Is McCain's Tax Plan Really Any Different From Current Policy?

In his acceptance speech last Thursday night, Senator McCain had this to say about the economic wisdom of his proposed tax cuts:

I will keep taxes low and cut them where I can. My opponent will raise them… I will cut government spending. He will increase it.  My tax cuts will create jobs; his tax increases will eliminate them… We all know that keeping taxes low helps small businesses grow and create new jobs…

I know some of you have been left behind in the changing economy, and it often seems that your government hasn’t even noticed… That’s going to change on my watch…

But whose government and whose economy has left these Americans behind?  (I doubt anyone would try to defend the suggestion that it’s the “Obama economy” any more than you could call it the “McCain economy”–they’ve both been serving in the current Congress after all…) 

And how is the centerpiece of McCain’s economic plan (full extension of the full complement of the Bush tax cuts) any different from “staying the course” on Bush economic policy?  What is the ”change” in economic policy that McCain is talking about? 

(I know that the McCain-Palin ticket is trying to portray itself as the ticket of “reform” in emphasizing how they will eliminate earmarks and otherwise cut waste, fraud, and abuse.  Unfortunately, those things don’t amount to a hill of beans, and although that doesn’t mean the economy wouldn’t benefit at least a little from cutting wasteful spending, this kind of “reform” isn’t going to create millions of new jobs.  Heck, some of that wasteful spending might actually support some (wasteful) jobs…)

And this past Friday, less than 12 hours after McCain’s speech suggesting that a “stay the course” position on the Bush tax cuts would create lots of jobs, the bad news from the Labor Department:

(CNN-Money)  The unemployment rate soared to a nearly five-year high in August as employers trimmed jobs for the eighth straight month, the government reported Friday.

The unemployment rate rose to 6.1%, the highest level since September 2003. That’s up from 5.7% in July and 4.7% a year ago.

In addition, the economy suffered a net loss of 84,000 jobs in August, according to the U.S. Department of Labor, compared to a revised reading of a 60,000 job loss in July.

The U.S. economy has lost 605,000 jobs so far this year.

So Senator McCain’s claims regarding the “change” he’d bring to economic policy and all the jobs the tax cuts would generate seem less than compelling.  Many of the political pundits on cable TV (whether Republicans or Democrats) seemed to notice that as well (follow the links below to the YouTube videos):

MSNBC Former Republican Speechwriter for President Bush Michael Gerson – “The policy was the problem, the policy in the speech was rather typical for a Republican, pretty disappointing. It didn’t do a lot of outreach to moderates and independents on the issues that they care about. It talked about issues like drilling and school choice, which was really speaking to the converted. I think that was a missed opportunity. Many Americans needed to hear from this speech something they’ve never heard from Republicans before and in reality a lot of the policy they’ve heard from Republicans before.”
 
CNN David Gergen – “I did not think that the substantive part of the speech worked very well. It was mostly a rerun, retread of a lot of old Republican ideas that have brought us to where we are now.  I think the country is looking for fresh answers.  It’s hard to separate yourself out from President Bush when you essentially have the same economic policies as President Bush. I thought that the policy presentation was a little thin.”
 
MSNBC Rachel Maddow – “Honestly it was sort of like a long term paper about Bush Republican economics…But people aren’t mad at Barack Obama about the economy people are mad at George Bush about the economy and he just proposed a lot of Bush’s economic ideas. I think he really missed that.”

So, how convincing was McCain’s claim of “change” regarding the economy to you?   Am I just missing something in the messaging here?  Who are the people who are supposed to be convinced by this?

Disclosure: None

Comments

[Steven Hansen:]

as mccain is up in the polls evidently you were not his target audience. the average person is stupid. they have an appetite for one liners which feed their prejudices.

2008 Sep 09 05:08 AM

[viking2boot:]

What happens if McCain vetoes pork? Congress can over ride his veto so what would McCain have accomplished?

2008 Sep 09 08:14 AM

[sabbadoo32:]

Excellent points Diane.

As McCain's campaign manager said last week, the election for the Republicans cannot be on the issues. It must be on personality, on fresh faces, on images that have not bedrock in reality.

As mayor of Wasilla, Sarah Palin raised the sales tax, and left the town $13 million in debt. No one has mentioned McCain's membership in the Keating Five scandal in the 80's. A very good Google.

Bottom line, the word is getting out on the paucity of McCain's claims. Two weeks ago the empasis was on experience, now it's all about change. Next week it will be about 'beans' and the week after that 'peas'.

All I know is that had Republicans wanted that permanent majority they bragged about, they should have given the 2001 & 2003 tax cuts to the middle class instead of the rich.

And I honestly wouldn't be surprised if next week McCain said he'd change his tax cut policy to do just that.

2008 Sep 09 08:50 AM

[selene:]

BTW unless that audience consisted of people earning over $250K per year, McCain's statement that "Obama will raise your taxes" is untrue.

2008 Sep 09 09:40 AM

[LouieK:]

Rogers quoted:

"There’s no doubt that Obama’s higher tax rates would mean weaker incentives to work, take risks and innovate; and stronger incentives to waste time and effort on avoiding the tax man.

But those bad effects must be weighed against a good one: Higher tax rates mean a lower budget deficit."

The Democrats' reputation for tax and spend is to tax and then take the taxes and spend it on special interests such as unions, government bureaucracy, welfare, Leftist ideas such as the environmental lobby, etc.

I think historically, the Democrats have been the party of tax and spend, and the Republicans the party of tax and spend, but the difference is the Republicans tilt toward less tax and spend and more encouragement of private, business investment (via lower tax rates on the rich, small business and corporations). Spin all you want, but you are not correct. Give either party more tax money and they will spend it, largely, foolishly, not necessarily decrease the budget. The truth is that the Democrats are the party that has created (and threatens to continue) the policy of winning elections based on promises intended to buy the electorate. The Republicans find the need to follow suit to keep up with the Democrat inspired largesse.

Rogers writes like an ideologue and spins, spins, spins. For instance, she quotes from MSNBC (who had to demote two left-wing anchors they were doing so badly) and CNN and disaffected Bush Republicans such as Gerson and poses this as an adequate rendering of McCain.

2008 Sep 09 10:43 AM

[wpdragon:]

louie, you're obviously a shill for the RNC... and a hypocrite for calling Democrats tax and spenders after what the republkaans have done for 7 1/2 years, which is "Spend and Spend More, and then let the criminals who destroyed the world credit markets off the hook and cut their taxes to boot"

2008 Sep 09 11:47 AM

[Matt Blackman:]

This is clearly a strongly biased pro-Democrat piece. Here are some notes from her bio, "Diane served as Chief Economist for the House Ways and Means Committee Democrats, and Principal Economist for the Joint Economic Committee Democrats. She was a Senior Economist on the staff of the Council of Economic Advisers during the last year of the Clinton Administration and first 100 days of the Bush Administration, and in President Clinton’s final Economic Report of the President (2001) drafted the sections extolling the merits of fiscal discipline."

Gee, I wonder who she's working to have elected?

So in addressing her initial question, "Is McCain's Tax Plan Really Any Different From Current Policy?" The biggest and most important change is that McCain is proposing to lower US corporate taxes from the current 32% rate (as a result of the Job Creations Act 2004) to 25%. Obama would see it return to 35% making US corporations among the most highly taxed in the industrialized world. Obama will also raise capital gains, dividend and income taxes for the top 5% of earners who now pay 70% of the tax burden.

Obama has claimed that he would lower taxes for 95% of Americans but is that reality? More than half of American households have investments and earn capital gains, dividends or both and taxes on this income would increase substantially under Obama.

I don't care what your political affiliation is, raising taxes on corporations, dividends and capital gains cannot be good for a stocks in a struggling economy.

2008 Sep 09 12:36 PM

[sabbadoo32:]

Matt,

The top 5% were supposed to use the money from the 2001 and 2003 tax cuts to drive the economy, create jobs, and all the other stuff the GOP said they'd do. As we all know, they didn't. The worst recovery in the history of the republic was financed by the middle class through credit card and home equity debt. The top 5% kept their money.

Since they did nothing with what we gave them, they need to give it back.

2008 Sep 09 04:26 PM