There He Goes Again: Factcheck Catches McCain Lying About Obama’s Tax Plan

John McCain seems to believe that he can keep repeating the same lies and there won’t be any political consequences. He has a new ad out repeating the same lies as he has told in the past about Obama’s tax policies, leading to put out a report entitled There He Goes Again. Their summary states:

The McCain-Palin campaign has released a new ad that once again distorts Obama’s tax plans.

  • The ad claims Obama will raise taxes on electricity. He hasn’t proposed any such tax. Obama does support a cap-and-trade policy that would raise the costs of electricity, but so does McCain.
  • It falsely claims he would tax home heating oil. Actually, Obama proposed a rebate of up to $1,000 per family to defray increased heating oil costs, funded by what he calls a windfall profits tax on oil companies.
  • The ad claims that Obama will tax “life savings.” In fact, he would increase capital gains and dividends taxes only for couples earning more than $250,000 per year, or singles making $200,000. For the rest, taxes on investments would remain unchanged.

The McCain campaign argues in its documentation for this ad that, whatever Obama says he would do, he will eventually be forced to break his promise and raise taxes more broadly to pay for his promised spending programs. That’s an opinion they are certainly entitled to express, and to argue for. But their ad doesn’t do that. Instead, it simply presents the McCain camp’s opinion as a fact, and it fails to alert viewers that its claims are based on what the campaign thinks might happen in the future.

There is more information in the body. Taking up the last point, it is true that Obama’s campaign promises don’t totally add up and he will have to scale them back, increase taxes, or (as he states he plans) engage in deficit spending. This is probably true of all politicians as campaigns lead them to promise more than they can really afford. The problem here for McCain is that his tax policies fail even worse at adding up as his promised tax cuts would increase the deficit more than Obama’s spending plans. Factcheck points out:

It’s certainly true that Obama’s proposed spending is lower than his projected revenues, and Obama has made no secret of the fact that his plan will not result in balanced budgets for the next four years. According to the Tax Policy Center, without spending cuts elsewhere, Obama’s proposals could lead to between $3.6 trillion and $5.9 trillion in new debt over 10 years. The McCain-Palin campaign is certainly entitled to argue that that level of debt is unsustainable and that Obama would therefore have to raise taxes.

That, however, is a dangerous argument. The same Tax Policy Center analysis shows that McCain’s proposals would raise the debt by between $5.1 trillion and $7.4 trillion over 10 years. And while McCain has promised to balance the budget by 2013, the Tax Policy Center notes that doing so would require a 25 percent reduction in federal spending. Few economists outside the McCain-Palin campaign think that is a feasible goal. So, by the ad’s logic, Obama could just as easily claim that McCain supports a massive tax increase.

As the article points out, McCain has been exaggerating the impact of an increase in capital gains taxes under Obama. Many conservatives have accused Obama of doing this to “redistribute the wealth” as they try to portray him as some type of socialist, ignoring the free-market philosophy of his economic advisers from The University of Chicago. While Obama would increase the top capital gains tax for couples making over $250,000, he would increase it to a top rate of 20%, which is significantly less than it was under Ronald Reagan. By their logic, Ronald Reagan would be the socialist, not Obama.

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