In his acceptance speech last night before the Republican National Convention, Sen. John McCain (R-AZ) set forth a tax proposal that he claimed “will create jobs“:
Keeping taxes low helps small businesses grow and create new jobs. Cutting the second highest business tax rate in the world will help American companies compete and keep jobs from moving overseas
A job-creating economic plan is supremely important now that the Bureau of Labor Statistics has released new numbers showing that unemployment is at a five-year high of 6.1%. Last week alone, “the number of U.S. workers filing new claims for jobless benefits jumped by 15,000.”
But if McCain wants to create jobs, cutting the corporate tax rate isn’t the place to start. According to the Congressional Budget Office, a corporate tax cut “does not create an incentive for [corporations] to spend more on labor” and “is not a particularly cost-effective method of stimulating business spending.”
As the Wonk Room has previously shown, cutting the corporate rate (which is only the world’s second highest on paper) would just lower America’s already below average corporate tax revenue. The Center for Economic & Policy Research co-director Dean Baker has said that “it doesn’t make any sense” to say that corporate tax rates are strangling the economy.
McCain, though, has thrown his chips in with the Bush economic philosophy, which has left the working and middle class behind. In fact, as McCain accepted his nomination, news headlines screamed of what Wonkette called an “economic collapse“: payrolls and stocks down, foreclosures and credit-market writedowns up.
Job growth in the eight years before Bush came to office was significantly better than in the eight years since. But to McCain, the Bush-Norquist agenda of tax cuts for corporations takes precedence over anything aimed at the anyone else.