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Perspectives on Economy

By Derrick Carpenter

Al Gore and George W. Bush, two of the presidential candidates this year, have many plans and ideas for improving the national economy through tax breaks and social programs. Although representatives of often conflicting political parties, they share opinions on an array of issues. The key differences in their platforms deal primarily with the effects on the lower and middle class families versus those with high incomes.

Both candidates assume a ten-year, on-budget surplus in the trillions. Gore predicts a $3.045 trillion surplus based on estimates of the Office of Management and Budget while Bush follows the January 2000 estimate by the Congressional Budget Office of $4.115 trillion. Both support raising the threshold for the phase-out of child tax credit to $200,000 for all from the current $110,000 for married couples and $75,000 for single parents. Bush and Gore both believe in reducing the marriage penalty by re-instating the ten percent deduction for families with two earners, allowing up to an additional $3,000 deduction. Each stands behind the initiative to extend deductions for charitable contributions to taxpayers who do not itemize and the permanent extension of the Research and Development tax credit, which is currently scheduled to expire in 2004.

Furthermore, Gore supports setting aside $2.169 trillion for Social Security from 2001-2010, along with spending $64 billion to reduce the federal deficit. He also advocates spending $432 billion to improve the current Medicare program, which would include primarily prescription drug benefits. The Vice President supports the present child tax credit of $500, but desires an increase to the Earned Income Credit earnings threshold and marriage penalty relief by doubling the standard deduction for joint filers. In addition, he would like to create Universal Savings Accounts to help low- and middle-income families save for retirement, specifically those without the opportunity to access IRAs or 401Ks. Gore also favors the installation of a 401(j) Life-Long Learning Account which would allow families and employers to contribute up to $2,500 a year for any educational or qualified life-long learning expenses.

On the other hand, Bush favors $2.282 trillion to be set aside for the 9-year Social Security program, while supporting using the projected federal surplus for a 5-year, $460 billion tax cut, including the simplification of income tax rates. He promises to spend $1.3 trillion on tax cuts over a 10-year period. The Texas Governor calls for an increase in the child tax cut to $1,000 and the elimination of the estate tax by the year 2009. Moreover, Bush maintains raising the cap on corporate spending and also pledges to veto any bill concerning an increase in income taxes.