Today, Sen. James Inhofe (R-OK) visited the Tahlequah Daily Press in order to outline a new “six-point economic plan,” which he claims will “get our economy back on track.” Remarkably, Inhofe managed to pack into one economic outline multiple ways in which to cut taxes for the wealthy, while proposing little to aid the rest of Americans. Here is how Inhofe hopes to save the economy:
- Make the 2001 and 2003 tax cuts permanent.
The Center on Budget and Policy Priorities (CBPP) notes that permanently extending all of the Bush tax cuts would cost $3.8 trillion over ten years. 22 percent of the benefits from this would go to those making over $1 million, and 31 percent go to the top 1 percent of households. Meanwhile, the bottom 60 percent of taxpayers would see 12 percent of the benefit.
- Incentivize savings by relaxing limits on IRA contributions.
There are tax advantages to investing through an IRA because contributions “are tax-deductible, and accumulations within the accounts occur on a tax-free basis,” so investment strategists note that “it is normally best to try and make the maximum annual contribution.” But the CBPP has noted that “only about 5 percent of those eligible for IRAs contribute the maximum amount,” and raising limits on contributions would “swell deficits” while “doing little or nothing to assist low- and moderate-income households to save more for retirement.”
- Promote investment by eliminating the capital gains rate and repatriate foreign earnings.
As the Wonk Room noted when Sen. John McCain (R-AZ) proposed a temporary cut in the capital gains tax, the benefits from such a cut go overwhelmingly to millionaires. As the Tax Policy Center pointed out, “75% of the benefit of low taxes on capital gains and dividends already go to those making $600,000 or more. Half goes to those making $2.8 million or more.”
With this outline, Inhofe is proposing some of the same fixes for the economy that conservatives put forth when debating both the $700 billion economic bailout bill (before and after it initially failed to pass the House) and the economic stimulus package. For conservatives, it seems, there’s nothing that a tax cut for the rich won’t fix.