A Real Rescue

A Real Rescue
By INVESTOR'S BUSINESS DAILY | Posted Tuesday, October 14, 2008 4:20 PM PT

Election '08: Barack Obama admitted to a Toledo plumber that he would raise his taxes to "spread the wealth around." John McCain has a better idea: Cut taxes to generate new wealth and more jobs.

Democratic presidential nominee Barack Obama can't just support a simple cut in capital gains taxes; it has to be a reduction so narrow that it's a stretch to call it a tax cut. Excluding most investment, it would have little if any economic stimulus effect that would produce new jobs.

Disingenuously talking about cutting capital gains taxes, of course, makes the silver-tongued socialist sound pro-business, but the proposal won't help anyone in need of a job in coming years.

Neither will the other items of Sen. Obama's "Promotional Rescue" (with apologies to the Rolling Stones). They include a government-imposed moratorium on home foreclosures, limited 401(k) withdrawals without penalty, and a Washington bailout for big-spending state and local governments.

And when the radical Southside Chicago community organizer promises to cut taxes for 95% of Americans, he really means welfare disguised as tax credits for the large sector of people not even paying income taxes — negating their payroll tax liability as well in many cases.

When millions more Americans pay zero taxes, it means millions with zero interest in any future tax cuts — a formula for long-term liberal Democratic political ascendancy.

John McCain, on the other hand, this week countered Obama with tax cuts that really are tax cuts. For the next two years, he would slice the capital gains tax in half. He would also quintuple the capital loss offset against ordinary income, raising it to $15,000.

He would lower the tax rate on IRA and 401(k) withdrawals for nearly 9 million seniors to 10% for the first $50,000 withdrawn per year. And his plan features an expanded federal guarantee to all savings account holdings for six months.

Sen. McCain understands what was explained with simple eloquence by Ronald Reagan on election night in November of 1980.

"I aim to try and tap that great American spirit that opened up this completely undeveloped continent from coast to coast and made it a great nation," he said at his victory celebration.

That spirit, Reagan continued, "survived several wars, survived a Great Depression, and we'll survive the problems we face right now."

Nothing could be further removed from that American spirit of which the greatest president of the 20th century spoke than the Marxist-like envy-mongering that is the soul of the Obama campaign. Churchill called socialism "the gospel of envy," and everywhere Obama goes, he preaches it, vilifying corporations as a class enemy and decrying "trickle down," his epithet for tax cuts.

McCain's plan to cut the capital gains tax in half would unlock a fortune in wealth, allowing it to be reinvested in businesses with the most potential for innovation and job growth.

That's a real rescue for millions of Americans — like that Toledo plumber who spoke truth to power when Obama came calling.