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—Taxpayers with children will lose 50% of their child tax credits;
—The Federal death tax will soar back to its original level after phasing out in 2010;
—Married taxpayers will suffer the return of the marriage penalty.
—Federal taxes overall will increase by more than $2 trillion over the following 10 years, the largest tax increase in U.S. history.
The economic policy savants at the Concord Coalition think this will help the economy rather than trash it.
THE ORGANIZATION DERIDES McCain for recognizing the economic devastation such a disastrous tax policy would cause, and supporting the permanent adoption of the Bush tax cuts. It also sharply criticizes the additional tax cuts McCain has proposed for his own economic program, saying, “The centerpiece of Mr. McCain’s economic plan is a series of tax cuts that would largely benefit corporations and the wealthy. He is calling for cutting corporate taxes by $100 billion per year.”
McCain has proposed cutting the Federal corporate income tax rate from 35% to 25%. The problem McCain recognizes is that America’s competitors overseas have been slashing corporate tax rates in recent years. The average corporate tax rate in the European Union has been cut from 38% in 1996 to 24% in 2007. Counting state income taxes, the average American corporate rate is actually 40%.
How is America to compete not only with these countries, but with the emerging giants of India and China, with this crippling tax disability? McCain says, “High tax rates are driving many businesses and jobs overseas — and, of course, our foreign competitors wouldn’t mind if we kept it that way. We’re going to get rid of that drag on growth and job creation.” But the Concord Coalition vilifies McCain for this sophisticated view, saying, “Mr. McCain’s plan would appear to result in the biggest jump in the deficit” as compared to the economic programs of Barack Obama and Hillary Clinton. The Concord Coalition would favor raising taxes on America’s corporations even more, to reduce the dreaded demon deficit, tax increases endorsed by Obama and Hillary as well.
Little Ireland has a corporate tax rate of 12.5%. Since adopting that rate 20 years ago, Ireland has soared from the second lowest per capita income in the EU to the second highest. But to the Concord Coalition, this does not compute.p>But what may have surprised some is what the Concord Coalition said about McCain’s budget plan to cut $160 billion in spending out of a Federal budget now approaching $3 trillion a year. The Wall Street Journal reported, br> /p>
“The chances of cuts of this magnitude are ‘nonexistent,’” said Robert Bixby, executive director of the Concord Coalition, a nonpartisan group that promotes fiscal discipline. “There’s not a consensus to cut back on the functions of government that much,” he said. “Those are very, very deep cuts.”
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