PHILADELPHIA, Pennsylvania (AFP) — Republican John McCain on Tuesday offered his own prescription for easing Americans' economic pain as he struggled to regain a foothold in the White House race increasingly dominated by his Democratic rival.
With polls showing more US voters trust Barack Obama to handle the economic crisis, McCain unveiled a series of proposed measures aimed at helping retirees, workers and mortgage holders keep their savings and their homes.
The Arizona senator called for trimming taxes on older Americans dipping into their retirement accounts, and for suspending tax rules he said "force seniors to sell their stocks in the midst of this financial crisis."
He said he would accelerate a tax write-off for those forced to sell at a loss in the current market conditions, and reduce capital gains taxes for 2009 and 2010 "to raise the incentive to save and invest," according to a statement outlining the proposals.
Older Americans "have seen the financial markets undertake a daily assault on their life savings in recent weeks," the statement said. "Families are being forced to sell at a loss to meet their bills."
McCain said withdrawals from retirement accounts -- IRAs and 401(k)s -- should be taxed at the lowest rate, ten percent, this year and next, for the first 50,000 dollars withdrawn from such accounts each year.
The Republican further proposed reducing the maximum tax rate on long term capital gains to 7.5 percent in 2009 and 2010, so as not to penalize Americans forced to sell stocks in current conditions.
The Arizona senator last week unveiled a "McCain Resurgence Plan" to purchase mortgages directly from homeowners and mortgage servicers, and replace them with fixed-rate mortgages, enabling families to stay in their homes.
He said Tuesday the direct cost of the program would be 300 billion dollars, to be drawn from the 700 billion dollar rescue plan recently approved by Congress.
And he called for exempting unemployment benefits from taxation, noting that 3.6 million Americans are currently receiving such benefits.
McCain Monday desperately sought to win back voters hit by the economic crisis and flocking in droves to Democrat Barack Obama, saying he had a plan to stop the meltdown.
"What America needs in this hour is a fighter; someone who puts all his cards on the table and trusts the judgment of the American people," the Republican presidential nominee told a rally in Virginia, a key swing state in the 2008 White House race.
Unveiling his own latest proposals Monday, Obama proposed a 90-day moratorium on home foreclosures, a new lending facility for US states and cities, penalty-free withdrawals from savers' retirement accounts, and rolled out a 3,000 dollar tax credit for every job created by a company in the United States.
Top McCain adviser Doug Holtz-Eakin countered that his boss's new proposals would be "far superior" to those offered by Obama.
Holtz-Eakin warned that Obama's policies are "threatening the American economy with tax increases, explosive spending proposals, expensive health mandates a weak energy policy and protectionist trade inclinations."
"It's a set of policies that will in fact kill jobs and make things harder, and part of the problem is he's also spending money hand over fist."
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