Posted on 04/15/2008 9:18:38 AM PDT by BJClinton
PITTSBURGH - John McCain called Tuesday for the federal government to free people from paying gasoline taxes this summer and ensure that college students can secure loans this fall, proposals aimed at stemming the public's pain now from the troubled economy.
In the longer-term, the certain Republican presidential nominee said he would double the tax exemption for dependent children and offer people the option of choosing a simpler tax system.
"We know from experience that no serious reform of the current tax code will come out of Congress, so now it is time to turn the decision over to the people," McCain said in a sweeping economic speech at Carnegie Mellon University a week before Pennsylvania's primaries.
To help people weather the downturn immediately, McCain urged Congress to institute a "gas-tax holiday" by suspending the 18.4 cent federal gas tax and 24.4 cent diesel tax from Memorial Day to Labor Day. He also renewed his call for the United States to stop adding to the Strategic Petroleum Reserve and thus lessen to some extent the worldwide demand for oil.
Combined, he said, the two proposals would reduce gas prices, which would have a trickle-down effect, and "help to spread relief across the American economy."
Addressing the feared fallout of the ongoing credit crunch, McCain also said the Education Department should work with the country's governors to make sure that each state's guarantee agency — nonprofits that traditionally back student loans issued by banks — has both the means and the manpower to be the lender-of-last-resort for student loans.
Lawmakers, students and financial experts are worried that the credit crisis might make it more difficult for students and their families to find loans. Nearly two dozen lenders have dropped out of the federally backed student loan program.
Students, McCain said, "should not be denied an education because the recklessness of others has made credit too hard to obtain."
Among other proposals, McCain said he would:
_Require more affluent people — couples making more than $160,000 — enrolled in Medicare to pay a higher premium for their prescription drugs than less-wealthy people.
_Raise the tax exemption for each dependent child from $3,500 to $7,000.
_Offer people the option of choosing a simpler tax system with two tax rates and a standard deduction instead of sticking with the current system.
_Suspend for one year all increases in discretionary spending for agencies other than those that cover the military and veterans while launching an expansive review of the effectiveness of federal programs.
Obama campaign spokesman Bill Burton said McCain's proposals offer "no change from George Bush's failed policies by going full speed ahead with fiscally irresponsible tax cuts for the wealthiest Americans," and amount to "a gift basket of new tax cuts for corporate America at a time when some CEOs are making more in a day than some workers make in a year."
The four-term Arizona senator packaged the fresh proposals with long-standing positions in a wide-ranging economic speech on Tax Day in which he faulted not only Democrats but also fellow Republicans for failing to practice prudent spending and fix pricey entitlement programs.
"In so many ways, we need to make a clean break from the worst excesses of both political parties," McCain said, adding "somewhere along the way, too many Republicans in Congress became indistinguishable from the big-spending Democrats they used to oppose."
He also argued that Democratic rivals Barack Obama and Hillary Rodham Clinton would impose the single largest tax increase since World War II by allowing tax cuts enacted in 2001 and 2003 — and that McCain voted against but now wants to make permanent — to expire.
"Both promise big 'change.' And a trillion dollars in new taxes over the next decade would certainly fit that description," McCain said. Playing on the title of an Obama book, McCain added: "All these tax increases are the fine print under the slogan of 'hope:' They're going to raise your taxes by thousands of dollars per year — and they have the audacity to hope you don't mind."
The speech was part of McCain's ongoing effort to counter the notion — fueled by his own previous comments — that he's not as strong on the economy as he is on other issues. He also sought to fend off criticism from Democrats, including Obama and Clinton, that his small-government, free-market stances don't mesh with people feeling the pinch — particularly those hurting now.
He made his remarks a day after he said he believes the country has already entered a recession, a label the Bush administration has resisted even as a credit crisis, a housing slump, soaring energy costs and rising layoffs combined to soften the economy.
The speech also came the same morning the Labor Department reported another worrisome sign for the economy: Inflation at the wholesale level soared in March at nearly triple the rate that had been expected as the costs of energy and food both climbed rapidly. Oil prices hit a new high, rising over $112 a barrel for the first time.
More social(ist) engineering nonsense.
Laughing too hard to comment
The first one, yes. But the per-child deduction increase is a substantial tax cut. We need to replace the tax code but this is an improvement.
These proposals will play well in Peoria.
Words are insufficient to describe the extent of his projection. He’s nuts. He doesn't call or vote for pork but just damn! He - is - nuts.
John McCain should advocate drilling in ANWR, drilling offshore, drilling inland, building refineries and building nuclear plants. Then he should tell the foreigners to keep their oil.
Suspending the gas tax is actually a pretty good political proposal. The Al Gore wing of the left would oppose it on “global warming” principals alone. It would help to split them off from the working stiffs.
Garde la Foi, mes amis! Nous nous sommes les sauveurs de la République! Maintenant et Toujours!
(Keep the Faith, my friends! We are the saviors of the Republic! Now and Forever!)
LonePalm, le Républicain du verre cassé (The Broken Glass Republican)
Ah... suspending the gas tax, making gasoline cheaper, distorting the supply/demand/price trio.
This guy is TRULY CLUELESS.
What happens to demand when price decreases?
Ah, then the supply goes down, and the price goes back to where it was.
I don’t like the idea at all:
1) the gas tax is the only really fair tax we have — it’s a consumption tax that is used, largely, to build and sustain the very highways on which the fuel is spent;
2) when the other shoe drops, and the tax is re-instated, it will have a very negative shock-effect.
I’m curious. . .Which of the proposals in this article is ticking you off and why?
That point is true. You pay for what you use. Still, the government is skimming far too much from the efforts of the oil companies while taking no risk. The government doesn't even properly apply the revenues to building and maintaining the road infrastructure.
Suspend the stinking medicare tax. It is nothing but wealth redistribution. The gainfully employed are saddled with funding subsidized healthcare for the elderly.
I love the per-child deduction increase idea; I have 4 children!
Those who drive electric cars or use vegetable oil in their cars and pay no gas taxes will complain the loudest.
Given that those earning that much in retirement probably maxed out the contributions during their wage earning years - how much more progressive can it get? The principle should be some pro rata share - since it would be hard to imagine that those retirees who are in households withe $160K+ incomes have some greater propensity to need prescription drugs than those with $159,999.17 in annual household income. McCain needs to get a clue on economics and soon.
What next? Will he propose the opening of new oil fields to the oil companies? ANWR?
Pure socialism.
So you oppose cutting or suspending the gas tax???
McCain said he knows very little about how the economy works. If gas prices are truly driven by market pressures, removing the taxes would be expected to have little effect on the price at the pump. And too, even if (and it’s a very big “if”) retailers and wholesalers actually passed the savings toward the consumers, increased demand would drive the cost right back up. It’s an idea not well thought out.
“he would double the tax exemption for dependent children”
That’s not an improvement for me! I’m single, no kids, and self-employed. Guess I’m screwed again! Pay for your own kids!
Oh, it is just the "Principled Conservative Thumb-Suckers" still whining that they didn't get their way in the primaries.
No, I think he just opposes John McCain saying or doing anything that makes sense.
I think much of that tax has been siphoned off to general revenue, which is why our bridges and highways are falling apart.
Carolyn
Yeah, looks like McCain Derangement Syndrome. Leads to conservatives opposing tax cuts.
And none of your customers have kids? Get used to some favoritism towards families. It's a political reality and not that big a deal. I am self-employed without kiddies, but I can see how anything that helps the overall economy helps my customer base which in turn helps me.
It would also allow McCain to separate himself from the GW highpriests.
So McCain wants to institute a process for national referendum? It's bad enough that most of the states allow the fox to tell the chicken what's for dinner, a national referendum system will bring this country down PDQ. This is antithetical to what the republic was built upon, and the founding fathers must be pounding on their coffin lids.
Very true, however, I got the impression from the article that these were 'stop gaps' to relieve tax pressure on tax payers while he works out something more permanent.
My impression could be wrong, but that's what this quote from the article sounds like to me: "In the longer-term, the certain Republican presidential nominee said he would double the tax exemption for dependent children and offer people the option of choosing a simpler tax system."
Today’s not a good day to bug me! I just wrote two more checks! Off to the PO!
It’s my money up until the last minute of the deadline. Now it’s theirs to waste. If they would have stayed within the Constitutional restraints, they wouldn’t need so much, and what’s being discussed wouldn’t be necessary!
It's a step in the wrong direction. It shifts an even higher percentage of the tax burden toward higher income earners.
It's more wealth redistribution.
We need broad based tax cuts, not political pandering through the tax system.
And yes I do have kids and would benefit from an increase in the per-child deduction. It is still a bad way to go about tax relief.
McQueeg knows perfectly well that congress will not suspend the federal gas tax. Good political ploy however.
So you're saying that his political pandering and wealth redistribution is effective, and that your support can be bought at the expense of others?
It increases
Ah, then the supply goes down,
Not unless the supply of gas is perfectly static, which it is not
and the price goes back to where it was.
But in this case a tax has little effect on the supply of gas as the cost of the tax is mostly born by the consumers (us). Thus an elimination of the gas tax will show little decrease in supply. Yes, demand will go up. Supply may also increase to match the demand, though because it occurs during the summer supply already increases becauses of the increase demand expected during the summer months. Any further increase would depend on how elastic (flexible) the supply of gasoline is.
In the end, McCain's proposal would likely not lead to an increase as you so cluelessly suggest.
Pure democracy will destroy our republic in the blink of an eye...
If we want this republic to have a future, we need to eliminate disincentives for the middle class having children.
Obama regards anybody who has a car as being one of the "wealthiest Americans"
Nope, I’m all for “starving leviathan”,
but my point is that if the price goes down, consumption will increase, and the reason the prices go up in the summer anyway is because of the increased consumption and limited supply (due to refining capacity),
so, prices will probably rise to their pre-tax-holiday levels anyway.
Sounds a lot like how we got this horribly complex tax code that politicians use to pander to special interest groups.
Figure this out.
U.S. consumes 20 mil barrells of oil ea day
A 42 gal barrel of oil makes about 20 gal of gas (let’s exclude diesel to keep it simple)
Breaks down to about 400 mil gallons of gas consumed ea day
Feds make 18.4c per gallon consumed
400mil X 18.4= 7,360,000,000 per day
Do you really believe they are spending all this money on roads, etc.? hahahahahahahahaha
Woohoo! This means I’m a “wealthiest American”!
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