John McCain, Tax And Spend Conservative

First posted at The Smirking Chimp, October 1, 2008.

Nobody in the developed world pays less tax than Americans. Nobody complains about it more, either.
Maybe all taxes should be abolished. The conservatives and libertarians would learn a lot the first time their house was burned down by a homeless unemployed firefighter.
But I digress.
If John McCain is elected, the Income and Estate taxes could go up dramatically. Really. No shit.
How, you ask?

Most of the provisions of the 2001 tax bill expire in 2010. A law passed in the early days of the Gingrich Revolution requires that all tax cuts must be offset by spending cuts, or they must expire within 10 years. This would put a President McCain in the difficult position of having to beg a hostile Congress to extend the tax cuts.
Democrats in Congress won't want to be portrayed as "tax and spend liberals", so they will put together a bill that will extend at least some of the provisions of the 2001 bill. But it will come with catches.
Amendments will be tacked on. A reinstatement of the Estate Tax will be included. Clinton and Obama have made that part clear already. Some joker might even propose a universal health care amendment, including a new tax to fund it (I can dream, can't I?).
McCain won't want to be seen as the President who reinstated the dreaded "death tax". He will either have to swallow hard and sign it, or make a stand, and veto it.
If that happens, Congress will take so long to put together another bill, it is very likely that the 2001 provisions will expire. What then?
Some of my colleagues are actually trying to figure out exactly what will be expiring and what will replace it. It's going to take quite a bit of sorting out. We are talking about several hundred pages of the tax code. Believe me, reading a couple of paragraphs could give you a headache.
But this much will definitely happen:
The Taxpayer Relief Act of 1997 was the last tax bill that was paid for with offsetting spending cuts. That means that the tax tables will return to what they were in 1999, which was the last year with rate changes specified by TRA '97. The 5% rate bracket would disappear. The 39.8% top marginal bracket would reappear.
Qualified dividends would no longer qualify for the special 5%/15% rates.
Tax on long term capital gains would return to a maximum of 25%. Currently, the rates are 0%/15%.
The Estate Tax would reappear, with the original rate tables and $660,000 exemption back in place.
Those are some of the highlights. It would actually be a return to a more sensible taxation policy. But it would also be an increase from current rates.
McCain would be forced to accept one increase or the other. He could go down in Republican history as another President who caved in to the Democrats on a tax increase, just like Bush Sr.
At least he hasn't said anything about lip reading yet.
So, get out there and tell all of your wingnut friends, neighbors and family members that John McCain is going to tax the hell out of you! He'll raise taxes and spending even more than Obama!
It's really pretty much sorta true. It definitely has a certain truthiness to it. It's even more honest than one of McCain's campaign ads.
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