The McCain Tax Increases

Discussion in 'Economics' started by walter4, Sep 12, 2008.

  1. SEPTEMBER 12, 2008 8:27
    The McCain Tax Increases

    Douglas Holtz-Eakin, a former Director of the Congressional Budget Office and current chief McCain economic advisor, is an honest man--which means he's something of a liability on the Straight Talk Express. A few months ago, he admitted to my colleague, Michael Scherer, that Barack Obama's economic plan would reduce taxes for most people. And now, in a forthcoming book by Fortune columnist Matt Miller, he makes it clear that the next President is going to have to raise taxes.

    "If you do nothing on the spending side, you're going to have to raise taxes whether you're a Republican, a Democrat or a Martian," he tells Miller...and then he immediately makes it clear that the "spending side" part of the argument is nothing more than a political fig-leaf.

    "It's arithmetic." Federal revenue today is 18.8 percent of GDP and federal spending is 20 percent. Holtz-Eakin observes that "the pressure are there" to lift spending [on entitlement programs, mostly] and taxes to 23 or 24 percent of GDP by around 2020, and to as much as 27 percent if health costs remain out of control.

    Miller does the arithmetic: that's an annual tax hike of $550 to $700 billion, well beyond the range of any spending cuts that McCain has or might propose. (Those vaunted earmarks cost about $20 billion per year.)

    It should be noted that Obama's proposed middle class tax cuts are nearly as foolish--and unlikely, in the long term--as McCain's, although Obama claims to pay for them by closing corporate loopholes and raising the top marginal tax rates to Clinton-era levels.

    But it's John McCain who has opposed any and all tax increases, sort of--as I reported yesterday, McCain would tax employer-provided health care benefits. (He would also raise energy costs significantly with his cap-and-trade carbon emissions reduction program.)

    Miller concludes:

    So why does tax-cutting mania persist among Republicans, I asked Holtz-Eakin, the McCain adviser--given...that, as Holtz-Eakin himself explain to me, taxes soon have to go up substantially in any event?
    "It's the brand," he said, "and you don't dilute the brand."

    Miller's book, The Tyranny of Dead Ideas, will be published by Holt in January 2009. I'm about halfway through reading an advance copy and, as is always the case with Miller, this is a smart, sane and extremely well-written account of our current economic mess.

    Update: What Holtz-Eakin admitted to Scherer was that the Obama's plan represented a net tax reduction over ten years.
  2. Saint Obama says: do away with all taxes.

    If God can feed the birds, then surely he can feed us...

  3. They know the facts aren't on their side, so they resort to ridiculous talking points like these

  4. WTF ??? !!!

    This should make more sense to most readers ....

    "The Tax Policy Center, a think tank run jointly by the Brookings Institution and the Urban Institute, concluded that Obama's plan would ***increase ***after-tax income*** for middle-income taxpayers by about 5 percent by 2012, or nearly $2,200 annually. McCain's plan, which cuts taxes across all income levels, would raise after tax-income for middle-income taxpayers by 3 percent, the center concluded.

    Obama would provide $80 billion in tax breaks, mainly for poor workers and the elderly, including tripling the Earned Income Tax Credit for minimum-wage workers and higher credits for larger families."

    So ... you can spend time reading the facts about the tax proposals ... or ... you can spend your time painting nutty pictures of Obama ... it is up to you "my friend" ....
  5. gkishot


    Just wondering if you are poor or elderly yourself?
  6. lets talk capital gains here!
  7. "The Tax Policy Center, a think tank run jointly by the Brookings Institution and the Urban Institute, concluded that Obama's tax plan would benefit middle-income taxpayers more than McCain's. However, Obama would raise payroll taxes on taxpayers with incomes above $250,000, and he would raise corporate taxes. Small businesses that make more than $250,000 a year also would see taxes rise."

    So which one is it? :D
  8. - The top capital-gains rate for families making more than $250,000 would return to 20% -- the lowest rate that existed in the 1990s and the rate President Bush proposed in his 2001 tax cut. A 20% rate is almost a third lower than the rate President Reagan set in 1986.
  9. "So which one is it?"

    I think we are saying the samething, Walter - the Obama tax plan will benefit the middle class more than the McCain plan - according to this study. Maybe you misunderstood my highlighting.