Besides cutting taxes, McCain pledges to keep tax rates low by cutting wasteful spending from the US budget. Since entrepreneurs are at the heart of American innovation, growth and prosperity and since they create jobs and job security, McCain believes corporate tax breaks are important and necessary to spurring the economy and lowering unemployment.
McCain wants to allow corporations and small businesses to expense equipment and technology because he recognizes these purchases as the investments they are. Deducting these costs will provide an immediate boost to capital expenditures and reward investments in cutting-edge technologies.
By reducing the Federal Corporate Tax rate from 35 percent to 25 percent, McCain believes he can correct an unfair burden on US companies. These taxes should be no higher than the average rate that America's major trading partners impose on theirs. The US currently has the second-highest combined corporate-tax rate in the industrialized world, and this high tax burden is driving many businesses -- and jobs -- overseas.
McCain plans to permanently ban Internet taxes and fight all efforts by Democrats to levy fees on one of the nation's key economic growth engines. He will also fight Democrats on their proposals to tax new cell phones and permanently ban all potential e-mail and text message taxes.
Establishing permanent tax credits equal to 10 percent of wages spent on research and development will not only simplify the tax code, but reward R&D activity in the US. These efforts make the US competitive with other countries, and a permanent credit will provide an incentive to innovate and remove uncertainty now hanging over businesses as they are forced to make tough R&D investment decisions.
Reforming Washington
Eliminating Wasteful Spending
McCain plans to put a halt to the earmarks, pork-barrel spending and waste that has plagued Washington DC and ties up billions of budgetary dollars every year. He will veto every pork-laden spending bill and expose the architects of these legislative proposals to the public. McCain will line-item veto all wasteful spending and eliminate earmarks that have led to corruption. Unlike Sen. Barack Obama who, along with Sen. Hillary Clinton, sought a combined $3 billion in earmarks, McCain does not ask for earmarks because he believes they interfere with fair, competitive markets, restrict a lawmaker's dutiful discharge of his or her duties, and decrease America's ability to address genuine national priorities.
Consequently, McCain proposes a one-year spending pause to evaluate programs. He believes that outside of essential military and veterans programs there should be a one-year pause in discretionary spending growth so federal auditors can conduct a top-to-bottom review of federal programs.
Unlike previous Republican administrations, McCain does not plan to leave office without balancing the federal budget and putting stop-gap measures in place to make sure it stays balanced even in an economic downturn and unexpected contingency. To accomplish this goal, he plans to:
- Eliminate broken government programs, which constitute 1/5 of all federal programs
- Reform the civil service system to promote accountability and good performance in the federal workforce
- Eliminate aarmarks, wasteful subsidies and pork-barrel spending
- Reform procurement programs and cut wasteful spending in Defense And Non-Defense Programs
McCain wants to do away with the mechanism Congress has created that automates higher taxes and more spending. If a spending program is on the books, federal budgets assume that it is on the books forever and continue to fund it, even if the law says it has expired. Conversely, if low taxes are on the books, budgets don't assume that they last forever, and when they expire, they are automatically raised.
Trade and Competition
One of McCain's major goals is lowering barriers to trade. Accessing the 95 percent of the world's consumers that lie outside US borders is vital to our economy and to do this, McCain believes that engaging in multilateral, regional and bilateral efforts to reduce barriers to trade, level the global playing field and build effective enforcement of global trading rules should be a priority for the next administration. McCain believes these steps will strengthen the US dollar and help control the rising costs of living.
Unembloyment and Job Growth
An educated workforce is also a key component to a thriving economy, and McCain believes every American should have access to any school that demonstrates excellence. For displaced workers, McCain believes the transition back to work should be seamless and because of this, the Unemployment Insurance (UI) system needs to be reformed. McCain will modernize, transform and consolidate redundant federal programs, strengthen community colleges and technical training and give displaced workers more choices to find their way back to the workforce.
McCain will reform the UI system so that part of each worker's Unemployment Insurance tax is deposited into a Lost Earnings Buffer (LEB) account. The LEB may be used to cover needed expenses for the recently unemployed, with a backstop of traditional UI if the account is exhausted before 26 weeks. Workers will have an incentive to preserve their LEB by getting back to work quickly, and may be eligible for a re-employment bonus if they get a new job quickly. The LEB will be portable, and upon retirement, the property of the worker.
McCain will reform training programs to provide quick assistance to workers seeking new skills. Workers will have access to a flexible training account that permits them to pay for training at a community college and use leftover funds to keep their health insurance.
Special, targeted assistance for older workers is often inefficient for older workers, and McCain will make sure those 55 years of age and older who have built up an LEB will be eligible for a lost earnings supplement.
