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Still, his goals are clear enough. He is committed to his emergency employment program and to a $15 billion increase in federal aid to education that would enable states and cities to reduce property taxes. He also wants a $14 billion welfare program that would give an annual $4,000 in cash and food stamps to a family of four that has no other income. Other families would get enough to raise their income to $4,000, if they do not already earn that much. (Nixon's rhetorical attacks on McGovern's "welfare ethic" notwithstanding, the President himself did a great deal to make the idea of an income guarantee politically respectable by proposing one of $2,400 for a family of four, but he made no effort to stop Congress from killing the plan.)
In addition, McGovern would spend liberally on a long list of other programs, including mass-transit rehabilitation, pollution control, an expanded G.I. Bill of Rights for Viet Nam veterans and even, regrettably, higher farm-price supports. He has promised farmers supports at 90% of parity v. 75% now. The exact amounts of new expenditures would depend on how much he could pare defense outlays and how much new revenue he could raise.
TAXES. This is really two issues: revenue and equity. On the revenue side, oddly, Nixon and McGovern come out at the same point. Though McGovern's budget would be much higher than Nixon's by 1975, each would be spending around $20 billion more than his tax policy would bring in, even at full employment. That large a "full-employment deficit" could ignite a rapid inflation.
Though Nixon vows to cut spending enough to eliminate the full-employment budget deficit, chances that he can do it are almost nil. The American Enterprise Institute calculates that he will have to put a walloping 11% surcharge on individual and corporate income taxes by 1975, or find some other way of raising $20 billion. The Administration once toyed with the idea of a value-added tax, a kind of national sales levy, but Herbert Stein, Nixon's chief economist, now says that the President will not recommend one. Nixon is already struggling to pin on the Democratic donkey the tail of blame for some other type of tax increase. In a pledge that has greatly impressed voters, he vows that there will be "no presidential tax increase"—but he adds that there may be a "congressional increase" forced by Democratic spenders. And unless McGovern reduces his spending programs or countenances swift inflation, he has little chance of fulfilling his pledge that "no American whose income comes from wages or salaries would pay one penny more in federal taxes than he does now." If McGovern stuck to all his spending plans and got them all through Congress—two unlikely assumptions—his tax increases would have to exceed Nixon's.
On the equity side of the issue, McGovern is quite precise. He proposes tax reforms that would raise $22 billion a year from affluent people and corporations. Major changes:
> Raise the capital gains tax on the sale of securities or property to the full rates levied on ordinary income. At present, capital gains are usually taxed at half those rates. As an offset, the top income tax rates of 50% on salaries and 70% on dividends, interest and rent would be lowered to 48%.