Obama’s McCain-Bush Ad More of the Same: Falsehoods and Misleading

October 23, 2008

Sen. Barack Obama has an ad running that tries to paint John McCain as a clone of George Bush. On the issue of taxes, the ad says this:

"Tax breaks for big corporations and the wealthy. But almost nothing for the middle class — same as Bush."

First, the claim that tax breaks for big corporations don't flow to the middle class is factually incorrect. All taxes are paid by people and all tax cuts flow to people, including those legally remitted by businesses (such as corporations). How much is paid by the "middle class" depends on questions of economic incidence of the corporate income tax, but it's not nothing.

Now regarding the claim that McCain's tax cuts and Bush's tax cuts provide no relief to the middle class, that is just downright false.

First, if you count McCain's health care tax credit, he provides substantial relief to middle-income tax units over the next ten years, possibly more than Obama. Second, even ignoring the health care tax credit, the baseline Obama is using to make that claim is current policy with an AMT patch. Yet when Obama talks about his own tax plan, he compares it to a different baseline (current policy without an AMT patch). How much this affects the "middle class" depends upon your definition of middle class.

Finally, the claim that Bush provided nothing to the middle class is incorrect. In 2007, according to a Tax Policy Center run, the average middle income tax unit saved $754 from the combined effects of EGTRRA, JGTRRA, WFTRA, and an AMT patch relative to a pre-EGTRRA with AMT patch baseline. Both Obama and McCain favor extending the Bush tax cuts for this middle income group, something McCain has falsely hinted that Obama does not support.

Once again, I'll say it: When the candidates talk tax policy either on the stump or in advertisements, don't believe what they say because there is a high probability they are just making it up.

For a factchecking of Sen. McCain's latest Joe the Plumber ad, click here.

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