- The Washington Times - Thursday, January 20, 2000

John McCain is spreading disinformation about George W. Bush's tax-cut plan that needs to be rebutted. If the Texas governor doesn't set the record straight, he is going to suffer the consequences in the primaries and maybe in the general election.

Playing the liberal class-warfare card as deftly as Bill Clinton or Dick Gephardt, the left-leaning Arizona senator is telling voters the Bush tax-cut plan is principally for the rich, that it does nothing for low-income people, and that it doesn't deliver one dollar to help save Social Security.

In fact, one of the plan's largest components is its proposal to cut taxes for those in the bottom income bracket. Unlike Mr. McCain's plan, which simply raises the income threshold in order to put more people in the bottom 15 percent tax bracket, Mr. Bush would create a lower 10 percent rate to help lower-income people trying to get into the middle class.

Even the liberal Citizens for Tax Justice says Mr. Bush would give more tax benefits to those among the lowest 60 percent of income earners than Mr. McCain's plan would do.

Do those in the upper brackets get a lot of tax savings from Mr. Bush's plan? Sure, because he cuts all the rates and most of the taxes come from the top 10 percent of taxpayers. More than that, he reduces the number of tax brackets, simplifying and flattening the tax system by taking five rates and shrinking them to three, while adding a new 10 percent bottom rate.

Thus, under his plan, the current five-rate structure of 15, 28, 31, 36 and 39.6 percent would be replaced with four lower rates: 10, 15, 25 and 33 percent essentially rolling back the Clinton tax increases.

Mr. McCain cuts none of the income-tax rates. He is sticking with the liberal anti-tax cut Concord Coalition's view that the rates should be kept right where they are to keep more money flowing into the U.S. Treasury to pay down the public debt which is being cut anyway.

But Mr. McCain still isn't satisfied with the amount of money the tax system is taking from us. He would eliminate $150 billion in a variety of business tax credits, deductions and other breaks enacted to create jobs and meet payrolls. Thus his $237 billion tax cut would deliver a paltry net tax cut of $86 billion. "It's horribly insignificant," says chief budget analyst Scott Hodge at Citizens for a Sound Economy.

Meantime, Mr. McCain repeatedly says in the debates the $483 billion Bush tax cut, which would be phased in over five years, does not set aside a single dollar to shore up Social Security. This is not true. Social Security payroll taxes are now projected to bring in $1 trillion more than is needed to pay for current benefits over the next 10 years. Mr. Bush's tax cuts which would be entirely drawn from non-Social Security, general-fund surpluses would plow all of that $1 trillion into debt payment to build up the program's re-sources to meet future benefits.

The non-Social Security surpluses that come from business and personal income taxes were also expected to total $1 trillion over the next decade. But it now appears they are going to be even higher than that as a result of strong economic growth. When the Congressional Budget Office's projections come out later this month or in early February, we could be looking at another $1 trillion in general-fund budget revenues.

In other words, the combined surpluses over the next decade will likely total $3 trillion. What Mr. Bush is saying, and what Mr. McCain rejects, is that a good chunk of this should be given back to the American people who earned it through lower tax rates to ensure that the economic expansion continues.

The truth is that while Mr. McCain uses Democratic rhetoric to bash Mr. Bush's relatively modest tax-cut plan as "too big," "too risky" and "benefiting the rich," the fact is that the Arizona senator is against it because he is against cutting tax rates.

Once again, his plan does not reduce a single income-tax rate. A single mom with two kids who is struggling to work her way up into the middle class, and who is in the bottom 15 percent bracket now, would remain in that bracket under Mr. McCain's plan. She would pay what she is paying now. What many GOP officials fear is that Al Gore and the Democrats will use Mr. McCain's demagogic, anti-tax-cut rhetoric against Mr. Bush in the fall just as they used George Bush's "voodoo economics" attacks against Ronald Reagan's tax-cut plan in 1980.

Mr. Bush's tax-cut plan is not too big. Indeed, it is shrinking as the surpluses grow larger. It is not too risky. The risk lies in keeping the money in Washington for bureaucrats to spend. And one of its biggest, fairest features is that it would help lift up low-income people in the bottom tax brackets.

Donald Lambro, chief political correspondent of The Washington Times, is a nationally syndicated columnist.

Copyright © 2019 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times welcomes your comments on Spot.im, our third-party provider. Please read our Comment Policy before commenting.


Click to Read More and View Comments

Click to Hide