The claim: Sen. John McCain's camp is attempting to convince Americans that their taxes will increase dramatically with Sen. Barack Obama as president. He has repeatedly said that Obama would enact "the largest tax increase since the Second World War." A surrogate for McCain, former Hewlett-Packard CEO Carly Fiorina, said Obama has not proposed "a single tax cut" and wants to "raise every tax in the book."
Fact checker: Tax policies
June 12, 2008 at 1:09AM
The set-up: McCain would like to make permanent President Bush's tax cuts of 2001 and 2003, and has proposed a few of his own. Obama favors allowing the tax cuts to expire as scheduled for Americans earning more than $250,000 a year.
Obama would raise taxes on capital gains and dividends, but has also promised tax breaks for lower- and middle-income Americans. McCain's speech this week leaves the impression that Obama favors raising taxes on all Americans.
To substantiate its assertion that large numbers of ordinary Americans will be worse off under the Democrats, the McCain camp points to Obama's proposal to raise tax rates on dividends and capital gains. Obama's advisers argue that any tax increases would be offset by credits for lower-income families. They also point out that most middle- and lower-income families invest in the market through 401(k) plans, which are exempt from capital gains taxes.
The analysis: Maya MacGuineas, a budget expert at the New America Foundation, said the McCain camp is trying to create an exaggerated impression of the number of people from lower- and middle-income groups who would be hurt by Obama's tax proposals. "It is legitimate to say that they can find a cleaning person or a waitress somewhere who will be affected, but the numbers should not be overwhelming," she said.
McCain's statement that Obama will "enact" the largest tax increase since World War II is also overblown. Bush's cuts will expire automatically at the end of 2010, so it is hardly a question of "enacting" a new tax increase. According to Obama economics adviser Jason Furman, the revenue raised from letting the tax cuts expire will be returned to middle- and lower-income taxpayers in the form of tax credits to pay for health insurance, so the overall effect will be revenue-neutral.
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While the focus was on Vice President Kamala Harris in their first media interview of the presidential campaign, Walz was asked if voters could take him at his word.
