McCainomics II

Think Progress notes that the new tax cuts on capital gains and dividends proposed by McCain would mostly benefit the wealthy.

In fact, as the Wonk Room noted when McCain first toyed with including this provision in his economic plan, under the current 15 percent rate, 93.9 percent of the benefits go to the top 5 percent of taxpayers, and 84.8 percent to the top 1 percent. The other 80 percent of taxpayers see only 1.7 percent of the benefits of today’s rate.

The McCain campaign claims that the cut will “strengthen incentives to save, invest, and restore the liquidity of markets.” But given the current economic situation - one in which “people do not have an awful lot of capital gains” - this measure will do nothing to stimulate the economy.

Furthermore, The Street noted that McCain’s cut “might have unintended consequences,” like encouraging investors “to make one-time sales to capture lower capital gains and increased tax write-offs,” which “would facilitate capital flight.”