(Reuters) - Presidential candidates John McCain and Barack Obama this week unveiled new plans to head off a recession and help boost economic growth as government officials cope with a financial crisis that threatens economies around the world. Here is a summary of their competing plans.
Republican John McCain proposed a $52.5 billion plan that would:
--Use $300 billion of the $700 billion financial rescue package recently enacted to buy troubled mortgages and replace them with manageable fixed-rate mortgages.
--Reduce taxes on the first $50,000 of withdrawals from IRA and 401(k) retirement accounts to 10 percent for the next two years. Currently withdrawals at retirement are taxed at regular income tax rates which range from 10 percent to 35 percent.
--Suspend rules that require retirees to begin withdrawals from retirement accounts six months after they reach the age of 70. The delay would allow retirees to ride out the current market crisis and stock market decline.
--Increase the amount of capital losses from the sale of stocks and other assets that can be written off against ordinary income to $15,000 from $3,000.
--Reduce the top tax rate on long term capital gains, currently at 15 percent, to 7.5 percent for two years.
--Exempt unemployment benefits from taxes for two years.
Democrat Barack Obama proposed a $60 billion package that would:
--Give businesses a $3,000 refundable tax credit for each new full-time employee hired in the United States over the next two years.
--Allow small business to immediately write off up to $250,000 in spending for new equipment and property through the end of 2009. The stimulus package enacted earlier this year provided for the $250,000 investment expensing limit only through the end of this year.
--Eliminate capital gains taxes on investments in small businesses.
--Make $25 billion immediately available for the construction and repair of roads, bridges, schools and other infrastructure.
--Make $50 billion in loan guarantees available and keep other options open to help U.S. automobile manufacturers retool and develop a new generation of fuel efficient cars. Congress has made $25 billion available.
--Provide a permanent tax cut of $500 for most individual workers and $1,000 for families. Eliminate taxes for seniors making up to $50,000. The tax cuts would be expedited through refunds based on 2007 tax returns.
--Extend unemployment insurance for long-term jobless workers who have exhausted their benefits. Temporarily suspend taxes on those benefits.
--Temporarily allow penalty-free withdrawals of 15 percent from tax-preferred retirement accounts up to $10,000.
--Suspend rules requiring retirees to begin withdrawing from retirement accounts six months after they reach the age of 70.
--Increase home heating cost aid.
--Instruct the Secretaries of the Treasury and Housing and Urban Development (HUD) to use their existing authority to more aggressively modify the terms of mortgages.
--Reform the bankruptcy code to assist homeowners and remove legal impediments to encouraging more mortgage restructuring.
--Implement a 90 day foreclosure moratorium for homeowners making good faith efforts to pay their debt.
--Provide $25 billion to states to help them cope with the economic downturn without having to raise property taxes or cut vital services.
--Provide a 10 percent refundable tax credit for mortgage interest to taxpayers who do not itemize their returns.
Editing by Cynthia Osterman
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