McCain's Convenient Untruth

From Washington Post

When it comes to fighting wars, John McCain stands up and calls for sacrifice. "We never hide from history; we make history," he declared in his convention speech. But when it comes to taxes, McCain is unwilling to demand even a teensy bit of sacrifice. In a McCain administration, Americans would not have to surrender a dime more of their money to a cause larger than themselves.

Why this bipolar attitude toward sacrifice? Start with the answer that McCain himself provides. "My tax cuts will create jobs. His tax increases will eliminate them," he said at the convention, offering one of the speech's few policy contrasts between Obama's platform and his own. In other words, McCain is not calling for tax sacrifice because he believes it would be counterproductive. On taxes, he is saying, you can selfishly avoid sacrifice -- and serve the public good.

This, unfortunately, is a convenient untruth. Tax hikes taken to an extreme can indeed backfire, harming growth and job creation. But it's a stretch to assert that Barack Obama's tax plan would do that. And it's downright scandalous to pretend that the economy can be strengthened in anything other than the short run by unaffordable tax cuts.

Obama is not proposing to raise taxes for most Americans. To the contrary, he would triple the earned-income tax credit for low-wage earners, increasing work incentives at the bottom. He would cut taxes on people in the middle -- indeed, he would do so more aggressively than McCain would. It is only the wealthiest Americans who would face higher tax bills under Obama. According to the nonpartisan Tax Policy Center, Obama's plan would require the richest 1 percent of Americans to sacrifice a modest 1.5 percent of their after-tax income in 2012. By contrast, no-sacrifice McCain would award America's elite a 9.5 percent increase.

How might this impact jobs and the economy? Under Obama's plan, top earners would pay a marginal federal tax rate of maybe 46.5 percent (that includes the Medicare tax and Obama's proposed hike in Social Security taxes), considerably more than the 37.9 percent they would pay under McCain. 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.

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http://www.washingtonpost.com/wp-dyn/content/article/2008/09/07/AR2008090701950.html