COLUMBIA, S.C. - Despite calls in Washington for short-term economic relief, Senator John McCain yesterday proposed a long-term economic plan that would lower the corporate income tax rate and provide a host of other tax breaks for business.
"We will get through this rough patch, my friends," McCain told supporters.
The Republican presidential candidate proposed cutting the corporate tax rate to 25 percent from 35 percent, saying it would expand the economy, creating jobs and opportunity. He said his plan was "progrowth, less taxes, and less spending." He contrasted it with what he called the Democrats' "tired ideas of tax and spend."
McCain appeared to be resisting temporary economic relief for individuals, even as President Bush indicated support for a short-term boost and Ben Bernanke, Federal Reserve chairman, called explicitly for it. Bernanke urged the government to adopt a plan quickly and make it temporary, and he said "putting money into the hands of households and firms" would be more effective than measures such as making Bush's tax cuts permanent.
McCain adviser Doug Holtz-Eakin suggested the Arizona senator does not favor temporary relief at this time.
"One of the reasons we have the difficulties we do is that spending went out of control," McCain said yesterday, two days before the South Carolina's crucial first-in-the-South primary.
McCain's plan would also establish a permanent research and development tax credit and allow tax breaks for equipment and technology investment. Rudy Giuliani has also proposed cutting the corporate tax rate to 25 percent, while Mitt Romney has suggested eliminating taxes on income from interest, dividends, and capital gains for those earning less than $200,000 a year.
McCain, like the other leading Republicans, supports making permanent the tax cuts Congress approved in Bush's first term.
Romney, however, said, "It makes sense for Congress to take immediate action" and he'd have his own plan soon, while Fred Thompson said it's not time for the government to give the economy a jolt.