Yesterday on the Situation Room, McCain defended the tax practices of the companies of his economic advisers:

…[I]f you talk to the CEO of FedEx, Fred Smith, if you talk to the CEO of Cisco, John Chambers, you talk to Meg Whitman, former CEO of eBay, you know what they’ll tell you? They’ll tell you they pay their full 35 percent…they’re paying 35 percent full freight, no evasions or escapes from the taxes. They’re paying full freight, and they’ll show you their tax returns.

Watch it:

What McCain didn’t mention is that at least two of the companies of his advisers, Fred Smith’s FedEx and Hewlett Packard under former CEO Carly Fiorina, have a history of massive tax evasion.

A 2007 investigation by the IRS found that FedEx owed $319 million in back taxes from 2002 by misreporting its employees as independent contractors. Just yesterday this full penalty was withdrawn on appeal, but an investigation is continuing into their tax returns for 2003-2006. Lawyers for the drivers insist that FedEx could owe up to $1 billion in back taxes.

Similarly, as CEO of Hewlett Packard, McCain adviser Carly Fiorina deferred taxation on $14.4 billion by keeping it offshore. This lowered Hewlett-Packard’s effective tax rate from 35 percent to 12 percent.

America collects only 2.2% of its GDP in corporate taxes because of loopholes, shelters and giveaways, compared to 4% in Ireland (which McCain frequently touts for its 11% corporate tax rate).

Rather than closing the loopholes that let his economic advisers’ companies dodge millions in taxes, McCain’s tax plan would have let them to pay even less: saving FedEx $260 million in taxes and HP $250 million had his tax plan been effect in 2007.

Douglas Holtz-Eakin, an economic adviser to Sen. John McCain (R-AZ), has repeatedly asserted that there are “no tax cuts anywhere for the wealthy” in McCain’s tax plan. During a debate on Bloomberg last night, Holtz-Eakin again said that “there aren’t any tax cuts for the wealthy in this.”

However, when it was pointed out that McCain’s proposal to temporarily cut the capital gains tax would overwhelmingly benefit millionaires, Holtz-Eakin conceded that was a “fair point,” but said he’s “not here to quibble on things like that.” Watch it:

Indeed, this is a very fair point, as the Tax Policy Center found that two-thirds of the benefits from McCain’s capital gains cut would go to those making $1 million or more. Were this proposal enacted, millionaires would get an average tax cut of more than $72,000, while those making less than $50,000 would receive, on average, no cut at all.

However, Holtz-Eakin now needs to acknowledge that the rest of McCain’s plan also significantly cuts taxes for the wealthy. McCain’s tax plan delivers almost half of its benefits to the top 1 percent of taxpayers, and gives the top 0.1 percent a $1 million tax cut. Meanwhile, 100 million middle class households receive no benefit at all.

So it is “fair” to say that McCain’s capital gains cut would only benefit the wealthy, but it’s also “fair” to say that about the rest of McCain’s plan.

An updated analysis of the Obama and McCain tax plans by the Center for American Progress Action Fund finds that John and Cindy McCain would have saved $730,000 over 2006 and 2007 under McCain’s tax plan.

Under Obama’s proposed plan, the McCains would have saved $62,000 over the same two years.

Read the full analysis here.

Barack and Michelle Obama would have saved $270,000 under McCain’s plan and $14,000 under Obama’s.

This analysis incorporates the effects of John McCain’s new controversial proposal to temporarily cut the capital gains tax to 7.5% from 15%, a cut whose benefits go overwhelmingly to those making over $600,000/year, as well as other recent modifications to the McCain and Obama proposals.

John McCain’s $300 billion tax plan is heavily skewed towards corporations and the wealthy and does nothing for over 100 million Americans.

It sure wouldn’t do nothing for John and Cindy McCain, though.

Recently, a series of media commentators and conservatives have lent their support to what Matthew Yglesias dubbed “Neo-Hooverism” – the idea that the United States should significantly cut back on spending due to the financial crisis. The Neo-Hoover premise is also being used to argue against enacting an economic stimulus package.

Sen. Norm Coleman (R-MN) joined the ranks of the Neo-Hooverites when he laid out his own economic recovery plan this week. “I would have grave reservations if the stimulus concept got hijacked into another just big spending bill — I wouldn’t support that,” he said. Coleman said he would support “tax breaks or stuff like that to grow jobs.”

Coleman’s own eight-point economic plan, meanwhile, includes a slew of spending cuts and freezes:

Coleman’s recovery plan includes enforcing spending caps, freezing congressional pay, enforcing pay-go where new spending must be accompanied by like spending cuts, require the president to submit spending cuts to Congress, giving the president line-item veto authority, closing the tax gap of unpaid taxes, closing tax loopholes, making sure Social Security and Medicare are solvent in the future.

Coleman’s point of view, however, has been rebutted by economists and budget analysts, who say that the next administration should “open its wallet, not tighten its belt.” Nobel Prize winning economists Paul Krugman and Joseph Stiglitz have both advocated for a stimulus package. Krugman wrote that “increased government spending is just what the doctor ordered, and concerns about the budget deficit should be put on hold.”

As the Center for American Progress Action Fund has outlined, increased domestic spending would stimulate the economy and stem the tide of job loss. The stimulus “should jump-start a low-carbon economy, invest in infrastructure, expand unemployment insurance, increase energy assistance, and boost food stamp support.”

Matthew Yglesias wrote that a stimulus package constitutes “an effort to prevent the country from sliding into an extremely deep recession. The evidence suggests that the most effective forms of stimulus are spending-side stimulus.” Conservatives like Coleman and Sen. Saxby Chambliss (R-GA) need to set aside unproductive budget fervor for the moment, unless they believe that it’s “far better to let our children and grandchildren grow up amidst an endless depression.”