He would eliminate the Alternative Minimum Tax, which has eaten into the incomes of middle-class Americans. This move would cost $60 billion a year, according to campaign estimates.
McCain would double the personal exemption for dependents from $3,500 to $7,000, reduce the corporate tax rate from 35 to 25 percent, and establish a permanent new research-and-development tax credit. At the April 15 speech outlining his economic plan, he also called for the elimination of the federal gasoline tax this summer – a move that, strictly speaking, the next president would have to go back in time to accomplish.
McCain's tax cuts (excluding the gas tax holiday) would cost some $200 billion a year, according to his campaign. They would be offset by eliminating pork-barrel projects from the federal budget, freezing nondefense discretionary spending for at least one year, and reducing the growth of Medicare spending, among other moves.
As for the populist part, McCain railed against the extravagant salaries and severance deals of CEOs in his April 15 speech. Since then, he's toured small towns hard hit by the economic downturn and praised their work effort and role in the US economy. At the same time, he said increased government spending is not the answer to their woes.
Government "can't do your work for you," McCain said on April 23 in Inez, Ky. "And you've never asked it to."
Nationally, McCain is known for his security credentials, not his economic ones, note political analysts. McCain famously once said that he did not know much about the economy, notes Cal Jillson, a professor of political science at Southern Methodist University in Dallas.
"He and his people decided they needed to address that [misstep]," Professor Jillson says.