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John McCain now says "no new taxes."
It may be a great way to play to a still-skeptical GOP base, but it will be a hard pledge for President McCain to keep. To see how tough, just take a look at his own health care plan.
McCain's promise is the latest step on a remarkable journey that began back in 2001, when he voted against the Bush tax cuts. In a September debate in New Hampshire, McCain was asked if he would sign the no-taxes pledge that has been circulated for years by the conservative Americans for Tax Reform. His response: "I stand on my record. I don't have to sign pledges."
But in recent months, McCain has sounded more and more like Grover Norquist. He now says he would make President Bush's 2001 and 2003 tax cuts permanent. And in an appearance on ABC's "This Week" on Feb. 17, he finally took his last step down the anti-tax road. Asked by host George Stephanopoulos if there are any circumstances under which he would raise taxes, McCain answered simply, "no."
To see what that would mean, consider McCain's health care proposal. He says he would treat employer sponsored health benefits as taxable income, while giving individuals a tax credit for the insurance they buy. On its own, taxing employer insurance just like wages would be a huge tax increase—OMB estimates in the neighborhood of $1 trillion from 2009–2013. To many on the right, that alone would violate the no-tax pledge.
McCain's plan would also create a credit of $2500 for singles and $5000 for couples to subsidize their cost of buying insurance. TPC has looked at the impact of a similar (though, in fairness, not identical) plan and concluded that it would result in a small tax increase of about $500 for high income people in 2009.
Now, McCain could probably tinker with the plan so it would end up being revenue neutral, but just looking at this one piece of his economic agenda shows just how difficult it would be to make policy while sticking with a "no new taxes" pledge. And that is before he tries to deal with a persistent budget deficit.
If McCain doesn't believe how dangerous this pledge would be to his presidency, he should just ask the man who endorsed him the day after he made his promise—George H.W. Bush. His administration was largely ruined when he broke his "read my lips" promise to never raise taxes.
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