"McCain offers tax policies he once opposed" (headline, first page of The Washington Post, April 25, 2008)
Ah, remember the good old days of opinion columns appearing on the opinion page opposite a newspaper's editorial positions? Notwithstanding the Post's - or any other newspaper's - very legitimate right to oppose John McCain on tax cuts, the aforementioned front-page headline properly belongs on the op-ed page and seems to me a story line that deserves a strong response.
For Jonathan Weisman of the Post to admonish McCain for supporting the extension of the 15 percent tax rate on capital gains and dividends, irrespective of McCain's opposition to the cut in tax rates, circa 2003, is hardly a breaking news story. It makes me wonder just what is so monumental or historical about a political leader/presidential candidate changing his mind as the facts change, as John Maynard Keynes once observed.
I remember Ronald Reagan, both as governor of California and as candidate for president in 1980, saying, "Politics is about the future, not the past." How true, as Reagan, Kennedy, Truman and other great presidents of the 20th century explained when they adopted new positions so as to meet changing conditions.
McCain understands that to raise tax rates on capital formation and entrepreneurial investments at this time of recessionary expectations and a weakening currency would be inexplicable, inexcusable and completely counterproductive.
McCain's support for the lower marginal tax rates on capital gains and dividends is on the right side of history, as well as the right side of the electorate - no pun intended.
Irrespective of where McCain and former Rhode Island Sen. Lincoln Chafee were in the 2003 debate (and vote), McCain is unambiguously clear now that raising these tax rates in a declining economy would exacerbate the incipient states of stagflation we are facing today.
McCain understands intuitively, as well as intellectually, that capital gains taxes are voluntary taxes, i.e., they are never paid unless and until someone sells an asset. Further, taxing them as ordinary income, or close to it, as most in the Democratic Party plan to do, would distort decision-making, increase the use of tax shelters and demonstrably lower the amount of tax revenues coming into government at every level.
It is an absolute, empirically proven fact of tax policy that nearly one-half of all capital gains redound to the benefit of folks earning less than $50,000 a year.