Under McCain Taxes will go UP

SmellingTheCoffee · Posted: Thu Jun 05, 2008 11:43 am Post subject: Under McCain Taxes will go UP

• McCain seems to say that he can save $100 billion by cutting out earmarks. But budget experts say that cutting earmarks would actually save very little. And questioned more closely, McCain's campaign now says that his planned savings have nothing to do with eliminating earmarks.
• With earmarks out as a potential source of savings, McCain hasn't said what he'd cut out of the discretionary budget to get to $100 billion. He's even indicated that defense spending might increase. If defense spending is off the table, saving $100 billion would require 18.5 percent across-the-board cuts in every other discretionary program, including things like elementary and secondary education, veterans' health benefits and highway construction. The alternative would be severe cuts in a few programs, as yet unnamed.
• McCain says that "just in the last few years" the government has puffed up "by 40 percent, by trillions." Actually, it has taken federal spending a decade to grow 40 percent, and even longer to grow by "trillions." In inflation-adjusted dollars, federal spending is projected to come to $2.45 trillion in fiscal 2009, including $1.4 trillion for Social Security, Medicare, military spending and veterans programs. The last time the budget was "trillions" smaller was 1951.

http://www.factcheck.org/elections-2008/the_budget_according_to_mccain_part_i.html

• McCain says that eliminating the Alternative Minimum Tax will save "more than 25 million middle-class families more than $2,000 every year." But McCain's "middle class" includes families making up to $200,000 per year, and the $2,000 figure is an average. Those earning more money will see the lion's share of the savings. McCain also leaves out the fact that the proposal could cost as much as $1.6 trillion over 10 years.
• By the measure most economists prefer, McCain is wrong in his claim that Sens. Clinton and Obama want to implement "the single largest tax increase since the Second World War;" it would be the fifth largest. At a more basic level, it's misleading to tag Clinton and Obama for something that was scheduled during the Bush administration – the expiration of the 2001 and 2003 Bush tax cuts, which by law will occur at the end of 2010.
• McCain also repeats the mantra that cutting the capital gains tax rate will increase government receipts. In fact, rate cuts produce a spike in revenue, but it's only temporary. McCain also falsely claims that higher capital gains tax rates will affect 401(k) plans.
• McCain was the first to announce the now widely discredited proposal to suspend federal gas taxes. The proposal wouldn't lower prices at the pump and would result in (effectively) an $8.5 billion windfall to oil companies.
http://www.factcheck.org/elections-2008/the_budget_according_to_mccain_part_ii.html

So under a McCain Budget, revenue will be cut along with services to fund tax cuts to the wealthy. But because the “savings” imagined and reduction in costs is limited (especially as military spending is exempt and is expected to increase), it is highly unlikely that the budget can be balanced while funding tax cuts, the Iraq/Afghanistan wars (along with the planned expansion of these wars with corresponding troop buildups), a possible conflict with Iran and an increase in domestic military spending. The reality will be increased deficits and a rising National Debt.

The question is, will the lenders of the world (China, Japan, the Mid-East, et al) continue to lend the US billions of dollars each year at the current low interest rates? It is probable that an increase in interest rates will be necessary in order to dampen inflation, increase the value of the US dollar and to attract foreign investment. But an increase in interest rates will also result in an increase in interest payments necessary to manage the debt. This will further erode the budget creating an even bigger deficit.

The long and short of it is: under a McCain economic plan, tax increases on the majority of tax-payers (ie, those earning less than $200,000 per year) will be necessary along with a roll back of the Bush tax cuts set to expire in 2010.

Get ready for it: Under McCain, your taxes are going up.
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