The Spirit of Fred Thompson Lives in John McCain
Sen. John McCain delivered another economic speech today building up his economic agends. There were a few new ideas to add to the ones he’s been talking about on the stump for months.
McCain has said he wants to drop the corporate tax rate from 35% to 25% and preserve President Bush’s tax cuts. He also reaffirmed his free trade stance. That puts him in stark contrast to Smoot-Hawley Democrats like Sens. Clinton and Obama. The new elements include doubling the exemption for a child or dependent from $3500 to $7000, allowing businesses to expense new equipment purchases in the first year, ban internet and new mobile phone taxes, and make the R&D tax credit permanent.
McCain said he wanted to freeze discretionary spending for one year. However, discretionary spending is roughly a third of the federal budget. To get federal spending truly under control the President and Congress needs to go after entitlements like Medicare, Medicaid, and Social Security.
Jim Geraghty’s right. The news-making proposal is ditching the federal gas tax over the summer. Of course by McCain’s logic on the Bush tax cuts reinstating the gas tax after Labor Day would amount to a tax hike.
Like sending out checks to stimulate the economic suspending the gas tax won’t do much for long-term economic growth. Sure, it’s less money going to the federal government, but I don’t have high expectations that it will do a lot for the economy other than tourist spots within road trip distance.
The most surprising element of McCain’s plan is an optional simplified tax system. It would have “two tax rates and a generous standard deduction.”
If you’re a Fred Head that last part sounds eerily familiar. Last fall, Fred Thompson issued a tax plan that included an optional flat tax with two tax rates and a generous standard deduction. Another element of the Thompson plan was reducing corporate tax rates.
I don’t know if Thompson and McCain have spent any time together since McCain became the GOP nominee. Like a wrote above McCain for some time has been talking about cutting the corporate tax rate. The optional alternative tax came out of the blue. I wonder how much influence Thompson had?
Another interesting idea McCain brought up was a revamping of unemployment benefits. He proposed changing the current welfare-style system into a personally-controlled rainy day fund:
Right now we have more than a half-dozen different programs that are supposed to help displaced workers, and for those who are not working at all. We have an unemployment insurance program straight out of the 1950s. It was designed to assist workers through a few tough months during an economic downturn until their old jobs came back. That program has no relevance to the world we live in today.
If I’m elected president, I’ll work with Congress and the states to make job training and unemployment insurance what they should be — a swift path from a job that’s not coming back to a job that won’t go away. We will build a new system, using the unemployment-insurance taxes to build for each worker a buffer account against a sudden loss of income — so that in times of need they’re not just told to fill out forms and take a number. And we will draw on the great strengths of America’s community colleges, applying the funds from federal training accounts to give displaced workers of every age a fresh start with new skills and new opportunities.
This sounds a little like personal savings accounts under some Social Security reform plans. A “buffer account” has a whiff of paternalism but no more than the current system. This could be a well-design innovation that reduces bureaucracy while getting help more quickly to those who need it.
For more thoughts here’s Philip Klein, Jerry Taylor, Winghunter, Bill Dupray, and James Joyner.
[original picture via marcn]
The Spirit of Fred Thompson lives in John McCain? Dude, you do realize that in the stages of grief, denial is supposed to come first, and acceptace last, not the other way around right?