I recently saw an Obama ad (who hasn’t) that cited a recommendation by the Heritage Foundation. I knew the Heritage Foundation to be a fiscally conservative organization, which also happens to be the wisest course given the last 60 years of out-of-control government spending (by both parties!) but I wanted to check for myself.

So I headed over to their site to see if they truly endorsed Obama’s tax plans over McCain’s. (All this assumes either candidate will actually do what they say. I know, I know, fool me once…)

Here’s the analysis. Here’s the conclusion. You be the judge.

The economy improves under each plan as compared to the baseline. The baseline forecast assumes that all of the Bush tax cuts disappear, which raises the cost of capital and marginal tax rates. Both candidates plan to reduce taxes com­pared to this scenario.

Senator McCain’s plan is substantially better at spurring economic growth than Senator Obama’s. This is not surprising, since Senator McCain focuses on economic growth and job creation while Senator Obama focuses on the redistribution of income. As Tax Policy Center Director Len Burman states, “the major themes of the two plans are, in the case of Senator McCain’s plan, that the major emphasis is on economic efficiency—cuts marginal tax rates, improves economic incentives…. In the case of Obama’s plan, the goal is primarily to improve pro­gressivity…to lower tax burdens on low-income people and raise them on higher-income people.”[10] Each presidential candidate achieves his stated goal,with Senator McCain generating the most new jobs, growth, and additional income for individuals. Sen­ator Obama’s plan drives up the tax rate for individ­uals with annual incomes above $250,000 and redistributes money to workers with lower incomes.