Bush Made Permanent

Paul Krugman
Op-Ed Columnist
The New York Times
April 28, 2008

As the designated political heir of a deeply unpopular president — according to Gallup, President Bush has the highest disapproval rating recorded in 70 years of polling — John McCain should have little hope of winning in November. In fact, however, current polls show him roughly tied with either Democrat.

In part this may reflect the Democrats’ problems. For the most part, however, it probably reflects the perception, eagerly propagated by Mr. McCain’s many admirers in the news media, that he’s very different from Mr. Bush — a responsible guy, a straight talker.

But is this perception at all true? During the 2000 campaign people said much the same thing about Mr. Bush; those of us who looked hard at his policy proposals, especially on taxes, saw the shape of things to come.

And a look at what Mr. McCain says about taxes shows the same combination of irresponsibility and double-talk that, back in 2000, foreshadowed the character of the Bush administration.

The McCain tax plan contains three main elements.

First, Mr. McCain proposes making almost all of the Bush tax cuts, which are currently scheduled to expire at the end of 2010, permanent. (He proposes reinstating the inheritance tax, albeit at a very low rate.)

Second, he wants to eliminate the alternative minimum tax, which was originally created to prevent the wealthy from exploiting tax loopholes, but has begun to hit the upper middle class.

Third, he wants to sharply reduce tax rates on corporate profits.

According to the nonpartisan Tax Policy Center, the overall effect of the McCain tax plan would be to reduce federal revenue by more than $5 trillion over 10 years. That’s a lot of revenue loss — enough to pose big problems for the government’s solvency.

But before I get to that, let’s look at what I found truly revealing: the McCain campaign’s response to the Tax Policy Center’s assessment. The response, written by Douglas Holtz-Eakin, the former head of the Congressional Budget Office, criticizes the center for adopting “unrealistic Congressional budgeting conventions.” What’s that about?

Well, Congress “scores” tax legislation by comparing estimates of the revenue that would be collected if the legislation passed with estimates of the revenue that would be collected under current law. In this case that means comparing the McCain plan with what would happen if the Bush tax cuts expired on schedule. ... ( more )

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