Don't Mention The $3 Trillion Dollar Elephant In The Room

John McCain's campaign is going back to the traditional Republican well of painting their opponent as a tax-raising nutcase. That's typical. When pressed about his own calls for tax increases, McCain hews to Republican orthodoxy:

McCain has called for a bipartisan effort to fix Social Security and infuriated some conservatives by saying that everything, including increasing payroll taxes, could be on the table. He said today that "you know I'm opposed to tax increases" when Isaacson asked him about it. "I think I can convince people on the other side of the table that we do not need tax increases.''

When Isaacson said the proposal would have to be on the table to be negotiated off the table, McCain drew a smattering of laughter when he said "I have to be against tax increases, as you know.''

Forced to put party before country. That's straight talk you can believe in!

However, McCain's leaving something out. In fact, as Obama advisors Jason Furman and Austan Goolsbee write in the Wall Street Journal, while McCain would continue to massively cut taxes for the wealthy and corporations and starve the federal treasury, mounting up deficits like no President before him, his health care plan includes a tax increase ranging into the trillions of dollars.

But Sen. McCain's plan does include one new proposal that would result in higher taxes on the middle class. As even Sen. McCain's advisers have acknowledged, his health-care plan would impose a $3.6 trillion tax increase over 10 years on workers. Sen. McCain's plan will count the health care you get from your employer as if it were taxable cash income. Even after accounting for Sen. McCain's proposed health-care tax credits, this plan would eventually leave tens of millions of middle-class families paying higher taxes. In addition, as the Congressional Budget Office has shown, this kind of plan would push people into higher tax brackets and increase the taxes people pay as their compensation rises, raising marginal tax rates by even more than if we let the entire Bush tax-cut plan expire tomorrow.

You'd think that'd be something you'd want to put front and center if you're the Obama campaign.

As for their tax plans, contrary to McCain's ads, Obama would cut taxes for about 95% of workers and let the Bush cuts for the wealthy expire.

Overall, Sen. Obama's middle-class tax cuts are larger than his partial rollbacks for families earning over $250,000, making the proposal as a whole a net tax cut and reducing revenues to less than 18.2% of GDP -- the level of taxes that prevailed under President Reagan [...]

Sen. Obama believes a focus on the middle class is appropriate in the wake of the first economic expansion on record where the typical family's income fell by almost $1,000. The Obama plan would cut taxes for 95% of workers and their families with a tax cut of $500 for workers or $1,000 for working couples. In addition, Sen. Obama is proposing tax cuts for low- and middle-income seniors, homeowners, the uninsured, and families sending a child to college or looking to save and accumulate wealth.

You can see the whole plan here. I agree with Matt Yglesias here - Obama ought to know, as he makes the argument earlier in the piece, that the Clinton-era rates of taxation still allowed for robust job growth. He's actually cutting revenues relative to the 1990s, at a time when our infrastructure is crumbling, our health care needs are soaring, and local and municipal governments are terribly constrained. I understand the impulse to say "we're cutting taxes too!" but I think Obama goes too far here and if he continues to get boxed in by anti-tax rhetoric he'll have a devil of a time implemented the programs he wants.

Then again, just making corporations PAY taxes would be an incredible boost. Why aren't progressives arguing for an alternative corporate minimum tax?