts for the wealthiest taxpayers. Close Special Interest Corporate Loopholes: Senator Obama will level the playing field for all businesses by eliminating loopholes and deductions, such as those for the oil and gas industry. Increase Taxes on Capital Gains and Dividends: Senator Obama has proposed to raise taxes on capital gains and dividends from the current rates.
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AMT: Senator Obama has stressed the need to reform AMT but we have not seen any specifics on a proposal. Estate Tax: Senator Obama voted against permanent repeal of the Estate Tax. He also voted against raising the estate tax exemption to $5 million and against permanence of the extension of the Estate Tax cuts. Social Security Reform: Senator Obama supports increasing the maximum amount of earnings covered by Social Security from $97,500 and has talked about keeping the exemption for up to around $200,000. He was not specific about what else he would propose on long-term solvency but the Senator does not support private accounts. Health Care Reform: Key components of Senator Obama’s proposal for health care reform: • Makes insurance mandatory, but only for children. • Wants family plans to cover kids up to age 25. • Creates a national health insurance exchange to offer a range of plans and prices to small businesses and the uninsured. His campaign estimates the cost of his plan to range from $50 billion to $65 billion-a-year. The plan would be paid for by not renewing President Bush’s tax cuts. SENATOR HILLARY CLINTON Taxes: Senator Clinton has proposed to let President Bush’s tax cuts for top earners expire and return to the income tax rates for upper-income Americans that existed in the 1990s. She would also eliminate a part of the tax code that allows companies to defer taxes on profits they earn overseas. In addition, her plan includes extending middle class tax cuts, the child tax credit and marriage penalty relief, reforming the alternative minimum tax (AMT), offering new tax cuts for healthcare, college and retirement, and expanding the earned income tax credit (EITC) and the child care tax credit.
AMT: Senator Clinton has talked on the campaign about reforming the AMT, but has lacked specifics. She mentions that there are numerous moving parts and that reforming the tax code is extremely complicated. She has talked that, as President, she wants to get to a fair and progressive tax system. Estate Tax: Though Senator Clinton has voted against making the estate tax cuts permanent, in the campaign she has talked about freezing the estate tax at the 2009 level of $7 million for a couple. Social Security Reform: Senator Clinton has talked about her plan for Social Security being based on fiscal responsibility first and would establish a bipartisan commission. Health Care Reform: Key components of Senator Clinton's proposal for health care reform: • Subsidize the cost of health insurance through a system of tax credits and payments. • Allow all Americans to buy coverage from private health plans offered by the Federal Employee Health Benefit Program. • Require insurance companies to provide affordable insurance to people regardless of their age or health. • Require everyone to buy health insurance. If you have any questions on NAILBA’s Government Affairs program, please contact Janay Rickwalder at jrickwalder@nailba.org or Alex DelPizzo at adp@wswdc.com. .