John McCain on Tax Reform Republican Sr Senator (AZ

Sub-sections under Tax Reform:
• Voting Record
• Other issues under Tax Reform

We need a simpler, fairer tax code, but not FairTax

A: I do not, and I think we should look very carefully at it. Obviously, we need a simpler, fairer tax code. If Congress can't fix the tax code, give me the job and I'll fix it.

Tax system is fair; wealthy pay bulk of taxes

A: Everybody's paying taxes, and wealth creates wealth. A vibrant economy creates wealth. Revenues are at an all-time high.

Q: So you're saying the system is fair?

A: Sure it's fair. The bulk of the taxes are paid by wealthy people. Should we reform our tax code? Absolutely we should fix our tax code, and we should fix it immediately.

Won't sign no-tax pledge; focus on cutting spending

A: Because I stand on my record. And my record is 24 years of opposing tax increases. And I opposed them & I'll continue to oppose them. But my proposal in 2000 & 2001 was not just to cut taxes but to stop spending. We allowed spending to get out of control to the point where it bred corruption. I pledge to the American people, I will veto every pork barrel bill that comes across my desk. And I will make the authors of those pork barrel projects famous.

Q: Why not, if you are determined to not raise taxes, why not sign the pledge?

A: Because there's no point. I stand on my record. I don't have to sign pledges. We had automatic restraints in spending included in my tax-cut package, [but we Republicans] let spending get out of control and preside over the largest increase in the size of government since the Great Society.

Make tax reform commission & vote yes-or-no on outcome

A: I believe that we've got to simplify the tax code. But one of the first areas we've got to go after is the alternate minimum tax, which is going to eat in to 20 million American families if we don't eliminate it, and very quickly. Look, when we found out that Congress could not close a single military base when we had a huge number of them, we appointed a commission and they said we would close so many bases, and Congress votes up or down. I would find [someone like former Federal Reserve Chairman] Alan Greenspan. I'd say, "Give us your recommendations." We'll pass a law, and we will vote on Alan Greenspan and his commission's recommendations, yes or no, up or down. That's the way you're going to simplify the tax code, which now requires $140 billion of American families' income to prepare their tax returns.

FactCheck: Families spend $20B on tax prep, not $140B

McCain's campaign said that the senator was drawing his figures from a 2005 report by the President's Advisory Panel on Federal Tax Reform. The panel cited a total compliance cost of $140 billion. But that figure wasn't just for "families," it included individual and business taxes. The cost attributed to individuals was $65 billion. And even that figure is not an estimate for the amount of "American families' income" spent to prepare taxes, but assigned a dollar value to preparation time. The IRS calculates time burden separately from cash outlay. For 2000, it puts the latter at $19 billion, a fraction of the figure McCain used.

McCain would have been correct to say that it is estimated that American families spend more than $20 billion of their income on preparing tax returns, plus hours of their valuable time.

Opposed Bush tax cuts, but must extend them now

A: Mm-hmm.

In 2004, I again asked you about opposing the Bush tax cuts, and you said, "I voted against the tax cuts because of the disproportional amount that went to the wealthiest Americans. I would clearly support not extending those tax cuts in order to help address the deficit." But now you voted to extend them.

A: I voted to extend them because it would have the effect of having a tax increase. The tax cuts have increased revenues enormously. They've been very beneficial. The problem is that spending has lurched completely out of control. My proposal was to restrain spending. I do not support tax increases. And the effect of not making them permanent would have the effect of a tax increase.

New tax cuts account for contingencies and over-spending

A: Because in the proposal that I had, there were significant tax cuts. And the thing that bothered me was that there was no provision to start addressing a contingency. We had a contingency called the Iraq war. And we had no restraint on spending. Yes, these tax cuts needs to be made permanent. Otherwise they will have the effect of a tax increase. But spending is destroying the future of this country.

Alternative minimum tax is eating Americans alive

A: The alternative minimum tax is obviously eating Americans alive, and it's got to be repealed. Another one I think is important is a $3,000 tax credit for people to be able to purchase health insurance. So low-income Americans will have access to health care, which is an amazing and difficult problem today. And a simpler, flatter, fair tax so that Americans don't have to spend $140 billion to prepare their tax returns.

Bush tax cuts fiscally reckless & favored rich;but keep them

A: No, because it would have the effect of a tax increase, and I don't support tax increases. The fact is that in 2000 I had a proposal that restrained spending. I voted against those tax cuts because there was no restraint of spending, and spending lurched out of control completely.

Q: President McCain, no new taxes?

A: Of course not. I've never supported tax increases. I don't support them now.

Q: And that's a pledge that you would make over your four years?

A: I don't take pledges. The fact is my record is very clear of opposition to tax increases. I oppose tax increases. I don't take pledges.

Tax plan: $238B over 5 years; $500B over 10 years

Under the plan, the ceiling for the 15% bracket would rise to $70,000 from $43,050 for married couples filing jointly, and to $35,000 from $25,750 for single taxpayers. The effect is to give a $3,504 tax cut to a couple with taxable income of $70,000 or more.

Double child tax credit; add family incentives

“Balanced approach”, and starts a flat tax system

“I want a balanced approach,” McCain says. “I put a whole lot of money into Social Security, Medicaid, and paying down the debt [and less] money into tax cuts.”

Reagan Republican: simplify taxes; cut waste

Here’s some straight talk.
• I’m a proud Reagan Republican.
• I’ll tear up the 44,000-page tax code that benefits special interests.
• Stop the outrageous waste and pork barrel spending that steals your money.
• Use the surplus to secure Social Security, cut middle class taxes, and pay down the debt.
• Give me your vote, and we’ll give you back your government.

Big money interests fear closing loopholes

Remove charitable deduction; it only benefits rich

According to McCain’s plan, people who give charitable contributions in the form of stock, real estate, bonds, or artwork could no longer take a tax deduction for the current, appreciated value of the gift. Instead, the donor could take a deduction only for the original cost of the asset. The McCain campaign describes this as closing a loophole for the very rich, while the Bush campaign says it would kill off incentives for giving.

“Wealthy Americans shouldn’t get a tax write-off for contributing a fancy painting or an overvalued stock,” said McCain’s spokesman. “Bush is protecting his wealthy donor base at the expense of the middle class.” By eliminating the deduction, the spokesman said, 25,000 additional working-class people would get a tax cut.

Replace employer-provided benefits with a tax cut

Middle-class tax cut: expand 15% tax bracket

His tax plan largely tracks a proposal he made last summer. New details include a proposal to pay for much of his tax cut by closing $150 billion worth of specific corporate tax loopholes over the next 5 years. Under McCain’s plan, the ceiling for the 15% tax bracket would rise to $70,000 for couples filing jointly and to $35,000 for single people. Its primary benefits would therefore go to people currently in the 28% tax bracket, couples earning over $43,050 and single people earning over $25,750

Don’t promise tax cuts from future surpluses we may not have

BUSH: In human terms, [a couple earning] $42,000 a year in income, under [McCain’s] plan, will receive a $200 tax cut. Under the plan that I proposed, they receive an $1,852 tax cut. The fundamental difference is that the additional $1,600 will go to Washington under your idea. And under my idea it goes into people’s pockets. There is enough money to take care of Social Security. There’s enough money to meet the basic needs of our government and there is enough money to give the American people a substantial tax cut.

1st step to simplify taxes: close special interest loopholes

MCCAIN: I want to thank you for your efforts on behalf of a flat tax. I think we’ve got to eliminate the marriage penalty, the earnings test, raise the 15% tax bracket, put a level of $5 million on the inheritance tax. But this tax code is 44,000 pages long. It’s an abomination. It’s a cornucopia of good deals for the special interests and it’s a nightmare for American citizens. We’ve got to get rid of the special interest loopholes that are right in this tax code. That’s the first step in cleaning it up to reach your goal of a simplified tax system. I appreciate your efforts. But until the day arrives when we remove the influence of the special interests, we’re not going to be able to achieve your goal.

Supports flat tax; stop complexity by special interests

Keep lump-sum earned income tax credit

Cut marriage tax, inheritance tax, & earnings test

I will:
• repeal the indefensible tax penalty that punishes couples who want to get married
• slash the inheritance tax that penalizes those who wish to leave the fruits of their labor to their children
• end the earnings test penalty for seniors that taxes their income twice and denies them the self-respect that comes from working
• dramatically increase the number of Americans who qualify for the lowest tax rate of fifteen percent by raising the eligible income to $70,000 per couple.

Taxes should be flatter, lower, and simpler

Voted against Bush tax cuts for not reining in spending

A: I didn't say that I was wrong. I said that the reason why I opposed those tax cuts was because we didn't rein in spending. And the fact is the tax cuts have dramatically increased revenues. If we don't make them permanent, then every business, farm and family in America will have to adjust their budgets to what is in effect a tax increase.

In 2001, I proposed massive tax cuts, but I also proposed to rein in spending. Spending is out of control. We didn't lose the 2006 election because of the war in Iraq; we lost it because we in the Republican Party came to Washington to change government and government changed us. We let spending go out of control. We spent money like a drunken sailor, although I never knew a sailor drunk or sober with the imagination of my colleagues.

Voted YES on repealing the Alternative Minimum Tax.

Proponents recommend voting YES because:

This amendment repeals the AMT. Except for the telephone tax, the alternative minimum tax is the phoniest tax we have ever passed. The AMT, in 1969, was meant to hit 155 taxpayers who used legal means to avoid taxation, under the theory that everybody ought to pay some income tax.

This very year, more than 2,000 people who are very wealthy are not paying any income tax or alternative minimum income tax. So it is not even working and hitting the people it is supposed to hit. Right now, this year, 2007, the year we are in, there are 23 million families that are going to be hit by this tax. It is a phony revenue machine, over 5 years, $467 billion dollars. We are going to have to have a point of order this year to keep these 23 million taxpayers from paying this tax. We might as well do away with it right now, once and for all, and be honest about it.

Opponents recommend voting NO because:

The reality of the budget resolution is this may not have anything to do with eliminating the alternative minimum tax. The one thing it will do is reduce the revenue of the Government over the next 5 years by $533 billion, plunging us right back into deficit. Look, we can deal with the AMT. We have dealt with it in the underlying budget resolution for the next 2 years. There will be no increase in the number of people affected by the AMT for the next 2 years under the budget resolution, and that is paid for. Unfortunately, this amendment is not paid for. It would plunge us back into deficit. I urge my colleagues to vote no.

Voted YES on raising estate tax exemption to $5 million.

Proponents recommend voting YES because:

It is disappointing to many family businesses and farm owners to set the death tax rate at what I believe is a confiscatory 45% and set the exemption at only $3.5 million, which most of us believe is too low. This leaves more than 22,000 families subject to the estate tax each year.

Opponents recommend voting NO because:

You can extend all the tax breaks that have been described in this amendment if you pay for them. The problem with the amendment is that over $70 billion is not paid for. It goes on the deficit, which will drive the budget right out of balance. We will be going right back into the deficit ditch. Let us resist this amendment. People could support it if it was paid for, but it is not. However well intended the amendment is, it spends $72.5 billion with no offset. This amendment blows the budget. This amendment takes us from a balance in 2012 right back into deficit. My colleagues can extend those tax cuts if they pay for them, if they offset them. This amendment does not pay for them; it does not offset them; it takes us back into deficit. It ought to be defeated.

Voted YES on supporting permanence of estate tax cuts.

Proponents recommend voting YES because:

The permanent solution to the death tax challenge that we have today is a compromise. It is a compromise that prevents the death rate from escalating to 55% and the exclusion dropping to $1 million in 2011. It also includes a minimum wage increase, 40% over the next 3 years. Voting YES is a vote for that permanent death tax relief. Voting YES is for that extension of tax relief. Voting YES is for that 40% minimum wage increase. This gives us the opportunity to address an issue that will affect the typical American family, farmers, & small business owners.

Opponents recommend voting NO because:

Family businesses and family farms should not be broken up to pay taxes. With the booming economy of the 1990s, many more Americans joined the ranks of those who could face estate taxes. Raising the exemption level and lowering the rate in past legislation made sense. Under current law, in my State of Delaware, fewer than 50 families will face any estate tax in 2009. I oppose this legislation's complete repeal of the estate tax because it will cost us $750 billion. Given the world we live in today, with clear domestic needs unmet, full repeal is a luxury that we cannot afford.

To add insult to this injury, the first pay raise for minimum wage workers in 10 years is now hostage to this estate tax cut. We are told that to get those folks on minimum wage a raise, we have to go into debt, so that the sons and daughters of the 7,000 most fortunate families among us will be spared the estate tax. We must say no to this transparent gimmick.

Voted YES on permanently repealing the `death tax`.

Proponents of the motion say:
• We already pay enough taxes over our lifetimes We are taxed from that first cup of coffee in the morning to the time we flip off the lights at bedtime. If you are an enterprising entrepreneur who has worked hard to grow a family business or to keep and maintain that family farm, your spouse and children can expect to hear the knock of the tax man right after the Grim Reaper.
• In the past, when Congress enacted a death tax, it was at an extraordinary time of war, and the purpose was to raise temporary funds. But after the war was over the death tax was repealed. But that changed in the last century. The death tax was imposed and has never been lifted.
• The death tax tells people it is better to consume today than to invest for the future. That doesn't make sense.

Opponents of the motion say:
• Small businesses and farms rarely--if ever--are forced to sell off assets or close up shop to pay the tax. Under the current exemption, roughly 99% of estates owe nothing in estate taxes. By 2011, with a $3.5 million exemption, only two of every 100,000 people who die that year would be subject to the estate tax.
• Today's vote is on a motion to proceed to a bill to repeal the estate tax. Not to proceed to a compromise or any other deal--but to full repeal. I oppose full repeal of the estate tax. Our Nation can no longer afford this tax break for the very well off. Permanently repealing the estate tax would add about $1 trillion to our national debt from 2011 to 2021.

Voted NO on $47B for military by repealing capital gains tax cut.

• $25.4 billion for procurement
• $17 billion for Army operation and maintenance
• $4.5 billion for Marine Corps operation and maintenance

Voted YES on retaining reduced taxes on capital gains & dividends.

• Decreasing the number of people that will be required to pay the Alternative Minimum Tax (AMT)
• Allowing for deductions of state and local general sales taxes through 2007 instead of 2006
• Lengthening tax credits for research expenses
• Increasing the age limit for eligibility for food stamp recipients from 25 to 35 years
• Continuing reduced tax rates of 15% and 5% on capital gains and dividends through 2010
• Extending through 2007 the expense allowances for environmental remediation costs (the cost of cleanup of sites where petroleum products have been released or disposed)

Voted YES on extending the tax cuts on capital gains and dividends.

1. Extension Of Expiring Provisions: for business expenses, retirement savings contributions, higher education expenses, new markets tax credit, and deducting state and local sales taxes.
2. Provisions Relating To Charitable Donations, and Reforming Charitable Organizations
3. Improved Accountability of Donor Advised Funds
4. Improvements in Efficiency and Safeguards in IRS Collection

Opponents of the bill recommend voting NAY because:
• Health care for children (among many other things) should come before tax cuts for the wealthy.
• The 2-year cost of the extensions on capital gains tax cuts for the wealthiest Americans is $20 billion. So if we defer the tax break the administration is pushing for the wealthiest people in America, we would have enough money to provide basic health insurance for every uninsured child in America, and we would eliminate 20% of the uninsured Americans with that single act alone.
  Proponents of the bill recommend voting YEA because:
  • The largest provision in the bill--about $30 billion of tax relief--amounts to half of the net tax package and is designed to keep 14 million people out of the Alternative Minimum Tax. The AMT is terrible and should be repealed.
  • College tuition benefits for families who send their kids to college -- by definition, this benefit goes to middle-income families.
  • The small savers' credit -- for low-income folks that save through an IRA or pension plan.
  • Many small businesses use the small business expensing benefit to buy equipment on an efficient after-tax basis. It is good for small business. It is good for economic growth. Reference: Tax Relief Act of 2005; Bill S. 2020 ; vote number 2005-347 on Nov 18, 2005

    Voted NO on $350 billion in tax breaks over 11 years.

    H.R. 2 Conference Report; Jobs and Growth Tax Relief Reconciliation Act of 2003. Vote to adopt the conference report on the bill that would make available $350 billion in tax breaks over 11 years. It would provide $20 billion in state aid that consists of $10 billion for Medicaid and $10 billion to be used at states' judgment. The agreement contains a new top tax rate of 15 percent on capital gains and dividends through 2007 (5 percent for lower-income taxpayers in 2007 and no tax in 2008). Income tax cuts enacted in 2001 and planned to take effect in 2006 would be accelerated. The child tax credit would be raised to $1,000 through 2004. The standard deduction for married couples would be double that for a single filer through 2004. Tax breaks for businesses would include expanding the deduction that small businesses could take on investments to $100,000 through 2005. Reference: Bill HR.2 ; vote number 2003-196 on May 23, 2003

    Voted YES on reducing marriage penalty instead of cutting top tax rates.

    Vote to expand the standard deduction and 15% income tax bracket for couples. The elimination of the "marriage penalty" tax would be offset by reducing the marginal tax rate reductions for the top two rate bracket Reference: Bill HR 1836 ; vote number 2001-112 on May 17, 2001

    Voted NO on increasing tax deductions for college tuition.

    Vote to increase the tax deduction for college tuition costs from $5,000 to $12,000 and increase the tax credit on student loan interest from $500 to $1,000. The expense would be offset by limiting the cut in the top estate tax rate to 53%. Reference: Bill HR 1836 ; vote number 2001-114 on May 17, 2001

    Voted YES on eliminating the 'marriage penalty'.

    Vote on a bill that would reduce taxes on married couples by increasing their standard deduction to twice that of single taxpayers and raise the income limits on both the 15 percent and 28 percent tax brackets for married couples to twice that of singles Reference: Bill HR.4810 ; vote number 2000-215 on Jul 18, 2000

    Voted YES on phasing out the estate tax ("death tax").

    Vote on a bill that would eventually eliminate the tax imposed on estates and gifts by 2010 at an estimated cost of $75 billion annually when fully phased in. Reference: Bill HR 8 ; vote number 2000-197 on Jul 14, 2000

    Voted NO on across-the-board spending cut.

    The Nickles (R-OK) Amdendment would express the sense of the Senate that Congress should adopt an across-the-board cut in all discretionary funding, to prevent the plundering of the Social Security Trust Fund
    Status: Amdt. Agreed to Y)54; N)46 Reference: Nickles Amdt #1889; Bill S. 1650 ; vote number 1999-313 on Oct 6, 1999

    Voted YES on requiring super-majority for raising taxes.

    Senator Kyl (R-AZ) offered an amendment to the 1999 budget resolution to express the sense of the Senate on support for a Constitutional amendment requiring a supermajority to pass tax increases.
    Status: Amdt Agreed to Y)50; N)48; NV)2 Reference: Kyl Amdt #2221; Bill S Con Res 86 ; vote number 1998-71 on Apr 2, 1998

    Rated 72% by NTU, indicating "Satisfactory" on tax votes.

    McCain scores 72% by NTU on tax-lowering policies

    Every year National Taxpayers Union (NTU) rates U.S. Representatives and Senators on their actual votes—every vote that significantly affects taxes, spending, debt, and regulatory burdens on consumers and taxpayers. NTU assigned weights to the votes, reflecting the importance of each vote’s effect. NTU has no partisan axe to grind. All Members of Congress are treated the same regardless of political affiliation. Our only constituency is the overburdened American taxpayer. Grades are given impartially, based on the Taxpayer Score. The Taxpayer Score measures the strength of support for reducing spending and regulation and opposing higher taxes. In general, a higher score is better because it means a Member of Congress voted to lessen or limit the burden on taxpayers. The Taxpayer Score can range between zero and 100. We do not expect anyone to score a 100, nor has any legislator ever scored a perfect 100 in the multi-year history of the comprehensive NTU scoring system. A high score does not mean that the Member of Congress was opposed to all spending or all programs. High-scoring Members have indicated that they would vote for many programs if the amount of spending were lower. A Member who wants to increase spending on some programs can achieve a high score if he or she votes for offsetting cuts in other programs. A zero score would indicate that the Member of Congress approved every spending proposal and opposed every pro-taxpayer reform.

    Source: NTU website 03n-NTU on Dec 31, 2003

    Implement socially fair, broad-based tax cuts.

    McCain adopted the Republican Main Street Partnership issue stance:

    Not only has the Republican-led Congress achieved a balanced budget for the first time since 1969, but it has also created a budget surplus -- a feat not previously even imaginable. It is currently projected that the Fiscal Year 1999 budget surplus will be along the order of some $80 billion, of which $66 billion is earmarked for Social Security. This envious state of affairs would seem to indicate that equitable, far-reaching tax reductions may be in order -- not as an ideological or political strategy, but as a primary element of an economic growth policy and a legitimate tool for holding down unnecessary government growth in times of surplus.

    The United States is enjoying steady economic prosperity thanks in no small measure to prudent fiscal policies implemented by the Republican-led Congress. However, we must look not only at the positive side of the economy but also at the problems the economy faces -- at the present time and into the twenty-first century. Limiting government spending (i.e., spending caps) is a good beginning to address some difficulties. In addition, current and future Congresses should maintain a balanced federal budget, pay down the national debt (which will help protect Social Security for current and future generations), redefine the federal government's role in the society and, finally, think about fair tax reductions for the American people and the businesses that drive our economy. [We need] an evaluation of implementing tax cuts based on their social fairness.

    Source: Republican Main St. Partnership Issue Paper: Fiscal Policy 98-RMSP6 on Sep 9, 1998

    Click here for 10 older quotations from John McCain on Tax Reform. Click here for definitions & background information on Tax Reform. Click here for SenateMatch answers by John McCain. Agree? Disagree? Voice your opinions on Tax Reform in The Forum. Click here for a summary of John McCain's positions on all issues. Click here for issue positions of other AZ politicians.
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