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Obama has made a tax hike part of his campaign platform, but what about McCain? He says he will make the Bush tax cuts permanent, but can he actually do it with a hostile Congress? Greg Mankiw, of Harvard, makes use of the betting markets to come up with his answer: probably not.

P(tax hike / McCain) = 0.74.

That is, according to the Intrade betting, we are likely to see a significant hike in the top income tax rate even if McCain is elected President.

Assuming McCain wins the election, it will be interesting to see how well this holds up. If correct the near future does not look too good for those of us who would prefer lower taxes (and lower federal spending). This is hardly a surprise.

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