On Saturday night, the McCain campaign told Politico.com that it was planning to unveil "new economic plans" that included temporary tax cuts on capital gains. Politico incorrectly noted that this proposal, which benefits the wealthy, would be "aimed directly at the middle class."Brad DeLong spotted the problems with McCain’s proposals, saying that “the middle class doesn’t collect capital gains, or dividends, in any material amount. Indeed, that’s what makes you middle class–that even though you have a fair or a good income you work for it.”
McCain has already made it abundantly clear that he plans to craft his economic proposals around aiding the wealthy, corporations, and bankers who made bad loans. In that light, these new proposals would actually fit in rather well.
On Sunday morning, Sen. Lindsey Graham said McCain was planning "a very comprehensive approach to jump-start the economy, by allowing capital to be formed easier in America by lowering taxes."
But by Sunday night, the McCain campaign - in a sign of "internal confusion" -- was telling the New York Times that they "would not have any more proposals this week."
On Monday, Barack Obama announced "a new economic rescue plan Monday geared toward middle-class voters." McCain didn't announce anything, which "caused some head scratching."
And now, on Tuesday, McCain is unveiling his new proposals, going back to the well of tax cuts for the rich. McCain will announce plans to "cut the capital gains tax on stock profits in half, from 15 percent now on stocks held a year or longer to 7.5 percent -- a $10 billion proposal." The Wonk Room's James Kvaal noted the impact of cutting capital gains:Households earning less than $50,000 a year collected a mere 2.5 percent of capital gains in 2005, according to the Tax Policy Center. Families earning more than $1 million a year collected 59 percent of capital gains. Moreover, most middle-class families with capital gains hold their investments in retirement accounts shielded against capital gains taxes.
For a candidate already promising $175 billion tax cut for corporations, including $4 billion for oil companies, handing out a new tax cut for millionaires and calling it a "Pension And Family Security" plan is oddly appropriate.
