As anyone who has thought about outsourcing knows, America could and should be a much better place to do business than it is. The United States could and should be much more competitive than it is because of our high taxes and complicated regulations.
That’s the true story behind McCain’s plans to reduce corporate tax rates and cut taxes on dividends. Believe it or not, the United States actually has higher corporate tax rates than almost any other country. McCain aims to cut those taxes to stimulate economic growth, and keep rates on capital gains low to encourage Americans to invest in the future.
Obama wants to increase the tax on capital gains, cutting the investments that drive our economy—and history shows that higher capital gains rates actually means less tax revenue for the government as people change their investment behavior. That slows economic growth by making America less attractive to do business in.
Obama’s plan banks on Americans not understanding the basic economics of tax policy. It assumes that Americans would be willing to trade a more robust economy under McCain’s plan for a shot at some tax credits they may or may not qualify for.
That’s a bad bet for Americans and may well be a bad bet for the Obama campaign. His witches’ brew of tax increases for some and tax credits for others add up to a substantial increase in taxes overall. Those “middle class” tax cuts might be paid for with fewer jobs for Americans.
That’s a pretty high price to pay for a shot at a few tax credits.
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