Almost a flat tax:

McCain attacked Obama on economic issues this week, and one item discussed was taxes:

[McCain] said that it is not enough to tweak the current tax code around the edges, and instead proposed “a vastly less complicated system” that would include two tax rates with a standard deduction.

What are those two rates? Checking McCain's own webpage on economics, there is only this: (emp orig)

John McCain Will Propose An Alternative New And Simpler Tax System – And Give America A Real Choice. When this reform is enacted, all who wish to stay under the current system could still do so, but everyone else could choose a vastly less complicated system with two tax rates and a generous standard deduction. Americans do not resent paying their rightful share of taxes – what they do resent is being subjected to thousands of pages of needless and often irrational rules and demands from the IRS.

In any event, it's likely that a two-rate system will have a lower "top rate" than the current one (which has rates of 10%, 15%, 25%, 28%, 33%, 35%). McCain is proposing something very close to Steve Forbes' Flat Tax.

The rich will get richer under McCain. And even when they die:

John McCain has also long sought permanent and immediate reform of the estate tax, and supports raising the exemption from taxation on estates up to $10 million while cutting the tax rate to 15 percent.

A good portion of McCain's "economy webpage" is about reducing taxes:

• John McCain will permanently repeal the Alternative Minimum Tax (AMT)
• He proposes to raise the personal exemption for each dependent from $3,500 to $7,000.
• John McCain ... supports raising the exemption from taxation on estates up to $10 million while cutting the tax rate to 15 percent.
• John McCain believes it should require a 3/5 majority vote in Congress to raise taxes.
• John McCain will keep the current rates on dividends and capital gains ...
• John McCain proposes to permit corporations to immediately deduct the cost of equipment investment ...
• John McCain Will Reduce The Federal Corporate Tax Rate To 25 Percent From 35 Percent.
• John McCain Will Ban Internet Taxes.
• John McCain Will Ban New Cell Phone Taxes.
• John McCain Will Establish Permanent Tax Credit Equal To 10 Percent Of Wages Spent On R&D. This reform will simplify the tax code ... [!]
• John McCain Will Propose An Alternative New And Simpler Tax System – And Give America A Real Choice. [The aforementioned 2-rate system]

What McCain proposes makes sense, if you want no government services or entitlements. McCain's tax policy is what libertarians would like. No taxes, or extremely low taxes. Just about everything is shifted to the private sector (e.g. toll roads, retirement insurance, food and drug certification, health insurance). McCain's slogan should be "No Taxes and No Government!"

CODA

McCain:

John McCain Will Reward Saving, Investment And Risk-Taking.

Forbes:

[I] would zero out capital gains taxes. It would set off a boom by ... lowering barriers to risk taking.

Interesting how both McCain and Forbes celebrate risk taking. How you fare in life is due to two things: Your own initiative (skill, effort), and luck (good and bad). Democrats, for the most part, try to capture some of the wealth that good luck brings and redistribute it to those who are unlucky. Republicans like to leave things unadjusted. Which system do you prefer?


posted by Quiddity at 6/10/2008 10:48:00 AM