McCain’s plan to lower taxes is America’s express lane back to prosperity
John McCain’s economic vision for America supports keeping taxes low and reforming out-of-control government spending. In every instance, McCain offers clear proposals that would benefit middle-class families and small businesses while his opponent offers empty rhetoric contradicted by his own record.
The financial crisis rippling across America is unsettling to every family worrying about their jobs and economic future. This crisis is systemic, causing concern to everyone who has a 401(k) plan or needs a home, car or student loan.
McCain supported comprehensive, bipartisan action to inject liquidity into credit markets, raise the limit on FDIC insurance from $100,000 to $250,000 and provide oversight of the plan’s implementation. Because of his leadership, Congress recently acted to implement this rescue plan.
Barack Obama and running mate Joe Biden divert attention from their records of huge tax increases and wasteful spending by distorting McCain’s record on common-sense regulations.
They claim that McCain supports deregulation because he voted for a 1999 bill to remove the Depression-era wall between commercial and investment banks. The only problem is that Biden also voted for the bill and Obama’s top economic advisors—and President Clinton—supported it. Most experts agree that the current credit crisis would have been worse without it.
McCain supports targeted financial regulations, not arbitrary, added layers of bureaucracy that will stifle our financial markets. McCain warned against excessive risk-taking by Fannie Mae and Freddie Mac and pushed for strengthened regulations over two years ago, when Obama denied that a problem even existed. And Obama took more campaign money from Fannie and Freddie than anyone except Senate Banking Committee Chairman Chris Dodd, D-Conn.
If elected, McCain will overhaul the tax code to close costly, unfair corporate loopholes. He’ll offer two basic tax rates and a generous standard deduction, which will streamline the arcane tax code.
McCain’s economic plan also phases out the alternative minimum tax, which will save more than 25 million middle-class families more than $2,000 every year. Also, he will double federal income tax exemptions for dependent children from $3,500 to $7,000.
Most importantly, McCain will cut the corporate tax rate from 35 percent—the second highest in the industrialized world—to 25 percent, to make the United States more competitive in the global economy and prevent jobs from going overseas.
It’s not enough to keep taxes low. McCain’s plan recognizes that government needs to stand on the side of taxpayers and businesses, not in their way.
To accomplish that, the veteran Arizona senator will enact a one-year freeze in nondefense discretionary spending while the government conducts a thorough review of every almost every agency’s budget.
Additionally, McCain promises to veto every bill containing wasteful earmarks. While that move will provide an initial savings of several billion dollars, it will also provide long-term benefits by sending a message that the status quo system of out-of-control spending and favors to special interests is over. Earmark binges corrupt members of Congress because earmarks are used to pressure members to vote for bills that contain even greater spending.
McCain’s reforms will encourage Congress to overhaul not just earmarks but discretionary spending and entitlement programs, which are skyrocketing in cost, and presenting huge burdens to future taxpayers.
Obama offers lofty rhetoric on spending and taxes, saying he won’t raise taxes on anyone making less than $250,000 a year. That makes a nice campaign speech, but what will he do if a Democratic Congress sends him a bill increasing taxes on the middle class to pay for the more than $1 trillion in new spending he proposes? This year, the Democrats’ budget plan called for an increase in taxes on people making just $42,000 a year, and Obama voted for it.
Obama’s economic plan is misleading rhetoric that doesn’t match his own voting record. McCain’s economic plan is a bold effort to boost the middle class and create jobs across America.
Mark J. Perry is a professor of economics at the Flint campus of the University of Michigan. Readers may write him at 4173 White Building, UM-Flint, Flint MI 48502 or e-mail him firstname.lastname@example.org.