After several weeks of getting his ass handed to him on the economy, GOP presidential nominee John McCain is unveiling a new set of economic proposals today aimed at countering the devastating “failed policies” narrative that’s been advanced against him by the campaign of Democrat Barack Obama.
We wrote recently about that narrative – and McCain’s utter failure to flip the script on Obama – although we’ll be surprised if the latest iteration of the “McCain plan” will be enough to stop the bleeding.
McCain is proposing a $52.5 billion package of reforms, among them allowing old people to take money out of their IRA’s at a substantially lower tax rate, a fifty percent reduction in capital gains taxes, an “accelerated tax write-off” for losses in the stock market as well as a suspension on taxing unemployment insurance benefits for this year and 2009.
Obviously, we’re all about cutting cap gains taxes (one of the keys to the economic explosion of the 1990′s), and it certainly seems that McCain’s plans are geared at making the current economic crunch easier on a broad swath of the electorate.
Plus, the plan would deprive the government of $52.5 billion, which is always a good thing.
Having said that, the proposals amount to what Sic Willie likes to call “a whole lotta not much.”
McCain is tinkering around the edges of a fatally-flawed system by specifically targeting demographics he needs in order to close the gap Obama has opened up on him.
That’s not sound fiscal policy, it’s “too little, too late” pandering, which is precisely what all of the campaign-based economic proposals offered thusfar by McCain and Obama (i.e. “McBama”) amount to.
What neither candidate seems to recognize is that this country needs a radical overhaul of its current tax system – one that dramatically lowers the burden government currently imposes on ALL Americans and forces our government to stop doing things it should do, spending money it doesn’t have and then sticking us with the tab.
Of course, Washington politicians aren’t ever going to do that because it would mean cutting them off from the multi-trillion entitlement programs and hundreds of billions in deficit pork they’ve grown addicted to.
Just like forcing loans on people who can’t afford them (and the costly socialist bailout we’re paying for to “fix” the resulting disaster), government can’t seem to buy a clue these days.
McCain’s proposals make sense, but they do nothing to get at the heart of the issue.
We don’t need “too little, too late” tinkering, we need somebody to come in and throw out the Washington “moneychangers” and put that cash back in your pocket.
By Jack October 14, 2008 at 1:58 pm
Right on Will,
And the vehicle to do that already exists in HR 25/ S 1025, The FairTax Act. This bill completely eliminates the Income, Corporate Income, FICA, Medicade, Inheritance and Capital Gains Taxes. These taxes are replaced on a revenue neutral basis with a 23% consumption tax on all new goods and services paid once at the original sale. By relieving US manufactures of the 22% federal tax component in the price of their goods overseas, American made products are instantly more competitive world wide. Since all new goods imported for sale will be taxed at the same rate as domestic products, foreign manufacturers lose the advantage they currently enjoy for Value Added Tax rebates applied when products are shipped out of the country of origin. By removing the tax penalties on foreign earnings for American citizens and corporations, an estimated 12 Trillion dollars would be repatriated tax free and invested in our economy. As with all prior income tax reductions enacted under Presidents Kennedy, Reagan and Bush, the US economy will experience an extended period of robust growth and the creation of tens of thousands of new jobs.
Now is the time to enact Real Tax Reform, not more modifications to 67,000 pages of confusing and conflicting laws that comprises the current Tax Code!
By nope October 14, 2008 at 3:13 pm
Good lord, Jack, do you work for Senator Demint? God help us if his freakish ideas ever get any currency, although they aren’t likely to.
A 23 percent consumption tax would be really really great for lots of people. Large corporations. People whose income comes from the stock market. Comfortable retirees with no children at home and not much to purchase.
It would be disastrous for single mothers with rent to pay, clothes to buy, and mouths to feed.
I can guarantee you that my dad would not create ONE SINGLE JOB with the eleventy kabillion tax dollars he would save under a “fair tax” bill. Neither would millions of others. Wealth would accrue to the wealthy.
By rick October 14, 2008 at 4:17 pm
Viva the fair tax bill…..
By McCain - a new plan every week October 14, 2008 at 4:46 pm
first it was the dumb a## gas tax freeze plan this summer- followed by several other worthless pandering erratic gimmicks to get our money back in the hands of the banking elite
McCain needs to tell everyone his cancer has returned and get out of the race – no one takes him any more seriously than Bush -
By Rob W. October 14, 2008 at 5:59 pm
Will- lowering government revenue doesn’t force the government “to stop spending money it doesn’t have and then sticking us with the tab”. Bush has proved (and neither presidential candidate will change) the fact that lower taxes, while good for our economy, by themselves only result in more government debt. I don’t see either party willing to stop spending on specific programs, since that’s usually a political nonstarter. The money’s going to get spent; the only question is whether we pay our share now or we pay for it years down the road. Personally, I think the only “fiscally conservative” thing to do is to pay now instead of later.
By Rob W. October 14, 2008 at 6:08 pm
Jack- the 23% number is of the “tax inclusive price”, not the usual exclusive rate people think about. That’s a bit misleading. If I buy a McDonalds $1 delicious chicken sandwich, it will cost me $1.30, not $1.23. If I buy a $100 worth of groceries, that will cost $130. If I buy a $200,000 house, it will actually cost me $260,000. The 23% number is only valid if you’re paying tax on your tax- something no one currently does.
There may be some benefits to a Fair Tax system, but let’s be fair and call it a 30% sales tax, not a 23% sales tax.
By James October 15, 2008 at 9:42 am
Is McCant going to suspend his campaign again to get this latest drivel fast-tracked?
What a pathetic joke of a candidate this moron has turned out to be. Many of us knew this already and weren’t afraid to vote for a (gasp) Mormon in the S.C. primary.
Come on all you kool-aid drinkers that put McCant over the top in the primnary – where’s your support for your candidate and his new grand plan?
By Jack October 15, 2008 at 10:17 am
Rob,
For sake of simplicity if one earns $1,000.00 per pay period, and he is in the 25% tax bracket, his tax deduction will be $250.00, leaving him with $750.00 take home pay.
If the FairTax is implemented, this wage earners take home pay would increase from $750.00 to $1,000.00, a 33% increase, so the tax bracket must be 33% right?
When comparing tax rates, the FairTax is quoted on the same basis as the Income taxes it is replacing. For practical purposes, the FairTax Act requires the tax to be included in advertised prices and clearly spelled out in dollar amount and percent of total purchase on every receipt in a taxable transaction for new goods and services.
As for Nope, aptly named I might add, Senator DeMint is relying upon studies conducted by numerous economists that consistently prove that although all taxes act as negative incentives against productive endeavors, the least disruptive taxes, is a tax on consumption. This is exactly as envisioned by our founding fathers who expressly prohibited income taxes in the Constitution. Of the consumption taxes, the least distortive is placed on the widest possible base at the lowest possible marginal rate. If you have an objection to the 23% rate which was calculated to be revenue neutral, that is a spending issue, which I heartily agree needs to be addressed. Just as soon as we clean up this 67,000 page abomination called the Internal Revenue Code.