McCain Readies Economic Plan

By Justin Gardner | Related entries in Economy, McCain, Money, Taxes

And while there seem to be no details about what he actually wants in the plan, there is one very important thing he doesn’t.

From HuffPost:

Sen. John McCain is putting together a major economic plan that will be structured, in some ways, off of Newt Gingrich’s famous Contract With America.

In an email obtained by the Huffington Post, the Arizona Republican’s chief of staff, Marc Buse, asked an outside adviser for help with a “ten principles” program that the senator could use as a “definitive” platform.

“We are looking for some guidance on a definitive plan (aka contract with america style) on the economy…principles,” writes Buse. “Ten principles that JSM could point to on what MUST BE DONE to address the problems our nation faces.”

Buse doesn’t offer specific suggestions of his own, save “NO TAX INCREASES.”

If the e-mail is true, it demonstrates a bit of shallowness. Because coming up with a “ten point” plan is a gimmick, nothing less. Who cares if there are 5 points or 7 points or 11 points?

But hey, I could be wrong. They could find ten points that make a hell of a lot of sense.

For instance, I’m sure many of you will be happy that no tax increases will be included in that, even though making the wealthy pay just a bit more shouldn’t be seen as too much to ask in this time of crisis. Especially when they’re enjoying the largest income inequality since, well, right before the Great Depression. After all, what have they been asked to sacrifice in the past 9 years except donate money to the Republican party so they could get their capital gains taxes decreased 5% and their dividend income capped at 15%?

For some perspective on those cuts, I give you this from 2003

The 400 wealthiest taxpayers accounted for more than 1 percent of all the income in the United States in the year 2000, more than double their share just eight years earlier, according to new data from the Internal Revenue Service. But their tax burden plummeted over the period.

The data, in a report that the I.R.S. released last night, shows that the average income of the 400 wealthiest taxpayers was almost $174 million in 2000. That was nearly quadruple the $46.8 million average in 1992. The minimum income to qualify for the list was $86.8 million in 2000, more than triple the minimum income of $24.4 million of the 400 wealthiest taxpayers in 1992.

While the sharp growth in incomes over that period coincided with the stock market bubble, other factors appear to account for much of the increase. A cut in capital gains tax rates in 1997 to 20 percent from 28 percent encouraged long-term holders of assets, like privately owned businesses, to sell them, and big increases in executive compensation thrust corporate chiefs into the ranks of the nation’s aristocracy.

This year’s tax cut reduced the capital gains rate further, to 15 percent.

No tax increases? When we all know that the wealthy draw their main source of income from investments that they only have to pay 15% on?

Good times.


This entry was posted on Wednesday, March 11th, 2009 and is filed under Economy, McCain, Money, Taxes. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

6 Responses to “McCain Readies Economic Plan”

  1. kranky kritter Says:

    McCain knows he lost, right? Just checking. :-)

    I am perfectly willing to keep an open mind about what ends up on this list. But I already know one thing I fully expect: that it won’t really be a list of the most important things for the nation. Because such a list is bound to reallybe a marketing/branding strategy for the GOP.

    What does that mean? Well, for one thing it means that the things that end up on the list will be geared first towards distinguishing GOP philosophy from democratic approaches. That means that it starts with the premise that virtually all efforts currently being undertaken by democrats are at best misguided.

    And THAT means that nothing in this list is likely to provide much in the way of common ground for the admin to work with the GOP on. I sincerely hope that I am wrong about that. Indeed I’ll celebrate it.

    I believe that ultimately a list of important national priorities and approaches to them should lie somewhere between the cant that each party pushes. At this time, I would love to see more of our leaders trying harder to put aside partisan differences for the sake of marginal improvements. Better is surely the enemy of best, but since I usually suspect that “best” is a distortion or simplification being sold by narrow true believers, I am usually willing to settle for better.

    So I want to see both sides work together harder than usual to come up with decent improvements in areas that are important national priorities. And I am skeptical that the issuance of a 10 pt manifesto by the minority party will lead to progress in that direction. But we’ll see.

  2. Justin Gardner Says:

    And THAT means that nothing in this list is likely to provide much in the way of common ground for the admin to work with the GOP on. I sincerely hope that I am wrong about that. Indeed I’ll celebrate it.

    Agreed on that. If McCain can put something together that finds common ground, then great. But something tells me it’s going to be a list of principles, as the post states.

    Also, the idea that the wealthy aren’t being asked to sacrifice just a little bit during such a tough economic time is really disheartening. Hell, I’m even willing to pay more taxes to get some of this stuff done. But before that happens, I want capital gains taxes restored to their pre-2000 levels as well. It’s ludicrous that I pay a higher tax rate than Warren Buffett.

  3. Snoop-Diggity-DANG-Dawg Says:

    …a “ten point” plan is a gimmick…

    A gimmick? In American politics? The heck you say…

  4. ExiledIndependent Says:

    McCain had his shot at serious insight and meaningful economic leadership last October. Sorry Sidney, but that ship has sailed.

  5. John Burke Says:

    Why is it that it’s so hard to understand that capital gains are taxed at a lower rate because it induces people — some very rich, some not so rich — to risk their money by investing it, mostly in enterprises that grow, create jobs and incomes and contribute more taxes.

    If you have $100,000 in your life savings, will you risk, say, half of it to make such investments? Are you more or less likely to risk half of it if you expect to pay 35% of any gains in taxes or 15% of any gains? Make no mistake, the risks are real, as all of us who just saw 50% or more of money we put at risk disappear can testify.

    One can argue, of course, whether a 15% rate is more “unfair” than a 20% rate, but it’s a sterile argument. The higher the rate, the less likely the risk taking; it’s that simple. The issue is do we want to encourage people to invest and take risks or not? If we do, then we should put as few obstacles in the path of the reward they get as possible. In the current downturn, we should want to increase incentives to invest, not cut them back.

    As people get to be insanely rich, like the top 400, they become objects of envy, to be sure. We insinuate that they aren’t holding up their end, that they must have done something untoward, so why should they have so much. But for the most part, they were not always so wealthy. Bill Gates wasn’t. Sam Walton wasn’t. Warren Buffett wasn’t. What these people have in common is that they were more adventurous than I was at a similar age, and willing to put their money and time into some enterprise that could easily have failed, while I either spent or saved or sheltered my income. They’re being rewarded for that. Good for them and good for us.

  6. John Burke Says:

    One more thing. I’m going out on a limb to say that the top 400 earners — make that the top 4000 or more — will pay precious little in added taxes no matter what rates are hiked. These guys will simply ramp up their tax avoidance strategies; ever hear the phrase, “tax havens?’

    Push comes to shove, some of them wil move whole enterprises offshore — or move themselves to Switzerland for that matter. I personally know a wealthy entrepreurial famil that has made Geneva their Hq.

    Worse still in the long run, once the recession ends — and it will end in 6 or 9 months — if opportunities for investment in the US are flagging for tax or other reasons, investments in China, India, Vietnam, parts of South America, some countries of East Europe, etc. will look even better than they have over the past 15 years. Even before the recession and the financial crisis, were investors more likely to put their dough in China or Michigan?

    Even the top 40,000 will manage tax hikes fairly well, as larger legions of accoutants find (or invent) all of the “smaller” tax avoidance strategies.

    Will will get the bill then. Mostly the top 400,000 and beyond to the top million or so. BUT if there isn’t enough money from them at that point — in 2011 or 2012 — to pull in the deficits to reasonable levels, there will be three choices:

    – Inflate the curremcy;

    – Raise taxes on more people; or

    – Cut back spending on the new programs so recently enacted.

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