McCain Economic Advisor on McCain’s v. Obama’s Tax Proposals

Did someone feed truth serum to Douglas Holtz-Eakin:

“The choice in this election is stark and simple,” John McCain said at recent Denver event, repeating a phrase that is a staple of his stump speech. “Senator Obama will raise your taxes. I won’t.” Seems clear enough, right? It’s an old argument you already know — Republicans cut taxes, Democrats raise them. Except it’s not true, at least not in the way that it seems. But don’t take my word for it. Here is Douglas Holtz-Eakin, McCain’s chief economic policy adviser. “I used to say that Barack Obama raises taxes and John McCain cuts them, and I was convinced,” he told me in a phone interview this week. “I stand corrected.”

So McCain’s own economic advisor is saying McCain’s attack rhetoric on this issue is full of it. There’s more to this story by Michael Sherer:

But don’t expect McCain to change his rhetoric on the stump. That’s not how this game is played. On Wednesday, the Obama campaign put out a press release claiming that McCain’s economic plan was “$2.8 trillion more expensive than his advisers previously admitted.” These were ominous words, playing into the old storyline about Republicans using budget gimmickry. But it is largely based on an interpretation of a tax plan — for an optional alternative income tax system with a flat rate — that McCain has never described in detail, let alone with enough specificity to gauge. And it uses a budgetary scoring system that the Obama campaign rejects in calculations of its own proposals.

If Obama is saying McCain has turned into the double talk express and that his proposals if enacted would increase an already large Federal deficit – great. But let’s be honest. Although Obama’s proposals if enacted would not be as much of a fiscal train wreck as what McCain is suggesting, this is not exactly the fiscal austerity that this deficit hawk has been preaching:

It takes some serious work to figure out what they are actually getting at. Neither candidate has laid out an actual plan, with specific numbers, to bring America’s fiscal house into order. They do, however, offer plans that differ strikingly from each other. McCain’s tax plan benefits mostly those in higher income brackets, while Obama’s plan benefits mostly those in lower and middle income tax brackets. McCain wants a tax cut for corporate profits, while Obama has proposed a whole host of tax cuts that will benefit those in the middle-income brackets. Both candidates have new spending programs, though Obama appears to have more. And both candidates say they will cut spending elsewhere, though they fail to provide many specifics about how.

Once we factor in the deferred taxes from deficit financing, I doubt middle class Americans will see a long-term tax break regardless of who becomes our next President. But if McCain becomes President, it does appear that higher income individuals may see lower taxes, which means the average Joe will see higher taxes in the long-run.