IT'S TIME TO THINK BIG ON TAX CUTS
October 9, 2008
Sen. John McCain (R-Ariz.) should refocus his campaign with a new tax plan, a plan for an alternative, optional flatter tax system that supports a tax system with just two rates, 10 percent and 25 percent, compared to the six rates of the current code, which range from 10 percent to 35 percent, say columnist Jack Kemp, and Peter Ferrara, of the Institute of Policy Innovation.
An alternative tax system would cut income taxes and tax rates for every American who pays taxes, imposing no income taxes on the poor and "the working class" (the bottom 40 percent of income earners who don't pay federal income taxes) and eliminating federal income taxes on the middle class, explain Kemp and Ferrara.
- The new tax system would allow most Americans to file their taxes on a single sheet of paper, saving them the hundreds of dollars they spend to have their taxes professionally prepared.
- If implemented, it would also jump-start the economy; savings would increase and investment would soar as capital around the world is drawn to a suddenly more confident U.S. economy, thus, ending the credit crunch and allowing old businesses to expand and new ones to start.
- Wages would grow, along with the overall economy.
- With a strong dollar, the Fed would be under less pressure to try to revive the economy through monetary policy giving McCain the flexibility to push for a new "price rule," which would base monetary policy on prices of a basket of commodities, including gold.
By adopting an alternative tax policy, McCain would have a better chance at beginning to restore economic growth, say Kemp and Ferrara.
Sen. Barack Obama (D-Ill.), by contrast, offers tax increases on savers, investors, small business, employers, and other job creators, a trillion dollar plus spending increase, and new regulatory burdens. His plan has no prospect of restoring economic growth. It will only do the opposite, say Kemp and Ferrara.
Source: Jack Kemp and Peter Ferrara, "It's Time to Think Big on Tax Cuts," Wall Street Journal, October 8, 2008.
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