JOHN MCCAIN’S proposed tax policy focuses on promoting growth and providing relief to families facing nothing short of abuse by the current system.
High gasoline and food prices are squeezing the budgets of millions of American families. Although John McCain supports a decreased dependence on foreign oil and an increased investment in alternative energy, he acknowledges that such measures take time to reach fruition and offer families a reprieve. To provide immediate relief, he supports action to repeal the 54 cents per gallon tax on imported sugar-based ethanol, which keeps gas prices artificially high. He has also asked Congress to institute a summer gas-tax holiday, which would suspend the 18.4 cents per gallon federal gas tax.
Furthermore, John McCain seeks to alleviate the burden the current federal income tax system creates. He supports extending President Bush’s tax cuts, citing the fact that increased take-home pay stimulates the economic growth vital to creating new jobs, improving living standards, and balancing the budget. He further supports leaving the top tax rate at 35 percent, whereas his opponent calls for an increase to 39.6 percent. Additionally, McCain supports repealing the Alternative Minimum Tax, a pernicious system of taxation that excludes many of the standard system’s deductions, including those provided to individuals with children. Originally designed to target 155 individuals, it now applies to 4 million middle-class Americans and could affect 30 million people by 2010.
John McCain also proposes raising the exemption for dependents from $3,500 to $7,000. The government currently gives this exemption, which ensures that individuals can afford life’s necessities, to all taxpayers claiming dependents. With increasing food prices and the exorbitant cost of childcare, anyone with children can testify that an increase in this personal exemption is crucial. At the same time, McCain wants to ensure that an individual can provide security to his or her family, even after the individual’s death. To this end, he supports decreasing the estate tax from 45 percent to 15 percent and increasing the exemption to $5 million.
John McCain’s overall economic plan focuses on maintaining the growth that will create new jobs, and he supports reforming the tax system to provide an environment conducive to such growth. Since 1989, small businesses have created 93.5 percent of total new jobs, making them the backbone of America and a driving force behind economic growth. Millions of small business owners, however, are registered as landlords, sole proprietorships, or partnerships, making them subject to the individual income tax rate. Therefore, John McCain opposes any increase in the income tax rate, as it would risk stifling small business and eliminating jobs.
America has the second highest corporate tax rate in the world. High corporate tax rates smother investment and increase unemployment, as corporations look outside American borders for more cost-efficient production. John McCain wants to keep jobs in the United States, and to this end, he proposes reducing the corporate rate from 35 percent to 25 percent. In addition to decreasing the corporate rate to promote investment, McCain also supports leaving the long-term capital gains tax at 15 percent. He realizes that access to capital is indispensable to growth, whether it is for a small business or multinational firm investing in research and development or for an individual investing in a college fund or for retirement. Even more, John McCain wants to institute a tax credit on research and development equal to 10 percent of the wages spent on projects.
Americans are feeling the pressure of today’s economy and searching for reassurance. John McCain’s tax plan includes reforms necessary to grant immediate and permanent relief. It also provides the incentives essential to promoting competition and growth, leading to job growth and security.
Amanda Nichols is Vice Chair for Events for the College Republicans.
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