Our guest blogger is James Kvaal, a Senior Fellow at the Center for American Progress Action Fund.

In a now-famous political moment, Sen. John McCain (R-AZ) suggested Saturday that the definition of “rich” is earning $5 million or more a year. As Ezra Klein pointed out, by this definition more than 99.9 percent of Americans are poor or middle class.

McCain said it doesn’t matter what he considers rich because “I don’t want to raise anybody’s taxes. I really don’t. In fact, I want to give working Americans a better shot at having a better life.” So which households does he give a better shot at having a better life? According to data from the Tax Policy Center:

– The top 0.1 percent of households – which include a handful of “middle-class” families under McCain’s definition — earn an average of $6.7 million. They would collect at least 18 percent of McCain’s tax cuts, including the extension of the Bush tax cuts.

– Under McCain, each of these super-rich households would receive $992,000, on average.

– In contrast, McCain’s tax plan gives no help to tens of millions of American families, including nearly all middle-class families without dependents and another 34 million who do not owe income taxes (although they do pay other taxes).

Our guest blogger is James Kvaal, a Senior Fellow at the Center for American Progress Action Fund.

After eight years of economic mistakes, unemployment and inflation are both rising and American families are hurting. By one measure – the “Misery Index” made famous by Jimmy Carter – the economy is in its worst shape since mid-1991.

The Misery Index is simply the combination of the unemployment rate and the inflation rate. It reached 11.3 percent in July. While still well below its heights in the 1970s and early 1980s, the Misery Index is now at its highest level since the first George Bush was president according to data from www.miseryindex.us.

The Misery Index was designed by Carter advisor Arthur Okun, who noted that inflation and unemployment figures often point in opposite directions and therefore neither gives a broad picture of the economy. The index climbs during periods of stagflation, which combine stagnant economic growth, high unemployment, and high inflation.

Stagflation puts Fed policymakers in a box. Cutting interest rates to spark the economy could make inflation even worse, while raising rates to fight inflation could worsen the downturn. Meanwhile, families are feeling the bite of hard times.

Our guest bloggers are Robert Gordon and James Kvaal, senior fellows at the Center for American Progress Action Fund.

John McCain’s balanced budget plan relies on steep cuts to U.S. spending in Iraq, according to a memorandum written by economic policy advisor Douglas Holtz-Eakin and published in the Washington Post today. The plan calls for $150 billion in savings in 2013, which is only possible with the kind of timed mass withdrawal from Iraq he has criticized.

Here is what the plan says:

“Balance the budget requires slowing outlay growth to 2.4 percent. The roughly $470 billion dollars (by 2013) in slower spending growth come from reduced deployments abroad ($150 billion; consistent with success in Iraq/Afghanistan that permits deployments to be cut by half — hopefully more) …”

Whatever McCain says about cutting deployments in half, achieving $150 billion in savings would require a massive withdrawal of American troops from Iraq and Afghanistan.

First, U.S. spending in Iraq and Afghanistan totaled $171 billion in 2007, according to the Congressional Budget Office – and that includes money for Iraqi security forces, foreign aid, and veterans benefits. If current policies continue – and spending grows with inflation – the war might cost $200 billion in 2013. Cutting the cost by three-quarters, especially when other costs (like veterans benefits and foreign aid) will remain, would require a sharp, perhaps nearly complete withdrawal of troops.

The numbers from CBO look even worse. According to CBO, rapidly reducing the number of troops in Iraq and Afghanistan to 30,000 would save only $55 billion in 2013. So CBO is saying that a much bigger troop reduction than McCain wants would save barely a third as much money as McCain claims.

Finally, Obama’s own, more aggressive plan to withdraw forces from Iraq will save only $90 billion a year, according to his campaign.

McCain has previously said that an Iraq withdrawal timetable would mean “disaster” and “chaos, genocide.” But his own budget documents contain a plan not merely for withdrawal, but for mass withdrawal.

Our guest bloggers are Robert Gordon and James Kvaal, senior fellows at the Center for American Progress Action Fund.

Even while John McCain attacks Barack Obama for “changing positions,” he is pioneering the art of running on multiple contradictory positions – or so we argued yesterday over at the New Republic.

McCain says he’s for Social Security privatization, but his website says he isn’t. His website says he’s for repealing the Alternative Minimum Tax and sweeping corporate tax cuts, but his aides apparently told the Tax Policy Center he isn’t. His aides embrace a $3.6 trillion tax increase, except when it’s pointed out that middle-class households will pay more in taxes too. And so on.

Our timing was good: the McCain campaign continued the pattern yesterday. In a written statement, McCain criticized cuts to Medicare subsidies for insurance companies – subsidies his policy advisor said he opposed. And McCain aides reportedly told Larry Kudlow that McCain is backing away from climate change legislation – something other McCain aides denied.

Most likely, these contradictory positions reflect the contradictory political priorities faced by the McCain campaign: shoring up the base while reaching out to independents. As a result McCain is sometimes a supply-sider and sometimes a deficit-hawk. He wants to transform our health care system and Social Security at no cost to anybody. He wants to clamp down spending, just not any specific program with a constituency.

Our guest bloggers are Robert Gordon and James Kvaal, senior fellows at the Center for American Progress Action Fund.

The National Review today correctly notes that John McCain’s tax plan “offers very little in the way of direct benefits to Americans in the middle of the income scale.”

The Review then go on to suggest that the only McCain provision with any middle-class relief — doubling the dependent exemption — “would be worth only $525 per child per year. A more direct approach to reducing the overtaxation of families would be to expand the child tax credit.” We made that point back in April.

The Review finally suggests that McCain should make the child credit relief “applicable against payroll as well as income taxes.” Progressives regularly push for much the same thing, increasing the refundability of the child credit. “Refundability” is a word that dare not speak its name among conservatives. But this is also a good idea.

Kudos to the National Review.

Our guest bloggers are Robert Gordon and James Kvaal, senior fellows at the Center for American Progress Action Fund.

Sen. John McCain calls his new economic policy Jobs for America, but its centerpiece remains help for corporations, not workers. Apparently McCain’s theory is that cutting corporate taxes by $175 billion will (1) make American corporations more competitive, which (2) will help American workers. But — as Gene Sperling and Jared Bernstein pointed out at McCain University last week — both of these steps are on shaky ground.

First, U.S. corporate taxes are in line with the rest of the world’s, according to a recent U.S. Treasury report. The effective tax rate on equipment financed by equity is 24 percent, the same as the G-7 average. The rate on equipment financed by debt is minus 46 percent, meaning that the government actually subsidizes these investments rather than taxing them.

Second, corporate gains are not trickling down to workers. Corporate profits are now near all-time highs: In 2005, they exceeded 13 percent of the economy for the first time since 1966. But the median household income fell by $963 between 2000 and 2006, even after inflation. And the long-term trend suggests that profits and earnings often don’t move together: from 1997 to 1999, earnings rose while corporate profits fell, and from 2000 to 2004, the reverse happened.

McCain’s economic policy is aimed at promoting American businesses. But it’s workers, not companies, who are struggling in the Bush economy.

Our guest bloggers are James Kvaal and Robert Gordon, senior fellows at the Center for American Progress Action Fund.

John McCain is campaigning for president on a platform of budget-busting tax cuts for the rich. In fact, he would cut taxes for the top 1 percent of taxpayers by nearly $150 billion a year.

But McCain opposed Bush’s tax policies before he supported them. So would he govern as the moderate on taxes he was in 2001 or the enthusiastic tax-cutter he is today? McCain’s true intentions were one issue discussed by Gene Sperling and Jared Bernstein at McCain U earlier today.

The easiest way to know what McCain would do as president is to ask him – and he says he wants deep, regressive tax cuts.

But his voting record also matters. And it’s true that, on taxes, McCain was a moderate before he was a conservative. But he was also a conservative before he was a moderate. According to Grover Norquist’s right-wing tax group, Americans for Tax Reform, McCain’s record has three stages:

– Between 1994 and 1997, McCain voted with ATR 100 percent of the time, demonstrating a “Reagan-like” record on taxes.

– Between 1998 and 2003, McCain’s ratings were lower, reaching a low of 55 percent in 2001.

– Since 2004, ATR writes, “McCain has slowly tried to reinvent himself as a taxpayer friendly senator.”

It’s not McCain’s current right-wing tax agenda that is the exception to his career-long record. Instead, it’s his opposition to the Bush tax cuts that was the break from his past.