T for Taxes

In the waning days of campaign 2008, John McCain has chosen to make tax policy the centerpiece, the last desperate plea of his candidacy. This choice is rendered curious by the fact that Barack Obama's tax plan offers lower taxes than McCain's tax plan to approximately 80% of the electorate. Here's a chart comparing the impact of the competing plans:



The bottom line: Obama's tax plan is good for Joe the Plumber and McCain's tax plan is good for Cindy McCain. By Joe the Plumber I mean everyman, somebody whose name might actually be Joe and somebody who might actually be a licensed plumber. To see how Cindy McCain would save over $300,000 on her tax bill under her husband's plan, go here: http://crooksandliars.com/jon-perr/mccain-offers-tax-windfall-cindy-beer-hei

My question is: How can John McCain tell voters that high taxes are the problem and then expect them to vote for him when he offers most of them a smaller tax cut than Barack Obama? I have a few theories.

Theory number one: he's not the socialist. Socialism, we recall, is when the government takes over the ownership of businesses. An example would be if the government told the largest banks in the country that they were going to buy an ownership stake in their businesses and the banks were going to say thank you very much. Oops! OK, both Obama and McCain voted in favor of TARP but McCain hated it more.

Theory number two: the voters have an amazing sense of fairness. They are upset that people who are richer than them, while mostly getting larger tax cuts in terms of dollars, may actually get a smaller tax cut measured by percentage. This makes sense because I notice that lately a lot of goods are being priced in percentage of income instead of in dollars.

Theory number three: McCain thinks voters are really stupid. When it comes to tax policy, they want a commander-in-chief, not a redistributionist-in-chief. They don't need a president to redistribute the wealth- the economy is already doing that. Since 1999, median household incomes have declined approximately $2,000. Meanwhile, the rich have had a very different experience. In 1980, the top 1% of households received about 8.5% of all income (AGI). By 2006 they were raking in over 22% of all income. Working stiffs just need somebody to keep them safe. They can get poor on their own.