Politics & Policy

Middle-Class Mac

In 1980, 1988, and 2000, Republicans became president in part by promising that middle-class voters would pay significantly less in taxes under them than under the Democrats. Republicans who promise to cut middle-class taxes do not always win, as Bob Dole did not in 1996. But they have not won an election in more than three decades without getting to the Democrats’ right on middle-class taxes.

Middle-class voters would get one bit of tax relief from John McCain. He says he would double the dependent exemption from $3,500 to $7,000. For a taxpayer in the 15 percent bracket, that tax cut would be worth $525 a year — once it is phased in. That’s nice. But it is not much; it is not even as much as Obama is offering.

We do not believe that voters resent John McCain’s wealth or find it at all troubling. But they think that the Republicans are more concerned about the wealthy and about corporations than about the middle class — and it is one of the biggest things they dislike about Republicans. McCain’s tax policy does nothing to counteract that perception.

If McCain stood for a large expansion of the tax credit for children, and made that expanded credit apply against payroll taxes, he could deliver serious relief to many overtaxed middle-class families. The financial sacrifices that parents make contribute to the future health of Social Security and Medicare, and ought to be counted against their taxes to support those programs. It is a matter both of fairness and efficiency. An expanded child credit would also put money in families’ pocketbooks at a time when the chief economic concern they have is not the housing crisis or unemployment but rather rising prices. And it would make it much harder to paint McCain as offering “a third Bush term” on the economy.

Expanding the child credit would reduce federal revenues substantially. To make up for the lost revenue, McCain should pledge to end corporate welfare and to eliminate tax breaks such as the deduction for state and local taxes. Or he could make the expansion temporary, while seeing how the economy does. Or pledge to pursue a tax reform that raises enough money to compensate for the credit.

But the truth is that nobody is going to vote for McCain because of what he promises to do about the deficit, and the deficit, about average as a percentage of GDP, is not all that pressing an economic problem. Middle-class voters who like McCain, on the other hand, may tip into his column if he offers them something tangible. Republicans already better represent the values of middle-class families than Democrats. They can do a better job of representing their economic interests.


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