With less than a week before the U.S. election, it seems everyone is focusing on the Obama tax and economic plan, but according to an article published by Bloomberg, McCain’s economic recovery plan deserves to be looked at.  His economic recovery and tax plan calls for cutting the corporate tax, preserving the fifteen percent capital gains tax, letting businesses expense technology and equipment, freezing government spending and seeking long term solutions to economic recovery.  Consider this…

John McCain’s plan to bring down the corporate tax to 25 percent (a .10% cut) would induce foreign investment to remain. It would also continue the rally of the U.S. dollar.

John McCain is sticking to his guns when he says he will make Georg W Bush’s income tax cuts permanent. And he is all for preserving the 15 percent tax rate on capital gains and dividends.  Why is this important?

What experts are discovering about our current financial crisis, is there are plenty of mediocre companies sitting in portfolios.  Many people are trying to get out of them now, and many more will in the future. But if the capital gains rate is increased, it may deter those who otherwise would bail out of these companies. What this does, is prevent the shift of dollars from these “dogs” to investment in new companies with better products.

The McCain plan would speed up the economic recovery and improve the quality of it.  McCain’s plan suggests cutting the capital gains taxes in half in the next two years.  Although not a short term solution to the economic problem, it seems a wise choice in the long run.

A good idea is to allow companies to expense 100% of it’s investment in technology and equipment, in the same year they buy it. The current formula allows companies to write off half of the expense in the first year, and then depreciate the balance over a longer period. This would be especially beneficial to areas of the country that invest in heavy machinery, like Cleveland and Detroit.  However, the McCain plan calls for write-downs over a 3 or 5 year depreciation schedule.

McCain’s plan on energy is to build 45 new nuclear plants by 2030. This “green” energy source would significantly cut U.S. dependence on foreign oil, which would maintain stability in the financial markets. It would also create 700,000 jobs. The construction of these plants could be financed by the U.S. Treasury.

The McCain plan calls for an overall freeze on government spending.  Good luck with this, we’re all smart enough to know that Washington isn’t capable of passing it into law. But McCain’s disposition may help make some inroads on this issue.

McCain’s economic plan is a dynamic one, looking at the growth and competitive environment generated by tax cuts.
As noted in the Bloomberg post,”The Institute for Research on the Economics of Taxation finds that the McCain tax plan would add 0.5 percent to the annual growth rate for the private sector for five years. Obama’s plan would subtract 0.7 percent a year in growth for the same period. As Steve Entin of IRET notes, politicians have hurt growth before by ignoring such effects.

The Obama vision is all static. It’s better to redistribute, he says, because we sure aren’t going to grow. This attitude ignores the possibility of expansion, and it’s one that many lawmakers share, seeing only belt-tightening in the future. On some days, these gloomsters even include McCain.”

John McCain’s tax and economic plan is one that needs to taken seriously.