McCain’s Taxing Tax Attacks

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The latest version of the new-and-improved candidate McCain sticks to a message. And this week, the message is the economy, with a big subset devoted to taxes, specifically the idea that Republicans cut taxes and Democrats raise taxes, making Republicans better for a nation in distress. The problem is that McCain’s rhetoric on taxes often skirts the truth of the tax debate.

Begin with the central thesis of the McCain tax argument. “[Obama] wants to raise taxes, which makes the economy worse. I want low taxes,” McCain said last month, at a town hall event on Wall Street. In fact, both the McCain and the Obama tax plans will have the effect of reducing total revenue to the federal government, meaning lower aggregate taxes. But don’t take my word for it. “Their specific non-health tax proposals would reduce tax revenues by $3.6 trillion (McCain) and $2.7 trillion (Obama) over the next 10 years, or approximately 10 and 7 percent of the revenues scheduled for collection under current law, respectively,” says the non-partisan Tax Policy Center.

The big difference between the candidate’s two plans is that the benefits go to different groups of people. “Senator McCain’s tax cuts would primarily benefit those with very high incomes,” the report continues. “Senator Obama offers much larger tax breaks to low- and middle-income taxpayers and would increase taxes on high-income taxpayers.”

As my colleague, Jay Newton-Small noted on Monday, some specifics of the McCain tax argument are also misleading. Carly Fiorina, a McCain economics adviser, argued that if Obama fails to renew the Bush tax cuts, then 23 million small businesses will see their taxes increase. But she failed to note that only a small fraction of that group of businesses, probably around 5 percent, have incomes large enough to be effected by raising the income tax rate for the top bracket.

Which brings me to the biggest problem with the recent McCain tax message–the $32,000 canard. In Virginia right now, McCain is running a radio ad that includes this script: “Barack Obama promises to cut taxes, but he voted to raise taxes on folks earning as little as $32,000.”

McCain has used this same claim on the campaign trail as well, as have his surrogates in a conference call. The problem is it’s not really true. Or to put it another way, it is almost-kind-of true, but only in the meaningless technical way that campaigns often use to distort the meaning of votes in the Senate. (Obama has been doing this to McCain as well, but I will save that for another post.) So what are the facts? “The McCain campaign claims that Obama voted to raise income taxes on individuals who earn as little as $32,000 per year. That’s wrong,” says the non-partisan More:

The resolution Obama voted for would not have increased taxes on any single taxpayer making less than $41,500 per year in total income, or any couple making less than $83,000. The $32,000 figure is approximately the taxable income of a single person making $41,500 per year, after all deductions and exclusions. Obama’s vote (for a non-binding budget bill) does not change the fact that his own tax plan would provide a tax cut of $502 for a non-married taxpayer earning $35,000.

In the last two presidential election cycles, the Republican tax message was used effectively to wound the Democratic candidate. Voters tend to like the idea of lower taxes, and not like tax increases. So it makes sense that McCain is returning to the old playbook. But that doesn’t mean he can just make up his own facts.