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September 10, 2008

McCain’s Biggest Lies Are About Obama’s Tax Cuts

Posted in: 2008 Election,Barack Obama,Economy,John McCain


For weeks McCain’s negative, dishonest ads have carried several themes, such as Obama’s supposed celebrity, or references to experience or judgment. It’s easy to be distracted by the irrelevant celebrity images, but they’re a cover for repeating, over and over, a central lie of the McCain campaign.

If you watch McCain’s ads carefully, virtually all (except for the total sleaze ads that the media are now condemning) contain some version of the lie that Obama would increase taxes on everyone. He repeats the lie in every appearance.

Representative King echoed these claims on Hardball Tuesday, but Debbie Wasserman-Schultz correctly countered that 95 percent would actually benefit from Obama’s plans. The video shows McCain repeating the same claim that McClatchy fact checks in one of McCain’s typical ads:

"Obama and his liberal allies promise higher taxes on your income, life savings, your electric bill. They oppose offshore drilling," the ad says.

Repeating the tax lie is central to McCain’s campaign; indeed getting lies accepted as truth has become the essence of the McCain campain. It is what being a "maverick" has come to mean. So it does not matter that independent analyses show McCain’s claim is patently false.

A clear refutation of the lie appears in a must-read article, How Obama Reconciles Conflicting Views on the Economy, by David Leonhardt, which previewed in the New York Times on August 24 and appeared again in the Sunday Times Magazine. It’s an excellent discussion of Obama’s overall economic views, which I suspect will surprise even some here.

On Obama’s tax proposals, Leonhardt explains why McCain’s claims are simply false:

The Tax Policy Center, a research group run by the Brookings Institution and the Urban Institute, has done the most detailed analysis of the Obama and McCain tax plans, and it has published a series of fascinating tables [link]. For the bottom 80 percent of the population — those households making $118,000 or less — McCain’s various tax cuts would mean a net savings of about $200 a year on average. Obama’s proposals would bring $900 a year in savings. So for most people, Obama is the tax cutter in this campaign.

. . . Most of the public discussion about taxes tends to focus on the income tax, which taxes the affluent at a considerably higher rate than anyone else. But the income tax doesn’t take the biggest bite out of most families’ annual tax bill. The payroll tax does. And even as the federal government has been reducing income taxes over the last few decades, it has allowed the payroll tax, which finances Social Security and Medicare, to creep up. . . .

Obama’s second-most-expensive proposal, after his health-care plan, is the equivalent of a $500 cut in the payroll tax for most workers. (It is actually a credit that is applied toward income taxes based on payroll taxes paid.) In a speech this month in Florida, he proposed that the cut take effect immediately, in the form of a rebate, to stimulate the economy. For most workers, it would be the first significant cut in the payroll tax in decades, if not ever. . . .

[In addition to other tax breaks to benefit the middle class . . .]

He would then pay for the cuts, at least in part, by raising taxes on the affluent . . . For these upper-income families, the Tax Policy Center’s comparisons with McCain are even starker. McCain, by continuing the basic thrust of Bush’s tax policies and adding a few new wrinkles, would cut taxes for the top 0.1 percent of earners — those making an average of $9.1 million — by another $190,000 a year, on top of the Bush reductions. Obama would raise taxes on this top 0.1 percent by an average of $800,000 a year.

. . . The bulk of Obama’s tax increases on the wealthy — about $500,000 of that $800,000 — would simply take away Bush’s tax cuts. The remaining $300,000 wouldn’t nearly reverse their pretax income gains in recent years. Since the mid-1990s, their inflation-adjusted pretax income has roughly doubled. [emphasis added]

McCain is not only lying about Obama’s tax cuts; he’s trying to avoid talking about the basic unfairness of the tax system — the huge advantage for the very rich — that the McCain/Bush tax policies would perpetuate. By obscuring that unfairness, McCain can pretend to be a champion for the middle class, even though he’s not. Obama not only cuts taxes for most Americans; he does it in a way that starts to reverse the serious unfairness that has been built into the tax system since Ronald Reagan.



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