McCain Slings Right Wing Fairy Tales About Taxes

AN ONGOING BUZZFLASH SERIES ON THE GOP ECONOMIC WAR AGAINST AMERICAN WORKING FAMILIES
by Meg White

Here at BuzzFlash, we don't always have money for all the stuff we want. Included in that unfulfilled wish list is an economic expert. So we've had to rely on outside experts to cut through all the talk on taxes lately. One thing seems to ring true no matter where you go for information: Under a McCain Administration, the GOP war on American working families would continue.

As we've noted before, fairy tales about tax cuts are a familiar weapon in this war, especially during election years. But you don't have to take it from us.

A recent survey of academic economists by the British magazine The Economist shows many respondents tended to agree with us:

"The economists also prefer Mr Obama's tax plans. Republicans and respondents who do not identify with either political party see Mr McCain's tax policies as more efficient but less equitable. But the former prefer Mr McCain's plans -- 43% of Republicans say they are good or very good -- and the latter Mr Obama's. Of non-affiliated respondents, 31% say Mr Obama's are good or very good.

Either way, according to the economists, it would be difficult to do much worse than George Bush."

The article goes on to note that economists might like Obama more because he's not ignorant or hostile toward economic knowledge. In that case, let's look at the actual numbers.

As of Sept. 15, 2008, the nonpartisan Tax Policy Center (TPC) describes the tax plans of the two major party candidates thusly:

"TPC estimates the Obama plan would cut taxes by $2.9 trillion from 2009-2018. McCain would reduce taxes by nearly $4.2 trillion. Obama would give larger tax cuts to low- and moderate-income households and pay some of the cost by raising taxes on high-income taxpayers. In contrast, McCain would cut taxes across the board and give the biggest cuts to the highest-income households."

Read the full report here.

The report goes on to note that Obama's additional tax provisions would also benefit working class families, specifically mentioning credits for mortgage interest, education expenses, and the Making Work Pay credit, as well as an expansion of the Earned Income Tax Credit. The report calls Obama's tax system "significantly more progressive" than McCain's.

As a report from The Washington Post notes, McCain would cut less than 1 percent of taxes for the bottom 60 percent of taxpayers. In contrast, his biggest tax cut of 4.4 percent would be exclusively for the top 0.1 percent of earners, with incomes of $2.87 million and above (the tax bracket in which the McCains find themselves).

If we want to talk about fiscal responsibility, let's be clear: McCain will put us deeper in debt as a nation. While both plans would increase the deficit, McCain's plan would cost more. Making the assumption that the Bush's tax cuts would be repealed in 2010, McCain's plan would spend $1.3 trillion more than Obama's would. If one makes the assumption that the tax cuts would stay, Obama would earn the treasury $700 billion (the same amount as originally requested in Treasury Secretary Henry Paulson's bailout plan), where McCain would cost $600 billion. It seems that if Democrats are the tax and spend party, then Republicans are the spend and spend party.

Median household income rose to just more than $50,000 in 2007, according to the U.S. Census bureau. So, if we use that as our idea of the average American household, under an Obama Administration, that family would save around $1,000 on their taxes next year. The same family would save about $300 under McCain.

Let's say your income is lower than average. Looking at the job loss numbers, it's possible average earned income will be lower next year. What will the working poor get in 2009?

According to a tax cut calculator run by Alchemy Today, which uses the numbers from the TPC report, a single parent making $15,000 a year would get $490.40 under an Obama tax system, while the same person would get a check of $13.74 under McCain's plan.

As Democratic vice presidential nominee Joe Biden said at the debate last week, "Where I come from, it's called fairness, just simple fairness."

In that same debate, McCain's running mate said virtually nothing factual about either plan. In fact, her comments about tax policies ranged from broad generalizations to outright lies.

As highlighted in the Vice Presidential debate, Palin contributes to McCain's obfuscation on economics by claiming their healthcare tax credit would be "budget neutral." Though the campaign hasn't come out and said how much the plan will cost, independent analysts have said it will definitely cost taxpayers. In fact, some say the plan will hit middle class workers hardest.

Another part of the McCain campaign's lies about Obama's tax plan is the "job killer" scare tactic. Palin repeated the lie that millions of small business owners will see their taxes go up under Obama.  But, as Biden so deftly reminded us, 95 percent of small business owners earn less than $250,000 a year, and would therefore get a tax break under Obama's plan.

Not only that, but some would argue the biggest "killer" of jobs is healthcare costs. Just ask General Motors. Obama's plan would shift some of the burden of healthcare from employers to the government, while McCain seems to want to stick it to payrolls across the nation.

After completing an analysis of the two plans published by Health Affairs, the authors of the study conclude that "the McCain plan is a big tax increase on employers and workers. With the economy in recession, that's the last thing America's businesses need." Though one of the four professors who wrote the analysis is an advisor to Obama's campaign, their logic is tough to argue with.

The most insidious thing about McCain's tax plan is the false rhetoric. Not only are his "proposals on the stump are often far more sweeping than the more measured options outlined by his campaign," according to the TPC report, but also his "no new taxes" approach is misleading. Sure, he can technically say, "tax cuts for all," but how much are we paying for tax cuts to the super rich? How much will working Americans pay for the war or the lack of financial regulations?

This is yet another example of what the nonpartisan watchdog group FactCheck.org calls McCain's "pattern of deceit on Obama's tax plan."

For McCain, coming up with a fair, workable economic plan is difficult, but lying is easy.

AN ONGOING BUZZFLASH SERIES ON THE GOP ECONOMIC WAR AGAINST AMERICAN WORKING FAMILIES

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