Arizona Sen. John McCain's Economy Platform

The number one issue facing Americans in 2008 is the slowdown of the US economy. Gas prices are at an all-time high, millions of Americans have lost their jobs and a sub-prime mortgage crisis has spurred record foreclosures. In response, McCain has outlined several near-term and long-term plans to address these challenges.

Cost of Living

High Gas Prices
McCain's answer to high gasoline prices is the implementation of a summer gas tax holiday that would require Congress to suspend the 18.4 cent federal gas tex and 24.4 cent diesel tax from Memorial Day to Labor Day.

McCain also will stop filling the Strategic Petroleum Reserve (SPR) to reduce demand. International demand for oil is bolstered by federal purchases for the SPR. There is no reason to fill it when oil is so expensive; the overall SPR is of adequate size, and constantly filling it places further upward pressure on prices.

Ethanol subsidies, tariff barriers and sugar quotas drive up food prices and hurt Americans. McCain believes going in the wrong direction will cut off trade for American goods. McCain will end these kinds of policies, which contribute to higher transportation and food costs.

Housing Market Reforms & the Sub-prime Mortgage Crisis
Under McCain's proposed "HOME Plan" every American family or homeowner that qualifies will be able to trade a high-cost mortgage for a manageable loan that reflects their home's market value.

To qualify, non-conventional delinquent mortgage holders who live in their homes, took out their loan after 2005 must prove they were credit-worthy when they opened their original mortgage and demonstrate that they are unable to meet their current house payments. They'll qualify for McCain's HOME Plan if they can show their ability to meet the terms of a new 30-year fixed-rate mortgage on the existing home.

Completed HOME loan pplications (distributed at US Post Offices), would be submitted to the FHA HOME Office. Once the agency certifies that the mortgage holders are qualified, their existing loans will be retired and replaced by an FHA guaranteed HOME loan.

Another key aspect in solving the housing crisis, McCain believes, is the formation of a Justice Department Mortgage Abuse Task Force. This task force will aggressively investigate potential criminal wrongdoing in the mortgage industry and prosecute lawbreakers. The task force also will be responsible for assisting state Attorneys General who are investigating abusive lending practices.

Tax Cuts

For Middle Class Americans
Cutting taxes for middle class families will be a priority for the McCain Administration. The Republican nominee plans to permanently repeal the Alternative Minimum Tax (AMT) — a tax that is paid almost exclusively by 25 million American families. Repealing this tax would save average American families nearly $60 billion in its first year. Under McCain’s plan, a formerly AMT-taxed middle class family with children would save an annual average of more than $2,700 — which translates to a real tax cut for working families.

Another component of McCain's tax cut proposal is doubling the personal exemption for dependents of those trying to raise a family -- whether they are mothers, fathers or single parents. This proposal would raise the personal exemption for each dependent from $3,500 to $7,000. McCain also plans to maintain current income and investment tax rates and will fight Democrats who want to increase the rates in 2011 as part of a $100 billion tax hike. These increases would mean nearly $700 in new taxes for US taxpayers every year. McCain, on the other hand, wants to significantly reform estate tax law, including cutting the tax rate to 15 percent.

Meanwhile, McCain wants to reward taxpayers who save money, and take financial risks by investing in the economy. Low taxes on dividends and capital gains promote saving, channel investment dollars into innovative, high value uses and does not equate to wasteful financial planning. McCain will keep the current rates on dividends and capital gains and fight anti-growth efforts by Democrats.

Overall, McCain wants to make it more difficult for Congress to raise taxes by requiring a 3/5 (or 60 percent) majority rather than a simple majority.

For Retirees
McCain's economic plan calls for lowering Medicare premiums. He understands that high Medicare premiums deplete the Social Security and retirment savings that senior citizens have worked so long and so hard to create. McCain's comprehensive, pro-market health care and Medicare reforms will reduce health care costs and control these preimium increases without sacrificing high-quality health care.

The legacy of the McCain Administration will be securing the future of Social Security without raising taxes. McCain supports supplementing the current Social Security system with personal accounts – but not as a substitute for addressing benefit promises that cannot be kept. McCain will work with his Democratic allies -- as he has done in the past -- but if they do not act, he will.

McCain believes the growth of Medicare spending threatens the fiscal future of the US, and he has therefore proposed comprehensive health care reforms that will reduce the growth in Medicare spending, protect seniors against rising Medicare premium payments, and preserve the advancements in medical science central to providing quality care. McCain understands that controlling rising health care costs goes hand-in-hand with fixing the economy.

Consequently, McCain vehemently disagrees with subsidizing Amercia's most affluent taxpayers with prescription drugs, and he will implement reforms to reduce these kinds of large subsidies in the Medicare drug program.

The economic plan proposed by McCain would implement a simple, alternative tax system and give America a choice when the reforms are enacted. Those who wish to stay under the current system could do so, those who want the simpler system of two tax rates and generous standard deductions could switch. Such a switch would keep taxpayers from being subjected to thousands of pages of needless and often irrational rules and demands from the Internal Revenue Service.