The highly respected Tax Policy Center (TPC) has posted a new side-by-side analysis comparing the McCain and Obama tax agendas. If accurate, this post indicates that the McCain team has described to TPC policies that differ dramatically from policies that remain on McCain’s website and, in one instance, were reiterated by McCain just yesterday.
Alternative Minimum Tax. Yesterday, McCain said he supports “a phase-out of the Alternative Minimum Tax.” His website still says he will “permanently repeal the AMT.” TPC says, however, that McCain wants to “[e]xtend and index 2007 AMT patch, further increase exemption by 5 percent in excess of inflation after 2013 (temporarily).” That’s relief from the AMT, but well short of “permanent repeal” or “phase out.”
Corporate Expensing. McCain’s website still features his proposal “to permit corporations to immediately deduct the cost of equipment investment, providing a valuable pro-growth investment incentive.” That is enormously costly. In a fact sheet also still available on the website, the McCain campaign compares this proposal to a “modest” partial expensing measure scored by the Treasury Department as costing $1.2 trillion over 10 years. But TPC says that McCain is now proposing only to “allow first-year deduction of 3 and 5-year equipment,” and that McCain also wants a complementary repeal of the interest tax deduction. The TPC also says that McCain’s proposal “expires.” With these modifications, the proposal’s cost will be less than 2% of the proposal that McCain once deemed “modest.”
Substantively, these changes are mostly (modest) moves in the right direction — although they also show McCain manipulating phase-ins and phase-outs just as President Bush has done for the last eight years. But our first question is: What is the McCain policy–what’s on their website, or what they seem to have told TPC?