Candidates take aim at tax rates

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By Joseph Curl

The presumptive presidential nominees staked out diametrically opposed positions on taxes Tuesday, with Republican John McCain pledging to extend soon-to-expire tax cuts for millions of Americans and Democrat Barack Obama promising tax increases for many of the nation's wealthiest people.

Sen. McCain, a four-term senator from Arizona who once headed the Commerce Committee, vowed to maintain President Bush's across-the-board tax cuts, to lower corporate tax rates from 35 percent to 25 percent and to allow companies to write off new equipment and technology in their first year.

"You work hard in small businesses to grow and create new jobs and opportunities for others," Mr. McCain told a Washington gathering of the National Federation of Independent Business.

"For too long, government has been the voice of big business, not small business. And to make matters worse, even when very large businesses violate their trust, they seem to be held to a different standard - getting away with conduct that would leave any small business owner broke."

Sen. Obama, who on Monday kicked off a two-week economic tour as he seeks to appeal to voters worried about lost jobs, rising gas prices and other financial woes, vowed to increase taxes only on the wealthy and use that increased revenue to pay for a middle-class tax cut of $1,000 a year.

The Illinois Democrat vowed he would raise taxes on Americans making $250,000 a year or more and increase the capital-gains tax for those in higher income brackets while exempting small investors. He said the U.S. economy has been "out of balance for too long."

"So, the general principle of raising taxes on higher-income Americans, like myself, and providing relief to those who haven't benefited as much from this new global economy, I think, is a sound one," Mr. Obama said on CNBC.

The first-term senator said any tax increases he would seek as president would depend on the economic situation he inherits. "Some of those you could possibly defer," he said. "But I think the basic principle of restoring fairness to our economy and encouraging bottom-up economic growth is important."

Mr. McCain said Mr. Obama is nothing more than a tax-and-spend liberal who will raise taxes across the board. "Under Senator Obama's tax plan, Americans of every background would see their taxes rise - seniors, parents, small-business owners and just about everyone who has even a modest investment in the market," the Arizona lawmaker said.

He said he supports keeping capital-gains taxes as they are now, but doubling a tax exemption for children and phasing out the "alternative minimum tax," which he said would save some 25 million middle-class families up to $2,000 in a year.

Mr. Obama fired back, saying Mr. McCain's tax proposals would end up costing Americans hundreds of billions of dollars.

"He wants to add $300 billion more in tax breaks and loopholes for big corporations and for the wealthiest Americans, and he hasn't even explained how he'd pay for it," Mr. Obama told reporters in St. Louis, where he traveled to talk up his proposals on revamping the health care system.

"He's offering a tax cut that won't ensure that health care is affordable for hardworking families who need help most," Mr. Obama said. "And his plan could actually put your coverage at risk by undermining the employer-based system that most Americans depend on."