McCain Claims about Obama Tax Policy: just plain wrong

Citizens for Tax Justice has a new release on the McCain campaigns continuing assertions that Obama's tax proposals will lead to tax increases for most American families. 

Obama has said that he would not make the Bush cuts permanent for those earning more than $250,000 (a figure considerably too high, in my book).  But the McCain campaign has asserted that Obama will increase taxes for ordinary Americans (simply unfounded), while of course saying that they intend to make all of the "temporary" Bush cuts permanent AND continue increasing spending on the military AND keep up the costly war spending in the Iraq occupation (which is costing us somewhere upwards of $3 trillion already, all costs considered).

Here's what CTJ has to say about the McCain campaigns misrepresentation of Obama's tax proposals.

"For someone who wants to make the Bush tax cuts permanent for all but the richest 2 or 3 percent of Americans, and add on top of that a lot of new tax cuts for middle-class Americans, it's surprising how often Senator Barack Obama is accused of proposing "painful tax increases" on American "families." ... Nonetheless, the McCain campaign has tried to paint Obama as a major tax-hiker. ... The most damning aspect of these statements is that the chief economic adviser to Senator McCain has acknowledged that the Obama tax plan does not raise taxes. TIME's Michael Sherer wrote, back in July:

 "Here is Douglas Holtz-Eakin, McCain's chief economic policy adviser. 'I used to say that Barack Obama raises taxes and John McCain cuts them, and I was convinced,' he told me in a phone interview this week. 'I stand corrected [about Obama's plans].'" " (emphasis added) See "McCain Campaign Continues to Mislead About Obama's Tax Proposal--and McCain's Chief Economics Adviser Admits Their Commercials are Wrong", CTJ, Sept. 5, 2008.

 

Meantime, the BNA Daily Tax Report today reported that McCain's reversal on making the 2001-2003 tax cuts permanent represents a significant change in policy.  McCain's Plan to make 2001, 2003 Cuts Permanent Reflects Change of Heart, BNA Daily Tax Report, Sept. 5, 2008.  Four years ago, BNA reports, one of his principal economic advisers scoffed at the idea that making the tax cuts permanent would "pay for itself" with more vigorous economic growth.  (This pay-for-itself idea, of course, is the have-your-cake-and-eat-it-too solution made possible by the speculative and inaccurate and generally  much-derided "Laffer curve" idea that reducing taxes generates growth which brings in more tax revenue in spite of the tax cuts.)  The Tax Policy Center has concluded that McCain's tax policies (of more breaks for the wealthiest Americans and large corporations) will reduce tax revenues by $4.2 trillion over ten years.

Although back when the tax cuts were originally passed, McCain said that he opposed making such deep tax cuts for the wealthy rather than providing more relief for ordinary Americans, he has now done a complete flip-flop to cater to the Republican base and argue for continuing, and expanding, Bush's economic policies.  BNA notes: "[W]hile Obama's campaign has focused on raising the top income tax rates gradually and creating new tax cuts for low-income and middle-class households, McCain has instead drafted a package that would lock in the tax cuts for high-income households and provide deeper capital gains tax cuts and lower taxes for corporations."  Id.