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I just had the pleasure of sitting down with Ryan and Jenny Micke, and hearing about some of the challenges that they're facing in these tough economic times. We're going to continue our dialogue in a few moments, but I want to start by talking a little bit about my plan to provide meaningful tax relief for working people.
Americans work longer and harder than the people of any other wealthy nation. We've built the largest economy that the world has ever known, and the biggest middle class in history. But for the last eight years, we've failed to keep the fundamental promise that if you work hard you can live your own version of the American dream. Instead, folks are working harder for less. The cost of everything from gas, to groceries to tuition is skyrocketing. It's harder to save, and harder to retire. At kitchen tables like Ryan and Jenny's, it's easy to feel like that dream of opportunity that should be the right of all Americans is slipping away.
This troubling story is written into communities across the country. It's the story of empty factories shut down forever because the jobs were shipped overseas and nothing took their place. It's the story of a mother who can't afford health care for her sick child; a father who lost his job and can't afford a tank of gas to look for another; a child facing a future where they'll have to pay off hundreds of billions of dollars in debt to pay for George Bush's tax cuts. And I am running for President of the United States of America because the story of this downturn starts in Washington, and Washington has to change.
These difficult times are not an accident of history - they are a consequence of a tired and misguided economic philosophy in Washington. It's a philosophy that values wealth but not the work that creates it. That's how we've ended up with tax loopholes that allow companies to stash profits and ship jobs overseas. That's why we have seen tax cut after tax cut for the wealthiest Americans who don't need them and didn't ask for them. And that's why we're burdened with a tax code that's too complicated for ordinary folks to understand, but just complicated enough for Washington lobbyists who know how to work the system.
This philosophy is supported by an old brand of politics that uses understandable anti-tax sentiment to shift the tax burden on to working people. Meanwhile, the gaps in wealth grow wider and the costs to the middle class are greater. CEOs make more in a day than their employees make in a year. Our economy suffers through cycles of bubble and bust when the pain on Main Street trickles up to Wall Street. Even before our current crisis, we went through the first sustained period of growth since World War II that saw median incomes go down.
So there will be a very clear choice in this election. John McCain will dust off the old political playbook that George Bush used in the last two elections, and the disastrous tax policies that have failed the American people. I am running to lead this country in a new direction.
We both favor tax cuts. The difference is that Senator McCain wants to continue a Bush tax code that rewards wealth; I want to reform our tax code so that it rewards work. That's why the typical middle-class family will get three times more from my tax cut than the one John McCain has proposed, while nearly a quarter of his tax cuts go to households making over $2.8 million every year. That's right - $2.8 million. That's where John McCain wants to focus his tax relief in this struggling economy.
And Senator McCain once knew better. He said that he couldn't vote for the Bush tax cuts in good conscience because they were too skewed to the wealthiest Americans, but now he wants to make those same tax cuts permanent. Later, he said it was irresponsible to cut taxes during a time of war because we couldn't afford them, but now he'd continue running up hundreds of billions of dollars in debt while spending billions of dollars a day in Iraq. There's nothing conservative about that.
You know, I often say that John McCain is running to serve out George Bush's third term, but when it comes to taxes that's not being fair to George Bush. Because the fact is, Senator McCain is now calling for a new round of tax giveaways that are twice as expensive as the original Bush plan and nearly twice as regressive, and he has no concrete plan to pay for it. He'd spend nearly $2 trillion over a decade in tax breaks for corporations, including $1.2 billion for Exxon Mobil. Think about that. While you're paying four dollars at the pump and your children's future is being mortgaged under a mountain of debt, Senator McCain wants to give billions of dollars in tax breaks to Big Oil, and opposes a windfall profits tax on oil companies like Exxon to help families struggling with high energy costs.
I think that's exactly what we need to change in Washington. We can't keep driving a wider and wider gap between the few who are rich and the rest who struggle to keep pace. We can't keep pursuing policies that favor Wall Street over Main Street, because that approach ends up hurting both. It's time to turn the page. I will stop giving tax breaks to companies that ship jobs overseas, and put a tax cut into the pockets of working people, and struggling homeowners, and seniors. And we'll simplify our tax code so that folks don't have to work the system to get a fair deal.
First, we will provide real tax relief for the middle class by cutting taxes for 150 million Americans. We'll reward work through a "Making Work Pay" tax credit of $500 for American workers - and $1,000 for working families like Ryan and Jenny's - to offset the payroll tax that you're already paying. This will give the middle class a break with rising costs while giving our economy a boost. And because this credit would be greater than their income tax bill, this would eliminate income taxes for 10 million Americans.
The second part of my plan eases the burden on struggling homeowners through a universal homeowner's tax credit. This will immediately benefit 10 million homeowners who don't itemize - including Ryan and Jenny - who will get a break of 10 percent off their mortgage interest rate. For most middle class families, this will add about $500 each year. And this credit will extend a hand to many of the millions of families stuck in the subprime crisis by giving them some breathing room to refinance or sell their homes.
The third thing I'll do as President is keep our promise with America's seniors. Since the New Deal, we've had a basic understanding in this country. If you work hard and pay into the system, you've earned the right to a secure retirement. But even though seniors have held up their end of the bargain, many struggle to keep pace with costs, which can become a worry for an entire family. So I'll eliminate income taxes for all seniors making less than $50,000. This will eliminate income taxes for 7 million Americans, at a savings rate of roughly $1,400 each year. Seniors in this country should retire with the dignity and security they have earned.
Finally, it's time to cut through the complexity in our tax code. Deductions and exemptions are built into the system, but ordinary people don't have the time to figure them out without paying for a tax preparer. When I'm President, we'll put in place a system where 40 million Americans with a job and a bank account who take the standard deduction can do their taxes in less than five minutes. Meanwhile, under John McCain, you could have to fill out three tax forms all using different tax rules just to pay your taxes. Under my plan, there's no more worry. No more wasted time and expense. Your pre-prepared return will come to you in the mail. This will save Americans more than $2 billion in tax preparer fees and more than 200 million hours of work.
To pay for this, we'll restore a sense of fairness. That means standing up to the special interest carve outs, closing those corporate loopholes and tax breaks, and letting the Bush tax cuts for the wealthiest Americans expire. It's time for folks like me who make over $250,000 to pay our fair share. I am not afraid to have this debate about taxes and fairness - but let's be clear about what we're debating. If you are a family making less than $250,000, my plan will not raise your taxes - not your income taxes, not your payroll taxes, not your capital gains taxes, not any of your taxes. In fact chances are you will get a tax cut, and one that is larger than what Senator McCain is proposing. It's time to grow our economy by renewing our stake in our common prosperity.
It's time to end a philosophy in Washington that tells people like Ryan and Jenny that "you're on your own," because we're all in this together as Americans. Most Americans aren't asking for a lot. They don't need overseas tax shelters or a long list of loopholes. They just want a fair shake. And they could stand a break. My tax cut is guided by the simple principle that what's good for Main Street is good for our entire economy. That's how we'll get people the relief they need, while getting our economy back on the right track.