The McCain Resurgence Plan Looks Good For Retirement Accounts And Mortgage Holders
McCain will propose the following:
- John McCain Proposes That Withdrawals From Tax-Preferred Accounts - IRAs And 401(k)s - Should Be Taxed At The Lowest Rate - 10 Percent - In 2008 And 2009. This policy will apply to the first $50,000 withdrawn from these accounts each year and will affect the accounts of nearly nine million Americans over the age of 60, permitting them to devote more of their income to retirement needs.
- John McCain Has Called To Suspend The Tax Rules That Force Seniors To Sell Their Stocks In The Midst Of The Most Grave Financial Crisis Of Our Lifetime. Under current law, Americans with tax-preferred IRA and 401(k) accounts must begin to sell off their equities when they reach age 70½ – unless they continue to work, in which case they must sell when they retire. Forcing seniors to sell at this time guarantees less to live on during retirement and could affect over four million seniors. John McCain believes this should be immediately waived.
- John McCain Will Not Penalize Those Forced To Sell Off In Today’s Tough Markets. John McCain believes that we should increase the amount of capital losses which can be used in tax years 2008 and 2009 to offset ordinary income from $3,000 to $15,000.
- John McCain Will Strengthen Incentives To Save, Invest, And Restore The Liquidity Of Markets. John McCain proposes a reduction in the maximum tax rate on long term capital gains to 7.5 percent in 2009 and 2010.
The McCain Resurgence Plan also includes
The McCain Resurgence Plan Would Purchase Mortgages Directly From Homeowners And Mortgage Servicers, And Replace These Mortgages With Manageable, Fixed-Rate Mortgages That Will Keep Families In Their Homes. By purchasing the existing, failing mortgages the McCain resurgence plan will eliminate uncertainty over defaults, support the value of mortgage-backed derivatives and alleviate risks that are freezing financial markets.
The McCain Resurgence Plan Would Be Available To Mortgage Holders Who Live In Their Primary Residence And Can Prove Their Creditworthiness At The Time Of The Original Loan. The new mortgage would be an FHA-guaranteed fixed-rate mortgage at terms manageable for the homeowner.How The Program Works:
· An American buys a house that is his or her primary residence for $250,000 with a conservative, 20 percent downpayment ($50,000 down).
· His or her community property values fall by 30 percent, leaving him or her with a home worth $175,000 and a mortgage still worth $200,000.
· Under the McCain Plan, their mortgage would be retired, and they would receive a new, FHA guaranteed, 30-year fixed mortgage, at a low interest rate that reflects historical norms and the current market value of his home.
The Direct Cost Of This Plan Would Be About $300 Billion And Will Represent A Portion Of The $700 Billion Provided By Congress In The Recent Financial Market Stabilization Bill. The purchase of mortgages would relieve homeowners of “negative equity” in some homes. By stabilizing mortgages it will likely be possible to avoid some purposes previously assumed needed in that bill.
Ed:
That would direct much of the funding for the bailout of mortgage-backed securities to the actual homeowners rather than the investors who bought the securities. That would indirectly stabilize the MBSs while not providing a direct bailout to the speculators who built derivatives on derivatives. It’s not a great solution ” there simply isn’t any “great solution” to be had ” but if the bailout exists, it’s not a bad direction in which to take it. Keeping it limited to primary residences (no investment properties) and only those homeowners who would have qualified for the mortgage under normal lending rules helps weed out the people who took unnecessary risks, while supporting those who got victimized by the government-created housing bubble.
October 14, 2008 - 07:55 AM on October 14th, 2008
McCain’s new economic plan designed to fix the economy and well as rescue individuals by lowering the tax burden…
My read is that it is a good plan that makes a lot more sense than Obama’s socialist plan based upon the Democrats Marxist agenda. As Ed Morrissey points out, the plan offers both lowered capital-gains taxes and higher deductions for stock losses, bot…
October 14, 2008 - 08:50 AM on October 14th, 2008
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