US News

MAC’S TAX AX A ‘SAVING’ GRACE

Tens of millions of Americans who took a beating in the Wall Street crash would get to recover thousands of dollars under a tax-cutting plan unveiled by John McCain yesterday.

The day after Barack Obama unveiled his economic plan, McCain recommended slashing to 10 percent the federal tax rate on the first $50,000 of withdrawals from an IRA or 401(k) retirement account. Current rates are as high as 35 percent because distributions of retirement savings are taxed as ordinary income.

MORE: Obama Fires A Robin Hood Warning Shot

MORE: O Poster Expelled At City HS

MORE: McCainiac Names Tot After GOP Ticket

MORE: Barack Backs Away From ACORN

OPINION: Obama Tells The Tax Truth

Many senior citizens and workers have seen a dramatic plunge in the value of their tax-deferred retirement funds in the Wall Street meltdown.

The Republican candidate’s campaign said 9 million people above the age of 60 would be able to get some relief under the plan.

“Retirees have suffered enough and need relief, and the surest relief is to let them keep more of their own savings,” McCain said in Blue Bell, Pa.

As he first mentioned last week, McCain also called for suspending the rule that requires seniors to start withdrawing funds from retirement accounts no later than six months after they reach age 701/2.

In theory, that would give the accounts time to recoup losses as the stock market improves.

Other working Americans who got hammered by the stock sell-off also would be able to recover thousands of dollars in losses under the McCain plan.

McCain would increase the amount of capital losses to be written off on individuals’ tax returns to $15,000 a year from $3,000.

Moreover, McCain said he will stimulate the market with new investment by slashing the capital gains tax in half – to 7.5 percent from 15 percent for investors buying and holding shares a year or more.

“This vital measure will promote buying, raise asset values, help companies and shore up the pension plans for workers and retirees,” he said.

Meanwhile, about 3.6 million hard-pressed Americans collecting unemployment checks also would see more money in their pocket.

McCain proposed making unemployment benefits tax-free through next year.

McCain’s $52.5 billion “Pension and Family Security Plan” comes a day after Democratic rival Obama announced his own plan, which includes a tax credit for firms that create jobs, and would allow younger people to take up to $10,000 in penalty-free early withdrawals from retirement funds.

The fiscal crisis is expected to be a dominant topic in tonight’s final presidential debate at Hofstra University on Long Island.

McCain did not spell out how he would pay for the additional tax relief.

Warning that pundits have counted him out before, McCain insisted last night in New York that he can catch up with Obama and win the presidency.

“People said I was done [during the Republican primary],” McCain told supporters at a fund-raising bash at the Grand Hyatt.

McCain was joined by running mate Sarah Palin. The heavyweights in attendance included Donald Trump and actor Steve Baldwin.

With polls showing him trailing Obama, McCain said voters would get buyer’s remorse with the Illinois Democrat.

“The reason we’re going to win is the American people know the difference between rhetoric and a record,” he said.

For her part, Palin said Obama’s effort to tie McCain to unpopular President Bush is “wearing thin.”

She also took a veiled swipe at Obama’s relationship with the left-wing group ACORN. “There’s anger about voter fraud across the country,” she said.

carl.campanile@nypost.com