McCain and Palin's and the radical right's cry of socialism is just that --a cry. Desperation.
Factcheck.org: The McCain campaign has taken to denigrating some of Obama's tax proposals as "welfare" rather than tax cuts. And it continues to mislead about who would see a tax increase.
A new McCain-Palin Web ad characterizes Obama's proposed refundable tax credits as "welfare." But McCain himself proposes refundable tax credits, too, as part of his health care plan, and calls them "reform."
The ad also says "hard-working families" and "seniors" would pay higher taxes. But – need we say this again? – that would be true only for the affluent few, not for the many.
Analysis
The "welfare" argument appears, among other places, in the McCain-Palin campaign Web ad released Oct. 16.
The ad says, "Leading papers call Obama's taxes 'welfare' ... 'government handouts'." It says he would "raise taxes on seniors" and "hard-working families" and "give 'welfare' to those who pay none." It concludes, "Obama's not truthful on taxes."
This ad, however, is short of truthful itself.
As we've said any number of times, what Obama proposes would not raise taxes on any "hard-working families" unless they make more than $250,000 a year, a very small fraction of families. Independent analysis has shown than 95 percent of families with children would see federal income taxes go down.
As for "seniors," most of them would not see any increase in their federal income taxes either. In fact, Obama proposes to reduce federal income taxes to zero for persons 65 and over who make less than $50,000 a year. No other seniors would see an increase in what they pay to the IRS unless their income is $250,000 for a couple, or $200,000 for a single filer. It's true, as the McCain campaign likes to point out, that seniors who make less would be adversely affected by Obama's proposal to close down billions of dollars in tax preferences for corporations, which independent analysts calculate would flow through to owners of stocks and bonds in the form of lower dividend payments and reduced profits from capital gains. But while experts at the Congressional Budget Office and the Urban-Brookings Tax Policy Center tally this reduced income as "tax increases" for purposes of analyzing how proposed tax policies would affect different groups, it would not show up as an increased tax bill for any individual taxpayer, whatever their age.
"Welfare" or "Reform"?
The "welfare" claim rests on the argument, made in an Oct. 13 editorial in the Wall Street Journal, about refundable tax credits. Obama proposes to grant a number of refundable tax credits to low- and middle-income workers. For example, he would give a $500 tax credit ($1,000 for a couple) for workers, which would phase out for single workers making $75,000 or for couples making $150,000 per year. As the Journal editorial says: "You can receive these checks even if you have no income-tax liability." That's true enough. Whether or not that makes them "welfare" is a matter of interpretation, however. As the Journal editorial also says in its headline, "It depends on what the meaning of 'tax cut' is."
Fair enough. But McCain himself is proposing refundable tax credits of up to $2,500 a year for individuals, or $5,000 for families, as part of his health care plan. McCain doesn't call his credits a "tax cut" but he doesn't call them "welfare" either. He does call it tax "reform," right there on his own Web site:
McCain Web site: John McCain Will Reform The Tax Code . . . [E]very family will receive a direct refundable tax credit - effectively cash - of $2,500 for individuals and $5,000 for families to offset the cost of insurance. Read more
See a side by side comparison of Obama and McCain's tax plans.
