By INVESTOR’S BUSINESS DAILY | Posted Tuesday, April 15, 2008 4:20 PM PT
Election 2008: Surprising many, John McCain has presented a fiscal plan that prominently features big tax cuts and pro-business tax reform. That means the choice this November may just be the starkest ever.
Read More: Election 2008 | Budget & Tax Policy
It’s been said time and again that the GOP nominee-in-waiting has a lot of fence-mending to do with his party’s conservative base. But in the economic speech he gave at Carnegie Mellon University on Tuesday, the Arizona senator may just have produced the political equivalent of the Hoover Dam.
McCain is proposing to double tax credits for families, extend the Bush tax cuts on income and investment that he originally opposed and even offer taxpayers a choice between the current tax code and a “simpler,” “flatter” and “fair” system.
Referring to his Democratic opponents, McCain noted that in financing their big government proposals “they would like you to think that only the very wealthy will pay more in taxes, but the reality is quite different.”
Invoking Barack Obama’s best-selling memoir, “The Audacity of Hope,” McCain quipped: “They’re going to raise your taxes by thousands of dollars per year — and they have the audacity to hope you don’t mind.”
McCain’s alternative to bigger spending and higher taxes is a vow to block any and all earmarks from Congress.
“I will veto every bill with earmarks until the Congress stops sending bills with earmarks,” he vowed. “I will seek a constitutionally valid line-item veto to end the practice once and for all.”
On the dependent-child exemption, McCain proposes “doubling it from $3,500 to $7,000 for every dependent, in every family in America.”
He’d also ban Internet and new cell-phone taxes, let taxpayers opt for “a vastly less-complicated system with two tax rates and a generous standard deduction” — the kind of tax code for which many supply-side economists and their supporters have been pining for many years.
The new tax-cutting McCain was paired in the speech with his familiar persona as a spending hawk in the form of a one-year suspension of increases in discretionary expenditures (not including defense and veterans programs), plus a “thorough review of the budgets of every federal program, department and agency.”
Notably, the senator is putting forward this kind of low-tax, tight-fisted economic plan while at the same time serving up some of the same kind of class-warfare rhetoric he was known for during his opposition to the tax cuts of Bush’s first term.
Americans are “right to be offended when the extravagant salaries and severance deals of CEOs — in some cases, the very same CEOs who helped to bring on these market troubles — bear no relation to the success of the company or the wishes of shareholders,” McCain remarked.
“Something is seriously wrong,” he added, “when the American people are left to bear the consequences of reckless corporate conduct, while Mr. (James) Cayne of Bear Stearns, Mr. (Angelo) Mozilo of Countrywide, and others are packed off with another 40 or 50 million for the road.”
That populism went beyond words, with McCain calling not only for a summertime suspension of the gas tax and a halt to filling the Strategic Petroleum Reserve (see below).
He also used the recent credit crisis as an opportunity to propose that “the Department of Education work with the governors to make sure that each state’s guarantee agency has the means and manpower to meet its obligation as a lender-of-last-resort for student loans.”
McCain’s differences with the Democratic candidates on national security always have been clear and unequivocal. But now, with the National Taxpayers Union recently estimating that Hillary Clinton’s campaign platform would cost more than $226 billion a year, while Sen. Obama’s would cost more than $307 billion,McCain’s plan means this year’s presidential contest may not end up being Tweedledee vs. Tweedledum on economic policy.