JOHN McCAIN paid his Republican presidential primary season dues yesterday by proposing a tax cut, but the proposal is not the kind the party has grown accustomed to hearing from its candidates. His would be a modest tax cut mainly for the middle class. He rightly says that most of whatever surplus funds become available in the years ahead are needed for other purposes--shoring up Social Security, paying down debt, etc.
The senator would cut the net cost of the proposal by including some loophole closing. It's another theme he shares with Bill Bradley. Corporations now dodging their fair share, in the senator's view, would be called upon to pay more so that middle-income families could pay less. That's not bad.
Like George W. Bush, whom he is challenging for the Republican nomination, Mr. McCain would double the children's tax credit from $500 to $1,000, but unlike Mr. Bush, he wouldn't take the gratuitous further step of making the credit available to upper-income households that have no claim to it in terms of need. Mr. Bush would reduce rates, notably at the top. The senator confines himself to broadening the income band to which the lowest rate of 15 percent applies. That only helps people, including the quite well-off, who now pay more than 15 percent on some of their income. But it's a relatively modest change.
Finally, the senator would address the so-called marriage penalty by raising the standard deduction for couples filing jointly, and he would create some new tax-favored savings accounts, the main one an expanded version of individual retirement accounts, but with fewer restrictions on the (taxable) withdrawal of the funds. We think there ought to be no tax cut, but this one is less objectionable than most. Mr. McCain has rightly criticized the Bush plan for both its cost--excessive--and tilt, which is toward the rich.
A Bush aide scoffed back yesterday that Mr. McCain's plan is "small dollar." He's right; it is--and that's its virtue.