McCain’s claims that Obama will raise taxes are wrong

In a speech today, Senator John McCain, who admits freely that he doesn’t really understand economics, repeated the misleading attack that “Senator Obama will raise your taxes.”

“We need to keep the IRS from taking more of your income and making life harder for small business. If you believe you should pay more taxes, I am the wrong candidate for you. Senator Obama is your man. The choice in this election is stark and simple. Senator Obama will raise your taxes. I won’t. I will cut them where I can. Jobs are the most important thing our economy creates. When you raise taxes in a bad economy you eliminate jobs. I’m not going to let that happen. Senator Obama’s tax increases will hurt the economy even more, and destroy jobs across this country.”

In reality, Senator Obama’s plan will not raise taxes and will provide a bigger break for middle class Americans than McCain’s plan. As numerous outside observers agree:

McCAIN’S CLAIMS THAT OBAMA WILL RAISE TAXES ARE “WRONG,” “FALSE,” “MISLEADING”

Washington Post Fact Checker: McCain Campaign Attacks on Obama Tax Plan “Overblown,” “Wrong,” and “Greatly Exaggerated.”

“The McCain camp is attempting to persuade Americans that their taxes will increase dramatically with Barack Obama as president. The presumptive Republican nominee has repeatedly said that Obama would enact ‘the largest tax increase since the Second World War.’ A surrogate, former Hewlett-Packard CEO Carly Fiorina, insists that Obama has not proposed ‘a single tax cut’ and wants to ‘raise every tax in

the book.’ … The claim that Obama will ‘enact’ the largest tax increase since World War II is also overblown. The Bush tax cuts will expire automatically at the end of 2010, so it is hardly a question of ‘enacting’ a new tax increase.

Carly Fiorina is wrong to claim that Obama has proposed no tax cuts and wants to raise ‘every tax in the book.’” [Washington Post, 6/11/08]

Politifact: McCain’s Statement That Obama’s Tax Plan Would Raise Taxes Is False.”

Politifact reported, “So calling it a tax increase might not be considered fair. There’s no disputing that taxes will rise, but the question of who’s responsible for that tax increase is another matter entirely. At PolitiFact, we’ve concluded, as have others, that it’s unfair to call Obama’s plan a tax increase merely because it doesn’t change existing tax law to keep rates low. We think about it this way: The reason taxes will increase is because of tax policy signed into law not by Obama, but by somebody else… the more recent data — combined with the fact that Obama’s proposal does not constitute a tax increase in the traditional sense, since some taxes would be lower under his plan than they would under current law — persuades us to classify McCain’s statement as False.”

[Politifact, 6/11/08]

FactCheck.Org: McCain’s Largest Tax Increase

Charge Wrong and Misleading. According to the Annenberg Public Policy Center’s Factcheck.org:
“By the measure most economists prefer, McCain is wrong in his claim that Sens. Clinton and Obama want to implement “the single largest tax increase since the Second World War;”… At a more basic level, it’s misleading to tag Clinton and Obama for something that was scheduled during the Bush administration – the expiration of the 2001 and 2003 Bush tax cuts, which by law will occur at the end of 2010.”

[Factcheck.org, 5/14/2008]

OBAMA’S TAX PLAN WILL PROVIDE A BIGGER BREAK FOR MIDDLE CLASS FAMILIES THAN MCCAIN’S

According to the non partisan Tax Policy Center’s computations, “under Mr. Obama’s plan, the middle of the middle class, or those earning $37,595 to $66,354, would see taxes cut by $1,042 a year. Under Mr. McCain’s plan, taxes for people in that category would also fall, but by $319; the largest chunk of the benefits would go to those making $2.8 million a year or more.”

[New York Times, 6/13/08]

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The Obama campaign today released an updated report examining John McCain’s economic agenda in light of his remarks in Denver today. Please find below a summary of the analysis on Senator McCain’s claim that he will balance the budget by 2013. You can view the full report here.

Since this memo was first released, Senator McCain has now announced that he would balance the budget by 2013. The Congressional Budget Office (CBO) projects that the unified budget deficit will be $443 billion in 2013 assuming that expiring tax cuts are extended. To balance the budget in that year John McCain would have to pay for all of his campaign proposals plus cut another $443 billion of spending. To give a sense of why this pledge is not credible, cutting spending by $443 billion would require:

• Cutting Medicare by 81 percent OR

• Cutting Social Security, Medicare and Medicaid by 33 percent OR

• Cutting non-defense discretionary spending – which pays for education, veterans, air traffic control and justice – by 79 percent

And these spending cuts would be on top of the hundreds of billions of dollars of spending cuts Senator McCain needs to pay for his existing proposals including: increasing defense spending, cutting corporate taxes, eliminating the Alternative Minimum Tax (AMT), and a small tax cut for middle class families with children (a total of $125 for middle class families with 2 children and $0 for 101 million households who do not qualify). The New York Times has estimated that Senator McCain’s budget plan “will add $200 billion to $300 billion or, depending on his voluntary tax system, even more” annually to the deficit.

Without these offsets and spending cuts, the McCain budget would leave a deficit of at least $650 billion to $750 billion in 2013 alone. No wonder so many Republicans are now reporting that they’ll vote for Barack Obama in November.

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