McCain's "New" Economic Plan Is Simply More Of The Same

John McCain shocked conservatives last week with his $300 billion dollar plan to help homeowners, but outrage from the right made that disappear quickly. Now with the campaign falling apart, he is going back to the tried and definitely untrue conservative path of cutting more taxes for the rich via capital gains tax cuts. Will it be enough to appease his RNC overlords (who just redirected campaign funds to the Senate slate) and the GOP faithful?

From ThinkProgress:

On Monday, Barack Obama announced “a new economic rescue plan Monday geared toward middle-class voters.” McCain didn’t announce anything, which “caused some head scratching.”

And now, on Tuesday, McCain is unveiling his new proposals, going back to the well of tax cuts for the rich. McCain will announce plans to “cut the capital gains tax on stock profits in half, from 15 percent now on stocks held a year or longer to 7.5 percent — a $10 billion proposal.” The Wonk Room’s James Kvaal noted the impact of cutting capital gains:

Households earning less than $50,000 a year collected a mere 2.5 percent of capital gains in 2005, according to the Tax Policy Center. Families earning more than $1 million a year collected 59 percent of capital gains. Moreover, most middle-class families with capital gains hold their investments in retirement accounts shielded against capital gains taxes.

For a candidate already promising $175 billion tax cut for corporations, including $4 billion for oil companies, handing out a new tax cut for millionaires and calling it a “Pension And Family Security” plan is oddly appropriate.

Now that is the Republican I know! Cutting taxes for those that already have tons of money and nothing for those that don't is the only thing they know on the right. Of course when it comes to talking to the public about it, his spokeswoman hasn't a clue about how much it'll cost the rest of us. The confusion for Nancy has to be hard to handle, since her man continues to flip and flop about nearly every issue including economics.

McCain Has The Sympathy Of A Rock

John McCain may have purposefully married into a big, beer-funded family to get rich, but that has no bearing on the fact that he can not understand what it is like to be poor, let alone be in touch with them now. Even more so, he has no right to say that Barack Obama is insensitive to poor people and especially for the petty little reason he tries to claim ground on.

From The Huffington Post:

"I noticed again today that Sen. Obama repeated his opposition to giving low-income Americans a tax break, a little bit of relief so they can travel a little further and a little longer, and maybe have a little bit of money left over to enjoy some other things in their lives," McCain said. "Obviously Sen. Obama does not understand that this would be a nice thing for Americans, and the special interests should not be dictating this policy."

The Arizona senator deflected questions about his record on the Bush administration's tax cuts _ he initially opposed them but now supports extending them _ by again criticizing Obama.

"Sen. Obama wants to raise the capital gains tax, which would have a direct effect on 100 million Americans," McCain said. "That means he has no understanding of the economy and that he is totally insensitive to the hopes and dreams and ambitions of 100 million Americans who will be affected by his almost doubling of the capital gains tax."

That little tax break would freeze the federal gas tax, which would lighten the load by 18.5 cents...initially. That money goes towards fixing our highways and finding transportation solutions that our nation so desperately needs. The real problem with gas prices is much deeper than cutting that tax. Gas prices could easily go up that much in a few weeks time, so our next President must cut our demand for gasoline and use alternate fuels to keep us going in the 21st century. As for that capital gains tax, the people that see real differences from the cut are nowhere near poor and honestly, that whole thing about reducing the capital gains tax to stimulate growth is a crock of shit.

Gibson Distorted The Truth On Capital Gains

It is clear to pretty much everyone that saw Wednesday night's debate that the episode was a gotcha politics styled, banishment from journalism worthy, shoddy and miserable event. One moment in particular focused on capital gains taxes, probably the only time any part of the economy was mentioned. Gibson hammered Obama on wanting to raise it, claiming that when Bush lowered the tax, revenues went up. Sounds good for supply-siders when he says it, but is it true?

From Time Magazine's Justin Fox:

Here's a chart of the last ten 12 years of capital gains tax revenues, which first ran in a post I did in January:

My point in that post was that fiscal year 2007 is going to represent a peak in capital gains tax receipts not to be equalled for years to come--and it's lower than the previous peak in 2000. Over the course of the business cycle, a lower capital gains tax rate left us with less revenue. Now there were other factors at work--the stock market bubble that finally began to deflate in 2000 was of historic proportions. But you certainly can't declare from that evidence that cutting the rate increased revenue.

And this is even leaving aside the basic point that the trend for tax revenue in a growing economy is going to be up. So if you're going to claim that a tax cut increased revenue, you need to offer some evidence that revenue rose even more than would have been the case if rates had remained the same.

There are all sorts of good arguments for keeping capital gains tax rates relatively low (but also some good ones for keeping them pretty close to rates on regular income). But to repeat: Cutting them does not increase tax revenue. And that Charlie Gibson was spouting the totally bogus line that they do on national TV last night was an outrage. One of many, I hear.

Yes Justin, one of oh so many outrages. All of them add up to one thing, a moment of erosion for the fourth estate and the soundness of our democracy. ABC's debate and the questions from Gibson/Stephanopolous were atrocious, and should be an example for all future moderators to avoid at all costs.