What McCain Got Wrong
WHAT HE GOT WRONG:"Tax cuts, starting with Kennedy, as we all know, increase revenues. So what's the argument for increasing taxes? If you get the opposite effect out of tax cuts?"
-- John McCain, interview with the National Review in March
McCain's claim that tax cuts "increase revenues" and that increasing taxes has the "opposite effect" is contested by his own senior domestic policy adviser, Douglas Holtz-Eakin. As director of the Congressional Budget Office, Holtz-Eakin estimated in 2005 that a 10 percent individual income tax cut would result in a revenue loss of $1.24 trillion over 10 years.
Under the most optimistic assumptions, increased economic growth generated by the cut would offset this loss by $345 billion, resulting in a net revenue loss of nearly $900 billion. Holtz-Eakin said by e-mail that McCain believes that "cutting middle-class taxes will generate additional growth" but "has never supported the idea that tax cuts pay for themselves." This, however, is precisely the impression created by McCain's National Review interview.
-- Michael Dobbs
For daily truth-squadding, visit washingtonpost.com/factchecker. Read the Candidates Week series at washingtonpost.com/frontrunners. Michael E. Ruane will discuss his article today at noon.