This page outlines the updates made to the model to address issues and adjust for changes to candidates’ policies.
- 10/21/08 - Changed model to reflect recent announcement by McCain campaign that in their plan in 2009, distributions of $50,000 or less from pensions or IRAs will be taxed at no more than 10% for taxpayers older than 60 years of age at the start of the year.
- 10/17/08 - Changed model to reflect recent announcement by McCain campaign that in their plan, the long-term capital gains tax rate would be reduced from 15% to 7.5% in 2009 and 2010. Also changed the model to reflect the max capital losses under McCain’s plan would increase from $3,000 to $15,000 in 2009 for single, MFJ, and HoH, and from $1,500 to $7,500 for MFS.
- 10/15/08 - Changed the model to include an input field for unemployment benefits, and then, per recent Obama campaign anouncement, removed unemployment benefits from AGI in 2009. In all other years, unemployment benefits are included in AGI.
- 10/13/08 - Obama’s capital gains tax rate (for long term capital gains and qualified dividends) should increase from 15% to 20% for taxpayers with AGI exceeding $250,000 for MFJ and $200,000 for other filing statuses. The logic for this was previously taking a different approach: evaluating Taxable Income to determine if the taxpayer fell into one of the top two brackets. With this release it has been changed to determine if AGI exceeds the thresholds. Also in this release, the instructions for Tax exempt interest income were revised to refer to line 8b in the 1040, rather than 9b.
- 10/06/08 - Adjusted the model to reflect the 2008 AMT adjustments included in the bailout bill passed last week. Specifically, the 2008 AMT exemptions for McCain and Obama have been changed to $69,950 for MFJ, $46,200 for single and HoH, and $34,975 for MFS, and future years for both are indexed at a rate of 3%. The same 2008 exemption figures are there for Current, however, for 2009 - 2012, the exemptions fall back to the level in the current law.
- 09/30/08 - Obama’s capital gains tax rate (for long term capital gains and qualified dividends) should increase from 15% to 20% for taxpayers in the top two brackets. The logic for this was previously evaluating Ordinary Taxable Income, excluding long-term capital gains and qualified dividends, to determine the taxpayer’s bracket. With this release it has been changed to refer to Taxable Income, which includes long-term capital gains and quanlified dividends.
- 09/29/08 - It turns out that the Hope credit only applies to the first two years of post secondary education, therefore we have revised the model to apply the credit only in the first year rather than in all four years. This approach is consistent with the approach taken for the American Opportunity credit.
- 09/27/08 - for both candidates, changed preferred cap gains tax rates to be 0% and 15% respectively for preferred and normal, except for Obama in top two tax brackets, when normal rate goes to 20%.
- 09/25/08 - fixed model so that capital losses remain an offset to ordinary income, and do not flow into the capital gains tax section of the model. This means that capital losses, capped at $3,000 per year, will be netted out against ordinary income for purposes of the ordinary income tax calculation.
