Last week, the McCain campaign reaffirmed its proposal to allow companies to immediately deduct the full cost of equipment and technology purchases. The campaign claimed that this proposal has “negligible costs over time,” while the Center for American Progress Action Fund disagreed and put the cost at $75 billion a year based on information from Treasury and CBO (more here, here, and here).
Today, the Wall Street Journal weighs in:
[McCain’s] campaign also says there is no cost to a proposal regarding the tax treatment of capital expenses. Outside experts put the cost at tens of billions of dollars a year.
Under that plan, the federal government would take an upfront tax hit and be forced to pay additional interest on a larger national debt, said Ronald Pearlman, a tax professor at Georgetown Law Center and assistant secretary for tax policy under President Reagan.
To say there is no cost to the government is “so intellectually dishonest it’s outrageous,” Mr. Pearlman said. Mr. Bounds, the McCain spokesman, responded: “Clearly there is a difference of opinion here.”
The WSJ provides this handy chart detailing the McCain’s failure to account for his spending: