October 8, 2008
Fact Check: Obama, McCain Stretch the Truth Again in Second Debate
Tax Foundation: Presidential Candidates Exaggerate, Mislead on Tax Policy in Nashville
Washington, DC, October 8, 2008 - In the second of the three Presidential debates, held last night at Belmont University in Nashville, Senators Barack Obama and John McCain largely stuck to their campaign scripts, repeating many of the factually incorrect or highly misleading talking points on tax issues.
Sen. Obama tried to get viewers to believe in his version of history, claiming that since George W. Bush took office, "we have [had a] half-a-trillion-dollar deficit annually." He also said the McCain tax plan would "give the average Fortune 500 CEO an additional $700,000 in tax cuts."
"Obama's deficit figure is way off," says Gerald Prante, a senior economist at the Tax Foundation who has fact-checked the claims from the Presidential candidates. "The highest deficit over the last eight years was $438 billion, and the average over the last 4 years was $292 billion."
"As for the $700,000 figure for CEOs," continued Prante, "that is what the Bush tax cuts saved someone who makes $15 million. Those few CEOs in the Fortune 500 do make that much, but McCain's only ‘additional' personal tax cut for them is to make current tax policy permanent. McCain's corporate tax cut proposal would benefit all employees and investors, so CEOs would benefit from that as well."
Senator Obama's claim to give a tax cut to 95 percent of Americans is also an exaggeration. The Urban-Brookings Tax Policy Center gives him credit for 81 percent, according to Prante.
Sen. McCain chastised past lawmakers by complaining about the national debt, saying that Washington has "to stop this spending spree" because "we've laid a $10 trillion debt on these young Americans," while also touting his plan to double the personal exemption for dependents from $3,500 to $7,000.
"If Sen. McCain is concerned with the national debt, his tax proposals do not show it," says Prante. "Sen. McCain's tax proposals would grow the national debt rapidly, by over $4 trillion in a decade, according to some estimates. He can't cut that much spending by just going after earmarks."
"As for doubling the personal exemption," Prante continues, "Sen. McCain's plan would take 8 years to double the exemption from $3,500 to $7,000. Since even under current law, the exemption would increase to roughly $4,750 due to annual inflation adjustments, it would be more accurate for Sen. McCain to say that he is increasing it by 50 percent. That's still a big increase, but it's not double."
The final Presidential debate will be next Wednesday, October 15, when the Tax Foundation will provide another tax fat-checking analysis.
Read Prante's full debate fact-check at http://www.taxfoundation.org/blog/show/23733.html. Learn more about the Presidential candidates' tax plains at http://www.taxfoundation.org/candidates08.