Joe Should Talk Cap-Gains — and So Should Big Mac

It’s possible that John McCain can leverage Joe the Plumber into a tighter race in the last two weeks of the campaign.

Yesterday on Fox News McCain hammered Obama on taxing the rich and spreading the wealth by calling him a left-liberal socialist. After all, McCain argued, redistribution is a key tenet of socialism. And for the first time I heard McCain talk about a plan for economic recovery. He also talked about making the economic pie larger, rather than redistributing the existing slices, and he said he wanted to show voters how to get the economy out of the ditch by keeping taxes low.

This is all very good. McCain is now making taxes and economic recovery the centerpiece of his campaign message. And if Joe the Plumber stimulated this from Big Mac, all the better.

Of course, the plumber can’t win it for McCain. It’s up the senator to make the sale. But by refocusing on taxes and economic recovery McCain is really for the first time connecting to the front-page headlines of economic angst and financial freeze. Those are the top issues of this election.

Regrettably, McCain is not reaching out directly to investors by talking about his 7.5 percent capital-gains tax cut and his $15,000 capital-loss tax deduction. Nor is he arguing that his corporate tax cut is really a consumer — and therefore a middle-class — tax cut, since businesses pass the tax costs along in the form of higher prices.

But if Sen. McCain can get the capital-gains tax cut into his message, and if he can repackage the corporate tax cut as a Main Street tax benefit, he would stand a much better chance of getting his margins up with the heavy-voting investor class.

The just-released IBD/TIPP poll shows McCain has retaken the lead among investors with a small margin of 45-43 over Obama. Yesterday Obama was plus-2 among investors, and the day before he was plus-6. So something positive may be going on here for McCain.

Remember, Bush won investors by 11 points in 2004. And no Republican can win the presidency without a big investor vote margin. However, McCain is trailing Obama among married women, 46-42. He should be ahead by 10. And he’s only getting 65 percent of the conservative vote, whereas he should be getting 75 or more. Overall, IBD/TIPP has Obama plus 5.3, almost identical to the RealClear poll average of 5.2 percent. Rasmussen shows Obama at plus-4; Zogby has him plus-6; and Gallup has him plus-5.

So my advice to Sen. McCain is to start talking capital-gains tax cut to 7.5 percent. It’s a winner with the stock market sagging badly. Stocks will come back — in fact there’s a mini rally cooking right now. And a low cap-gains tax is a great incentive for investor-class wealth creation. Obama is going to penalize investors. But McCain will reward them.

If I had Joe the Plumber’s phone number — since he is the most influential McCain advisor — I’d tell Joe to talk cap-gains, too.