Democratic primary voters now have a clear choice: subsidized taxes to provide healthcare for all Americans versus lower taxes on the middle class. Barack Obama's promise this week to deliver up to $85 billion in annual tax relief for middle-class Americans is the type of plan that has the potential to stop the so-called unstoppable Hillary Clinton.
The gut of Obama's plan is to offer a $1,000 annual tax credit for middle-class American families with two earners. This, he says, would cut taxes for 150 million Americans, or roughly half the population.
Then he would grant a mortgage credit of 10 percent or a cut in taxes of roughly $500 annually for homeowners earning up to $50,000 per year. Third, he would eliminate income taxes on retirees making less than $50,000 per year. Finally, he would cut the paperwork burdens associated with filing tax returns (in some instances).
Obama says the driving forces behind the plan are to redress the country's "widening economic inequalities" and to assist victims of the sub-prime mortgage crisis. He plans to pay for these cuts by closing offshore corporate tax havens, eliminating tax loopholes, and raising the capital gains tax from the current 15 percent to as much as 28 percent.
Clinton, on the other hand, took her big gamble this week by revisiting the issue of healthcare, which she so famously bungled when her husband was president. She envisions a $110 billion care system, a revamped media-dubbed HillaryCare package that would cover 47 million uninsured Americans without needing a middle-class tax hike or new bureaucracy or burdening small-business owners.
The gist of her plan, if implemented, would be to require everyone to enroll in their choice of publicly financed or private insurance plans, dependent on their income and set up so that patients would never lose "affordable" coverage even if they lost their jobs.
Up next: the choice—tax cuts or healthcare?