McCain looks presidential on taxes

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Originally published 12:34 a.m., February 27, 2006, updated 12:00 a.m., February 27, 2006

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Sen. John McCain, who has consistently opposed President Bush's tax cuts, recently voted to extend some of them, a move conservatives say is a political flip-flop intended to further his White House ambitions.

The Arizona Republican, who is the early front-runner for his party's presidential nomination in 2008, surprised tax-cut proponents last week when he voted to continue Mr. Bush's tax cuts on capital gains and dividends and other tax breaks in a $70 billion Tax Relief Extension Reconciliation Act.

His vote was a sharp departure from his anti-tax-cut posture. However, he has been aggressively reaching out to the Republican Party's conservative base, particularly economic conservatives who fear that as president, he would oppose further tax reductions and might even roll back some of the Bush cuts to shrink budget deficits.

While supply-side tax cutters say they welcomed his latest vote, they thought it was solely for political reasons.

"It's a big flip-flop, but I'm happy he's flopped," said Grover Norquist, president of Americans for Tax Reform.

"It looks like a further morphing of McCain into George W. Bush. He's mailing to his list of campaign contributors, and now he's supporting the tax cuts," said economist Larry Hunter, a longtime Republican tax-cut strategist.

"It looks political to me. It runs counter to his whole past behavior. He's got to appeal to the base of the party. I don't think there is a Republican in the land who can get the nomination who voted against the tax cuts," said Mr. Hunter, now a senior fellow at the Policy Institute for Innovation.

"He's certainly not a supply-sider. He doesn't subscribe to the Reagan economic approach that tax cuts stimulate increased growth," he said.

In a statement released by his office, Mr. McCain said he supported the capital gains and dividend income tax-cut extensions because of his concerns about "the leveling of some key economic indicators such as real GDP growth rates."

"American businesses and investors need a stable and predictable tax policy to continue contributing to the growth of our economy. These considerations lead me to the conclusion that we should not reverse course by letting the higher tax rates take effect," he said.

But when Mr. Bush's $1.35 trillion tax-cut bill, the centerpiece of his economic agenda, came up for a final vote in May 2001, Mr. McCain was one of two Senate Republicans to vote "no."

"I cannot in good conscience support a tax cut in which so many of the benefits go to the most fortunate among us at the expense of middle-class Americans who need tax relief," he said at the time.

When the president's $350 billion tax-cut bill that accelerated his earlier tax cuts came up for a vote in May 2003, Mr. McCain voted against that, too, saying he was "very concerned about the deficit."

"He voted against tax cuts in 2001, 2003, 2004 and 2005, and this year he's for the tax cuts in the reconciliation bill. It looks like he did it for political reasons," Mr. Norquist said. "He's got two years to convince people that this is not a political ploy but a 'Road to Damascus' realization that tax cuts are a good idea."

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