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Stephen C. Rose

Stephen C. Rose

Posted: August 9, 2008 08:05 AM

McCain's "Tax and Spend" Bogeyman


By Stephen C. Rose

Jack Kemp has written what, to me, is a stellar piece of propaganda over at Town Hall. It's called Obama Versus McCain on the Economy. It sounds quite convincing, but it also contains the very same lies that John McCain has used in ads that characterize Obama as a compulsive raiser of taxes who will clean out the nest eggs of the beleaguered middle class.

What strikes me about Kemp's piece, as the comments included with it confirm, is that it has a ring of truth. It is the McCain argument. And if Obama cannot figure out a way to state his side convincingly, it is possible that McCain will win the economic argument. Let me begin by posting Kemp's conclusion:

Except for the badly confused carbon cap and trade plan, which McCain unfortunately shares with Obama, his economic program of cutting taxes, sharply restraining spending, balancing the budget, free trade and increased energy production are exactly what our economy needs right now. We believe John McCain's policies give us the best chance for a new economic boom in the 21st century, such as that we had in the 1960s under President Kennedy, and in the 1980s and 1990s under Presidents Reagan and Clinton.


And here is what Kemp says about Obama's economic program.

Barack Obama has proposed not to cut tax rates, but to increase every single major federal tax, except for his "George McGovern-like" tax rebate of $1,000. Barack has proposed to increase individual income tax rates to 39.6 percent. He has proposed to increase capital gains taxes, from 15 percent to somewhere between 20 percent and 28 percent. Incredibly, he has proposed to more than double the tax rate on dividends, from 15 percent to 39.6 percent. He has proposed to increase payroll taxes on workers earning over $250,000 a year to 12.4 percent on income above that threshold and to restore the estate tax to the confiscatory rate of 55 percent. Ugh!


Here is the problem. Obama has only proposed tax increases for those earning over $250,000.

The extent to which the Kemp-McCain attack on Obama is a tissue of lies is revealed in one of the most extensive pieces I have ever seen at FactCheck.org. The title states: "McCain misrepresents Obama's tax proposals again. And again, and again."

McCain released three new ads with multiple false and misleading claims about Obama's tax proposals.


* A TV spot claims Obama once voted for a tax increase "on people making just $42,000 a year." That's true for a single taxpayer, who would have seen a tax increase of $15 for the year - if the measure had been enacted. But the ad shows a woman with two children, and as a single mother, she would not have been affected unless she made more than $62,150. The increase that Obama once supported as part of a Democratic budget bill is not part of his current tax plan anyway.

* A Spanish-language radio ad claims the measure Obama supported would have raised taxes on "families" making $42,000, which is simply false. Even a single mother with one child would have been able to make $58,650 without being affected. A family of four with income up to $90,000 would not have been affected.

* The TV ad claims in a graphic that Obama would "raise taxes on middle class." In fact, Obama's plan promises cuts for middle-income taxpayers and would increase rates only for persons with family incomes above $250,000 or with individual incomes above $200,000.

* The radio ad claims Obama would increase taxes "on the sale of your home." In fact, home-sale profits of up to $500,000 per couple would continue to be exempt from capital gains taxes. Very few sales would see an increase under Obama's proposal to raise the capital gains rate.

* A second radio ad, in English, says, "Obama has a history of raising taxes" on middle-class Americans. But that's false. It refers to a vote that did not actually result in a tax increase and could not have done so.

These ads continue what's become a pattern of misrepresentation by the McCain campaign about his opponent's tax proposals.


FactCheck goes on:

McCain's pattern is of misrepresenting Sen. Barack Obama's tax proposals as falling on middle-income families. It claims that Obama "promises more taxes on small businesses, seniors, your life savings, your family." But that's untrue for the vast majority of small businesses, seniors and individual taxpayers, who would see their taxes go down under Obama's actual plan. He proposes to increase taxes only for those with more than $250,000 in family income, or $200,000 in individual income.


Of the McCain ad "Recipe" FactCheck notes:

It says: "Official records document, Barack Obama has a history of raising taxes - even on middle class Americans making just $42,000 a year." But that's false. No taxes were increased, and the vote that the McCain campaign refers to could not by itself have resulted in any increase on anybody.


FactCheck says McCain is guilty of "a continuing pattern of deceit ... with McCain repeatedly misrepresenting what Obama is proposing."

Here are some of McCain's previous false claims...


* McCain falsely claimed Obama's plan would increase taxes on 23 million small-business owners, when the vast majority of them would get a cut. Any increase would actually fall only on the most affluent, a few hundred thousand business owners.

* McCain falsely claimed Obama "says he'll raise taxes on electricity," though Obama has said no such thing and his tax plan contains no proposal for a tax on electricity.

* As noted already, McCain falsely claimed Obama once voted for a Democratic budget bill that called for raising taxes on persons making as little as $32,000 a year, when in fact the proposal would not have affected anyone with total income under $41,500 a year, or $83,000 for a married couple with no children.

* McCain stated that Obama would raise taxes "if you have an investment for your child's education or own a mutual fund or a stock in a retirement plan." This was found to be "false" by our colleagues at Politifact.com, and we concur.


What to do? How can Obama counter blatant untruths?

Kemp and McCain will continue to say that Obama will tax everyone. Kemp even quotes Jack Kennedy.

"It's a paradoxical truth that tax rates are too high today and tax revenues are too low, and the soundest way to raise revenues in the long run is to cut the rates now." Those are the words of President John F. Kennedy in 1962. He went on to say, "The purpose of cutting taxes now is not to incur a budget deficit but to achieve the more prosperous, expanding economy which can bring a budget surplus."


Somehow the big lie that Obama is a tax and spend liberal needs to be opposed by the facts.

In Barack Obama's Cooper Union speech on the economy last March he said:

Wall Street has been gripped by increasing gloom over the last nine months. But for many American families, the economy has effectively been in recession for the past seven years. We have just come through the first sustained period of economic growth since World War II that was not accompanied by a growth in incomes for typical families. Americans are working harder for less. Costs are rising, and it's not clear that we'll leave a legacy of opportunity to our children and grandchildren.


That's why, throughout this campaign, I've put forward a series of proposals that will foster economic growth from the bottom up, and not just from the top down. That's why the last time I spoke on the economy here in New York, I talked about the need to put the policies of George W. Bush behind us - policies that have essentially said to the American people: "you are on your own"; because we need to pursue policies that once again recognize that we are in this together.

This starts with providing a stimulus that will reach the most vulnerable Americans, including immediate relief to areas hardest hit by the housing crisis, and a significant extension of unemployment insurance for those who are out of work. If we can extend a hand to banks on Wall Street, we can extend a hand to Americans who are struggling.

Beyond these short term measures, as President I will be committed to putting the American Dream on a firmer footing. To reward work and make retirement secure, we'll provide an income tax cut of up to $1000 for a working family, and eliminate income taxes altogether for any retiree making less than $50,000 per year. To make health care affordable for all Americans, we'll cut costs and provide coverage to all who need it. To put more Americans to work, we'll create millions of new Green Jobs and invest in rebuilding our nation's infrastructure. To extend opportunity, we'll invest in our schools and our teachers, and make college affordable for every American. And to ensure that America stays on the cutting edge, we'll expand broadband access, expand funding for basic scientific research, and pass comprehensive immigration reform so that we continue to attract the best and the brightest to our shores.


Maybe there is an answer in the notion of growing income from the bottom up and in reducing the power of the corporate monoliths whose indiscretions are being paid for by us, the taxpayers.

Whatever the answer, the Obama camp has yet to discover a robust formula to combat the McCain Big Lie.