ABC: McCain Would Help 'Wealthiest,' Obama to Cut Taxes for '95%'
Obama, Wright proceeded to report, “would raise taxes on the wealthy, people who make more than $250,000 a year, but cut them for most households.” The text on screen, however, stated an impossibility: “Cut taxes on most households (95%).” That 95 percent is impossible since one-third of those who file with the IRS are “non-payers,” people who end up paying no tax or get money back which exceeds their payments. Obama plans to expand the Earned Income Tax Credit (EITC) and create other credits. For those for whom the credits surpass their tax obligation, those are not tax cuts, but spending hikes or federal giveaways akin to welfare.
A June report from the Tax Foundation listed 32.58 percent of IRS income tax returns for 2005 as “non-paying.”
In addition, Obama's plan calls for raising the 33 and 36 percent tax brackets. In 2008, those with an income as low as $100,150, not $250,000, paid at the 33 percent rate. See this Tax Foundation report from January.
Wright's September 16 story on how the two candidates approach the economy was the premiere of a new World News series: “What's the Difference”? Where Wright summarized their tax plans:
Perhaps the sharpest difference between the two is on the taxes people pay. McCain believes cutting taxes across the board would promote economic growth. He'd make permanent the Bush tax cuts for the wealthiest Americans, cut corporate taxes and double the personal exception for dependents.This is not the first time ABC has exaggerated how many would benefit from Obama's tax plan. My Sunday NewsBusters item, “Gibson Advanced to Palin What Hume Calls an Obama 'Dishonesty,'” recounted:
Obama would raise taxes on the wealthy, people who make more than $250,000 a year, but cut them for most households. He's give middle class families a thousand-dollar tax credit and cut tax taxes completely for seniors on fixed incomes.
Speaking of "dishonesty" in McCain's TV ads, on Fox News Sunday Brit Hume pointed out Barack "Obama goes around claiming he's going to cut the taxes of 95 percent of the public, which is literally impossible" since "40 percent of American taxpayers don't pay any income tax," but that hasn't stopped ABC (directly) and CBS (implicitly) in recent days from advancing that Obama claim as fact. Charles Gibson, in his third interview session with Sarah Palin excerpted on Friday's 20/20 and Nightline, stated that Obama will extend the "Bush tax cuts on everything but people who own or earn more than $250,000 a year -- cuts taxes on over 91 percent of the country."CNN forwarded the same faulty exaggeration Tuesday morning as Kiran Chetry insisted to John McCain: “Most of our independent economists say that Barack Obama is actually cutting taxes for about 90 percent of Americans.” (Matthew Balan's NB post.)
Excerpts from a Tax Foundation summary (PDF) of the McCain and Obama tax plans:
Continue the lower rates enacted in the 2001-03 tax cuts.Obama:
Increase the dependent exemption each year until it reaches $7,000 in 2016 (the 2016 level would be twice the level in 2009)
Phase out the AMT.
Maintain the 15% rate on capital gains and dividends.
Maintain the current 10, 15, 25, and 28 percent rates from the 2001-03 tax cuts, but allow the top two rates to expire (the 33 percent rate would rise to 36 percent; the 35 percent would rise to 39.6 percent). Eliminate all income taxation of seniors making less than $50,000 per year.
Create a new "Making Work Pay" refundable income tax credit of up to $500 per person or $1,000 per family. It would offset the payroll tax on the first $8,100 of earnings.
Create a 10 percent mortgage credit worth up to $800.
Give full-time workers making minimum wage an Earned Income Tax Credit benefit up to $555. If the workers are "responsibly supporting their children on child support," give
those workers a benefit of $1,110.
Extend AMT patch.
Raise capital gains and dividends rates to somewhere between 20% and 28%, keeping them equal.