Spread the Tax Hooey!
October 26, 2008
New GOP ads recycle old, debunked claims about Obama's tax plan.
Summary
Republicans are misrepresenting Obama's tax proposals right down to the bitter end. New radio ads from the McCain campaign and a TV spot from the pro-Republican group Let Freedom Ring are targeting voters nationwide with some of the same tax deceptions we've been hearing all fall, rolled in a bundle and flung through the airwaves. One of the radio ads features Hank Williams Jr., the other Florida Gov. Charlie Crist. But new packaging doesn't make the charges any less false.
  • Taxes wouldn't have gone up on "families" making as little as $42,000 under the budget resolution passed last spring, as the Charlie Crist ad says. Try $90,000 for a typical family of four. And anyway, that measure doesn't at all resemble what Obama's actually proposing to do.

  • The Let Freedom Ring ad claimed that Obama has "voted to allow the Bush tax cuts to expire," meaning "our income taxes will actually go up." But Obama only voted to let some of the tax cuts expire, and at any rate nobody's taxes are going up as a result of that vote. The group yanked this ad off the air rather than try to defend it.

  • Echoing a recent McCain theme, Crist says, "McCain knows that people don't want to 'spread the wealth,' " condemning Obama's use of the phrase when he talked to "Joe the Plumber." Actually, McCain has supported taxing high earners more than low earners. Not so long ago McCain said, "Wealthy people can afford [to pay] more." Obama's tax plan would "spread the wealth" more than McCain's, but it's not as though McCain wants to do away with the progressive tax system we currently have.
Analysis
The McCain-Palin campaign and Republican National Committee are running the Charlie Crist radio ad in Florida, while the Hank Williams Jr. version is running in Virginia, Colorado, Missouri, Nevada, Pennsylvania, Ohio and several other states, according to Politico. Let Freedom Ring was airing its TV ad in battleground states as part of a million-dollar ad buy, but pulled the spot from the airwaves because the group felt it couldn't stand behind the ad's assertions. Nevertheless, the ad was still prominently displayed on the group's Web site, neverfindout.org, as of Oct. 25.


McCain-Palin 2008/RNC Radio Ad: Hank Williams Jr.
Hank Williams Jr.: Hello, this is Hank Williams Jr. When Barack Obama said folks like you and me were bitter, and clinging to guns and religion, I knew he just doesn’t understand small-town America. We love our God, and we love our guns, especially handed down from our grandfather. We resent it when liberals like Obama question our way of life. Don’t be bitter. Vote McCain.

Announcer: Congressional liberals want to increase spending by nearly a trillion dollars. And raise taxes on folks making $42,000 a year to pay for it. Congressional liberals call it “taxing the rich.” We call it “out of touch.” No wonder they criticize our values, but expect us to accept theirs. Congressional liberals: Out of touch with our America.
Paid for by McCain-Palin 2008 and the Republican National Committee.
I’m John McCain and I approve this message.
 
"Folks"-y Deception

The radio ads present us with a slight variation on an old theme, telling us that to pay for new programs, "congressional liberals" want to raise taxes on "folks" making $42,000 a year, in the case of the Williams ad, and "American families" making that amount, in the case of the Crist ad.

The claims refer to the budget resolution that Obama and others voted for earlier this year, which we've written about over and over. First off, a budget resolution is a kind of rough budgetary blueprint that Congress passes each year. Its specific provisions can't take effect without further legislation, and lawmakers have taken no action to implement this one, which in theory would have allowed Bush's tax cuts to expire for people in the 25 percent tax bracket, allowing their tax rate to revert to 28 percent.


Even if it had been enacted, though, there would have been no tax hike for "families" (as one ad says) making $42,000 a year. (The other ad says "folks," a somewhat less precise phraseology). No, nyet, non, nein. We have nightmares about our very own version of the film "Groundhog Day," in which we wake to Sonny and Cher's "I Got You, Babe," then stagger to our laptop and type these sentences: While it's true that a single taxpayer making $42,000 a year would have seen his or her taxes go up by about $15 if this provision had been followed up and enacted, a family of four would have had to hit an income level of $90,000 before experiencing a tax hike. For couples, the figure would have been $83,000.

And, once again, Obama himself proposes tax cuts for 95 percent of families with children. Only families with more than $250,000 annual income would see an increase.

We could say that we didn't think the McCain campaign had heard a word we've said over these long months, but we know it has: It cites our work in its back-up for the Crist ad. The article it quotes from though – "The $32,000 Question" – doesn't support what the radio ad says. What we said is this: "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."

Maybe the campaign is only half-listening.

 
Let Freedom Ring Ad: "Income Taxes"
thumb.one

Man: Senator Obama, you have promised that you will cut taxes for 90% of America. But you’ve also voted to allow the Bush tax cuts to expire. So that means our income taxes will actually go up. Did you think this was going to get past us? So let’s make this real simple: if you allow the Bush tax cuts to expire, how many taxpayers would pay more taxes?

[Graphic: "100% of America"]

This is not good change.

Announcer: What happens when we elect a President who raises our taxes? Please, America, let’s never find out.
100% Wrong

The Let Freedom Ring TV ad is even worse. It claimed that "100% of America" would see taxes go up because Obama "voted to allow the Bush tax cuts to expire." This is so far from reality that we had to ask Let Freedom Ring what vote it could possibly be referring to. And a spokesman said it was Obama's vote on the same budget resolution just mentioned. But as we noted above, the resolution only would have let some of those tax cuts expire. It would have preserved provisions that benefit families – "marriage penalty" relief, child tax credits, a 10 percent tax bracket for the lowest-earning taxpayers. It did not call for letting the cuts expire for "100 percent of America." So the claim in this ad is 100 percent wrong. And Let Freedom Ring appears to know that. "We weren't comfortable" with the ad's assertion, the spokesman told us, and the group has taken it off the air. It still appears on the Web site for the group's ad campaign, however.

Looking forward, Obama's actual tax plan would indeed allow Bush tax cuts to expire, but only for the top two income tax brackets. Those would revert to pre-Bush levels, and the brackets would be adjusted if necessary to ensure that they include only individuals making more than $200,000 per year, or couples making more than $250,000. (Two percent of the population will make more than $250,000 next year).

Obama proposes a number of tax cuts for lower- and moderate-income people. According to the nonpartisan Tax Policy Center, by 2012 middle-income people (those in the middle one-fifth of all households) would get to keep an extra $2,200 per year in after-tax income on average under Obama than they do now. Under McCain, that figure would be $1,400. The top 1 percent of earners, on the other hand, would have to pay an average of $19,000 more in taxes under Obama, while under McCain they'd see their taxes cut by an average of $125,000.
McCain-Palin 2008/RNC Radio Ad: "Spread the Wealth"

Gov. Charlie Crist: Hi, this is Governor Charlie Crist. Let me tell you why I support my friend John McCain. He will lower your taxes. He will stop wasteful government spending. And John McCain knows that people don't want to "spread the wealth." He knows that Congress should let you keep more of your money, and not take it away. Thank you very much.

Announcer: Your savings, your job and your financial security are under siege. Congressional liberals will make it worse. Congressional liberals plan nearly a trillion dollars in new government spending. To pay for it, Congressional liberals promise higher taxes on American families making over $42,000 a year. Barack Obama and Congressional liberals call it spreading the wealth around, we call it higher taxes, bigger government. Either way, it will cost you. Stop 'em before they make it worse.

Paid for by McCain-Palin 2008 and the Republican National Committee.

John McCain: I'm John McCain and I approve this message.
Plumbing the Meaning

The Crist ad refers to the phrase "spread the wealth," which was used by Obama in his now-familiar conversation with Joe Wurzelbacher in Toledo.

What Obama was saying is that giving tax breaks that have disproportionately benefited upper-income taxpayers leaves those further down the scale "pinched," with the result that "business is bad for everybody." 

Obama, Oct. 12: [W]e've cut taxes a lot for folks like me who make a lot more than $250,000. We haven't given a break to folks who make less. It's not that I want to punish your success, I just want to make sure that everybody who is behind you, that they've got a chance at success, too. And everybody is so pinched that business is bad for everybody. And I think when you spread the wealth around, it's good for everybody.

Obama was wrong about one thing; the Bush tax cuts did in fact give tax breaks "to folks who make less," including the previously mentioned 10 percent tax bracket, "marriage penalty" relief and an increase in the per-child tax credit, all of which Obama proposes to keep. What his plan would do is provide even more tax benefits at the middle and low end of the scale, while increasing taxes at the top.

This way of "spread[ing] the wealth around" is hardly a new concept. The United States already has a progressive tax system by which high earners are taxed at higher rates than those who make less. Obama would make it somewhat more progressive. (The Williams ad uses the term "taxing the rich.")

McCain himself hasn't always seemed so opposed to progressive taxation. Here's what he said in a 2000 meeting with college students sponsored by the MSNBC program "Hardball," when questioned about the issue:

McCain, Oct. 12, 2000: [W]e feel, obviously, that wealthy people can afford more.
....
And I think middle-income Americans, working Americans ... all of the taxes that working Americans pay, I think they – you would think that they also deserve significant relief, in my view.
...
[H]ere's what I really believe, that when you are – reach a certain level of comfort, there's nothing wrong with paying somewhat more.

In fact, the system would remain progressive under McCain's tax plan. His argument with Obama isn't about whether to "spread the wealth," but by how much.

Also, as we now know, Joe the Plumber would almost certainly be entitled to a tax cut if Obama's plan were implemented – and a larger one than he'd get under McCain's.

Say It Ain't So!

The Hank Williams ad says that "congressional liberals want to increase spending by nearly a trillion dollars." (The other ad uses almost identical wording.) In this case, "congressional liberals" seem to be standing in for Obama, judging from the back-up material sent to us by the McCain team. And this is an old claim, based on the McCain campaign's estimate that the cost of Obama's various proposals would be $860 billion (the ad rounds the figure up rather, um, liberally).

It's certainly true that Obama proposes large new spending programs, while McCain proposes large but unspecified spending cuts. But the trillion-dollar estimate (which would be spread over four years) doesn't factor in any of Obama's proposed savings or cuts. For example, he proposes to eliminate $15 billion per year in subsidies given to health insurance companies for Medicare Advantage programs, which are insurance plans offered by private companies as an alternative to traditional government-sponsored Medicare.

Outside analysts like the nonpartisan Committee for a Responsible Federal Budget have found that neither Obama nor McCain would come close to balancing the federal budget without additional spending cuts or tax increases that they have yet to specify.

–by Viveca Novak and Jess Henig
Sources
Dann, Carrie. "McCain's tax evolution," FirstRead, MSNBC, 21 Oct. 2008.

Martin, Jonathan. "Hank Jr. takes to radio to hammer Obama on 'bitter'," Politico, 23 Oct. 2008.
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