Yesterday, during an event at the Tax Policy Center, Sen. John McCain’s (R-AZ) senior economic adviser Douglas Holtz-Eakin repeated the false claim that McCain’s economic proposal has “no tax cuts anywhere for the wealthy”:
And what Sen. McCain has tried to do is to keep the kinds of taxes that would effect small business where they are…Top rate right now is 35 percent. Under John McCain, 35 percent. Dividends 15 percent, John McCain 15 percent. Capitol gains 15 percent, John McCain 15 percent. No tax cuts anywhere for the wealthy. Instead a tax policy that maintains the ability of small business…to do what they’re doing right now…
Senator McCain’s tax cuts would primarily benefit those with very high incomes, almost all of whom would receive large tax cuts that would, on average, raise their after-tax incomes by more than twice the average for all households. Many fewer households at the bottom of the income distribution would get tax cuts and those tax cuts would be small as a share of after-tax income.
Indeed, the report goes on to claim that “McCain’s proposal would make the tax system even more regressive than the system created by the 2001–06 cuts”:
– Households in the top 1 percent of the income distribution would receive average increases in after-tax income of more than 8 percent, in addition to their large benefits under the tax legislation already enacted this decade.
– Households in the middle of the income distribution would receive an additional 1.4 percent increase in after-tax income, on average.
– Those at the bottom would receive tax cuts averaging just 0.6 percent of income.
Thus, if Holtz-Eakin can’t find the tax cuts for the wealthy “anywhere,” he’s not looking hard enough.