Bob McCarty Writes

Click image to use calculator.

John McCain’s plan to cut the capital gains and dividends rate in half will grow every American’s nest egg, according to a news release I received today from the folks at Americans for Tax Reform.  In partnership with Rutledge Capitol, ATR used the same release to announce the launch of version 2.0 of the Obama-McCain 401(k) Tax Calculator.

The 2008 Election 401(k) Tax Calculator so that Americans could input the value of their nest egg and see what effect various tax policy changes had on their 401(k) value.

The four scenarios and their outcomes for a $100,000 401(k) are:

• McCain Plan: Cut the corporate rate to 25%, the capital gains and dividends rates to 7.5%, and replace depreciation with capital equipment expensing

Result of the McCain Plan: 401(k) increase = plus $46,100

• Obama Plan: Raise the capital gains and dividends rates to 20%

Result of the Obama Plan: 401(k) decrease = minus $5,700

• Hill Democrats’ Plan: Raise the capital gains rate to 28% and the dividends rate to 39.6%

Result of Hill Democrats’ Plan: 401(k) decrease = minus $18,700

• ATR Plan: Cut the capital gains and dividends rate to 0%, cut the corporate rate to 25%, and replace depreciation with capital equipment expensing

Result of ATR Plan: 401(k) increase = plus $57,600

“This election may prove to be the “401(k) Election,” said Grover Norquist, ATR president. “Obama doesn’t have a single proposal that would increase anyone’s 401(k) plan. With the market taking a bite out of people’s nest eggs, the last thing taxpayers need is a stock market-killing hike in the capital gains and dividends rate.”

To learn more about the tax calculator, click here.