MCCAIN'S ECONOMIC PLAN
October 16, 2008
Sen. John McCain (R-Ariz.) has revealed his plan to help revive the U.S. economy, which could be facing a recession following the financial crisis. His economic proposals center on more help for homeowners who are facing foreclosure, and he has called for more tax cuts to help investors, retired people and workers, says the BBC News.
- The new tax breaks would cost about $52 billion.
- The new help to homeowners is much more expensive, costing around $300 billion, although McCain says it should be funded out of the $700 billion bail-out package.
The key elements are:
- The U.S. government will buy up distressed mortgages and refinance them at lower values, letting borrowers enjoy more affordable rates.
- A new lower Federal tax rate of 10 percent on the private pension income in 2009 and 2010.
- Expanded tax deductions for investment losses in 2008 and 2009 and a 50 percent increase in the capital gains allowance.
- Tax-free unemployment benefits for two years.
- People with share-based retirement accounts will be allowed to postpone withdrawals until markets improve.
Sen. McCain's plan would follow the $300 billion housing rescue plan passed by Congress over the summer -- but unlike that plan, which requires the banks to write-down the value of distressed mortgages first, he proposes that the federal government would absorb the losses from the sub-prime lending fiasco.
Sen. McCain has attacked the Obama plan for being too expensive and wasting taxpayers' money. His plan is also less targeted at job creation and helping the unemployed and more at preserving the value of assets, both stocks and home values, says the BBC News.
Sen. McCain believes the key to the long-term recovery of the economy is to keep taxes low, so he wants to retain all the tax cuts made by President Bush, and increase tax breaks for companies to encourage investment.
Source: "Candidates' economic plans compared," BBC News, October 14, 2008.
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