In the high-stakes presidential poker game, which, by the way, is being played with the ultimate house money — ours!, GOP candidate John McCain has seen his opponent’s economic plan and raised him.
McCain’s move today was in response to Democratic nominee Barack Obama’s revised economic proposal announced Monday.
The Republican reiterated his call to spend $300 billion of the $700 billion bailout package
to buy troubled mortgages and exchange them with fixed-rate home loans. His previous proposal to suspend required minimum IRA distributions for a while to allow the market turbulence to subside also is still in his latest economic package.
In addition, the Arizona Republican would:
- Cut the tax rate to 10 percent on the first $50,000 withdrawn from IRA and
401(k) retirement accounts for the next two years.
Under current tax law, money taken out of these tax-deferred accounts is taxed at ordinary income tax rates, which could be as high as 35 percent. - Allow up to $15,000 in capital losses to be written off against ordinary income. Currently, the limit is $3,000.
- Cut the top tax rate on long-term capital gains in half for two years. The current rate is 15 percent, so it would drop to 7.5 percent through 2010.
- Exempt unemployment benefits from taxes for two years.
Unfortunately for McCain, some of his party’s more conservative members aren’t too excited about his latest economic revival effort.
Debate prep: Expect to hear more from both McCain and Obama when they square off for their final formal debate tomorrow night.
Get the official words on each plan at the Obama and McCain Web sites.
And see how the two revised plans stack up against each other at:
- Candidates’ Economic Plans Compared from the BBC
- What Obama and McCain’s New Plans Mean for You from U.S. News
- McCain and Obama Stimulus Plans: The Good, Bad, and Ugly from TaxVox
- McCain, Obama Agree on Some Economic Strategies from ABC News
One important thing to remember: All of these proposals are, at this point, just that.
Given the state of the economy and what it might look like when the new president, whoever that might be, takes office, it’s no sure thing which of these ideas will even be considered, much less enacted.
Taxrascal
Interestingly enough, Obama is the poker player. McCain likes dice: http://www.huffingtonpost.com/2008/09/29/the-dice-thrower-vs-the-p_n_130427.html
Stephen Cataldo
McCain’s proposal to “spend $300 billion of the $700 billion bailout package to buy troubled mortgages” is just strange: seems like economics as the liberals used to practice it in the 60’s and 70’s. Helps the worst investors the most, as well as the least responsible home purchasers. Taxpayer lose big time (much worse than by purchasing equity), markets are ignored — if you want to help homeowners, buy the mortgages at their market rates and then let them off the hook. It would also be complex, therefore slow. All of Europe seems to know what to do about the credit crunch: take over failed banks, and partially take over failing banks (some variant of equity for cash) at market values.
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