September 27, 2008
Obama, McCain Play Loose with Truth on Tax Policy in First Debate
Tax Foundation Fact-Checks Claims from Democratic, GOP Presidential Candidates
Washington, DC, September 27, 2008 - In the first president debate between Senators Barack Obama and John McCain, both candidates made claims about taxes that played somewhat loose with the facts.
In Tax Foundation Fiscal Fact No. 148, "McCain and Obama Both Play Loose with Faces on Tax Issues in First Debate," Tax Foundation Senior Economist Gerald Prante analyzes the first presidential debate held at the University of Mississippi, a conversation that was originally supposed to be about foreign policy, but started off with the economy due to the financial situation in the United States.
Prante critiques Senator Obama's attack on McCain's tax plan as a proposal that would give "CEOs of Fortune 500 companies an average of $700,000 in reduced taxes, while leaving 100 million Americans out." The "$700,000 in reduced taxes for CEOs" comes from McCain's extending of the lower tax rates that those CEOs benefit from that were in place under the Bush tax cuts. When Obama uses that number, he is citing it relative to a baseline that assumed the Bush tax cuts were repealed. But when Obama talks about the "leaving 100 million Americans out" figure for McCain's tax plan, he is assuming that the Bush tax cuts are left in place with an Alternative Minimum Tax (AMT) patch.
"Obama is basically comparing apples and oranges, and thereby misleading the American people," Prante explains. "It's kind of like Obama telling you that the Georgia Bulldogs are 4-0 and the St. Louis Rams are 0-3 without telling you the fact that the Georgia Bulldogs play college football and the St. Louis Rams play professional football. He is implying that the two figures are comparable regarding the quality of the tax plans."
Prante also critiques Senator McCain's attack on Obama's tax record. McCain accused Obama of voting for tax hikes on those making as little as $42,000. Yet that was a non-binding Senate vote earlier this year, and it is significantly different from what Obama is proposing as a candidate. Very few households making $42,000 per year would pay more in taxes under Obama's tax plan.
"You may say that Obama is voting one way and proposing something else on the campaign trail," says Prante. "But if that's fair, then McCain's drastic change of heart on the Bush tax cuts is fair game as well. McCain voted against the 2001 and 2003 tax cuts, but now supports extending almost all of them with the exception of the full repeal of the estate tax."
The Tax Foundation will be doing the same fact checking on tax issues after each of the presidential debates, as well as next week's vice-presidential debate. Fiscal Fact No. 148 can be found at http://www.taxfoundation.org/research/show/23681.html.
The Tax Foundation is a nonpartisan, nonprofit organization that has monitored fiscal policy at the federal, state and local levels since 1937.
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To schedule an interview to discuss the Presidential candidates' tax proposals, please contact Matt Moon, the Tax Foundation's Manager of Media Relations, at (202) 464-5102.
