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Monday, September 05, 2005

McCain Will Now Support Estate Tax Reform

John McCain does not support the repeal of the estate tax, a thorn in his party’s side on this issue and a source of recent within party attacks on his position, including targeted ad campaigns. In a significant shift, McCain will now vote to support cloture and will work for a scaled down version of the estate tax reform package.  Political pressure from within the GOP motivated the change in position:

McCain and Taxes, by Robert Novak, Chicago Sun-Times (alternate link): Sen. John McCain will take a small step this week toward making peace with the Republican Party on the tax issue. He plans to vote for cloture to block a filibuster on the House-passed bill repealing the estate tax. ... McCain is not merely voting for cloture to enable an up-or-down vote on the estate tax. He is ready to support a significant scaling down of what Republican regulars call the "death tax" that is being crafted by his conservative colleague from Arizona, Sen. Jon Kyl. While McCain's rhetoric against the very rich passing on their wealth still sounds Democratic, his vote this week will be Republican.

The McCain problem is a major one for his party ... He is the most broadly popular possible Republican candidate, whom Democrats despair of opposing ... Yet, his ability to win closed Republican primaries is questionable because of his apostasy on several issues -- especially tax reduction.  When I asked McCain last week about his views on the estate tax, he made clear how opposed he is to repeal: "I follow the course of a great Republican, Teddy Roosevelt, who talked about the malefactors of great wealth and gave us the estate tax. I oppose the rich passing on fortunes." … I then asked what he will do when the bill comes to the Senate floor after Labor Day. McCain told me he will vote for cloture... McCain also told me he looks to Kyl for a compromise short of total repeal. He added he could support Kyl's plan to keep the estate tax rate at the capital gains rate (currently 15 percent) with an exclusion from taxation of an estate's first $5 million -- compared with 55 percent and $1 million in the basic law. … McCain has been bombarded all summer with attacks on him for opposing repeal. In mid-July, Birmingham, Ala., lawyer Harold Apolinsky, a longtime crusader against the estate tax, sent 23,600 letters to contributors who gave at least $2,000 to 15 senators opposed to repeal. McCain contributors were told: "Sen. McCain has shockingly failed to act on an issue of extreme importance to you." … it asked backers to "contact" McCain and lobby him for his vote. In August, the American Family Business Institute sent letters to all of McCain's supporters recorded as giving him $1,000 or more, requesting their help in changing his vote to support repeal. On Aug. 29, the Club for Growth revealed TV ads personalized for targeted senators -- four Democrats and McCain: "Sen. John McCain wants to keep the death tax. Isn't a lifetime of taxes enough?" The McCain ads are running in New Hampshire, the first presidential primary state.

...he may get away with diverging from the Republican consensus on campaign finance reform, global warming and the highway and energy bills, but tax policy is another matter. ... McCain's willingness to support cloture and a compromise bill signals he recognizes that political reality.

    Posted by on Monday, September 5, 2005 at 10:26 AM in Economics, Politics, Taxes | Permalink  TrackBack (0)  Comments (4)

          

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