The recession economy and the financial crunch are front and center. Folks are asking: Can I get a loan? Will I have a job? Can I keep my house? Unfortunately, Sen. McCain's message overemphasizes government spending cuts, almost to the exclusion of stimulative and expansive tax cuts. This just doesn't seem like the right time for a government spending freeze, at least to the exclusion of other pro-growth policy levers. Sounds like too much root canal. More like Bob Dole than Ronald Reagan.
That's why McCain needs to stress that tax hikes of any kind would be a total disaster during this economic emergency and that letting folks keep more of what they earn is a recovery prescription. He needs to emphasize the need for across-the-board tax cuts for individuals and businesses. Lower marginal tax rates will reward work, investment and risk-taking. They also will put money in people's pockets as they keep more of what they earn.
McCain can point to Paul Ryan's modified flat tax with two brackets of 15 percent and 25 percent. That would be a great message. This is an economic emergency, and it calls for strong medicine. This is not the time to take away tax cuts. It's a time to add them. And reducing marginal tax rates would add substantially to taxpayer benefits on a permanent basis with new incentive rewards.
McCain should next talk about a corporate tax cut from 35 percent to 25 percent as a means of boosting jobs and wages. He should note that study after study shows that roughly two-thirds of the benefit of a corporate tax cut goes to the workforce. A corporate tax cut also is pro-investment and will make this country more competitive. But the key point is that a lower corporate tax rate is a job-creator. McCain must explain that you can't have jobs without healthy businesses that are funded by investment.
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