JOHN KERRY'S ECONOMIC PLAN
September 24, 2004
John Kerry's economic plan has four key elements: create good jobs, cut middle class taxes and health costs, restore America's competitive edge, and cut the deficit and restore economic confidence.
Economy.com, a respected independent forecasting service, and other experts, say the plan would have very little positive economic effect.
For example, on job creation, Kerry proposes to:
- Reduce outsourcing by closing a tax provision that he believes encourages U.S. companies to invest abroad.
- Use the $12 billion per year in added revenue to reduce the corporate tax rate slightly.
- Reinstate a failed tax credit for new jobs and crack down on imports from China and elsewhere.
On the other hand, Kerry's implied protectionism could be very damaging to economic growth, says Bruce Bartlett.
Kerry's tax plan basically involves extending Bush's tax cuts -- except those affecting the top two percent of taxpayers, whose taxes would be raised to their pre-2001 level. The revenue would pay for a $1 trillion expansion of federal health programs -- which Kerry says will only cost $650 billion because he will cut $350 billion worth of waste and red tape.
He proposes to restore America's competitive edge by increasing government spending for research and development, tax credits to expand broadband service to rural areas and encouraging more women and minorities to study math and science. He would also eliminate the capital gains tax for long-term investments in small business startups.
As a New York Times editorial said, "It's hard to imagine how he could combat the deficit, expand health care benefits, increase spending on education and grant middle class Americans more tax breaks simply by rescinding the Bush tax cuts for those earning more than $200,000."
Source: Bruce Bartlett (NCPA senior fellow), "Big Kerry Plan for Economy: No Plan at All," Investor's Business Daily, September 22, 2004.
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