Presidential hopeful Sen. John McCain, R-Ariz., proposed cutting the corporate tax rate to 25 percent from 35 percent, matching Rudolph Giuliani's plan.

He cited a recent Treasury Department analysis that estimated a tax cut of less than half that size could increase long-term growth by 0.5 percent, or $100 billion a year. "Now is the time to stimulate our economy," said McCain.

He also proposed allowing a first-year deduction, or expensing, of equipment and technology investments, saying it would provide an immediate boost to capital expenditures. McCain cited another Treasury study that estimated a modest expensing provision would provide a gain of 1.5 percent in long-term economic growth.

McCain also called for establishing a permanent tax credit equal to 10 percent of wages spent on research and development. His campaign said an R&D tax credit would provide a permanent incentive to innovate and remove the uncertainly now hanging over businesses as they make R&D investment decisions.

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