My Tax Policy Analysis

OK, back to issues. It's time to move away from Sarah Palin's meteoric rise from inexperienced backwater mayor to inexperienced backwater vice presidential candidate. Though she'd be a lot more likely to see action in the Oval than Biden would be, it's not likely either presidential candidate will need to call on a VP (that said, a fair number of Presidents have left office mid-term, two died of illness, one resignation, and four assassinations come to mind). And McCain would be the oldest president ever sworn in, and by all indications he's already started slipping mentally on the campaign trail.

ANYWAY, back to issues. Specifically, tax policy. No one really pays close attention to it, but it's important. According to the non-partisan and well-respected (even by economists) Tax Policy Center, both McCain's and Obama's tax plans would increase the deficit. McCain's would increase it by around 4.2 trillion dollars over 10 years, while Obama's would increase it by 2.9 trillion over the same period. That's 1.3 trillion dollars worse for McCain.

These projections hold a lot of things constant and make a lot of assumptions, but the biggest one is that the 2001 and 2003 tax cuts expire in 2010. Now, Obama has said he wants to keep those cuts for lower-income people, which won't have too big an impact since those cuts don't really affect low-income people all that much (they were targeted at the rich). But Obama wants those Bush cuts gone for the most parts. McCain wants to make them permanent. Which would increase the deficit gap between the plans.

I was going to stop there, but a conversation I had yesterday convinced me to to mention one more thing, and it's probably going to be a common response to my points about the tax plans: there's an argument out there that McCain's going to cut programs to pay for his expensive tax cuts.

McCain has certainly hinted that he'd like to do something in the vague ballpark of that, and he's railed against excess spending, but consider this: researchers at the Annenberg Public Policy Center at the University of Pennsylvania (among the world experts in political communication and certainly at least as engaged with a presidential election as anyone) can't find a single example of a program McCain has said he would cut. Not once has he said "If I were president, I'd eliminate (blank)." For all of the out of control spending, there isn't any of it McCain would undo. So basically, he just wants to drive up a huge deficit. Even Obama has mentioned more expenditures he'd like to roll back on (like the hundreds of billions of dollars we're spending in Iraq, or Bush tax cuts for those making over 603,000 dollars a year that we can't afford).

It's also worth noting that even though McCain hasn't named a single program he plans to eliminate should he become president, he has said he'd favor the elimination of the Departments of Education and Energy, which handle what will surely be two of the most vital issues of the next fifty years.

When it comes to tax policy (not to mention budget policy), McCain is lost in the woods and has no idea what the macroeconomic ramifications of his dogmatically bad plan would be.