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Taxing Wealth
McCain would apply a lighter hand to taxes paid by the wealthy than would Obama, who wants to make the tax code more progressive.

· Preserve the 15% tax rate on carried interest - the cut that private equity and hedge fund managers take when the funds they manage make a profit.

· Increase the amount of money exempt from the estate tax to $5 million.

· Reduce the top estate tax rate to 15% from 55% - where it otherwise will be in 2011 under current law.

· Reduce long-term capital gains rate to 7.5% for 2009 and 2010. Keep short-term capital gains and dividend tax rates where they are.

· Increase the amount of capital losses which can be used in tax years 2008 and 2009 to offset ordinary income from $3,000 to $15,000.

"Sharply raising taxes on investment is a step in the wrong direction for the competitiveness of U.S. capital markets." -- McCain*
· Tax carried interest as ordinary income rather than as an investment gain, thereby subjecting it to much higher tax rates than 15%.

· Freeze the exemption amount of estates free from the estate tax at $3.5 million -- where it will be in 2009.

· Freeze top estate tax rate at 45%.

· Raise capital gains and dividend tax rates to 20% from 15% for couples making more than $250,000 and singles making more than $200,000.

"We've lost the balance between work and wealth. I will close the carried interest loophole, and adjust the top dividends and capital gains rate..." -- Obama**




NEXT: Fighting Foreclosure
Last updated October 29 2008: 12:15 PM ET
Source:
*July 23, 2007, Speech, Benton Harbor, Mich.
**Sept. 18, 2007, Speech, Washington, D.C.
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