Whose 'economic disaster' exactly?
Posted: Friday, August 15, 2008 12:49 PM by Domenico Montanaro
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From NBC's Domenico Montanaro
Another day, another McCain ad hitting Obama on taxes. And to the McCain campaign's credit, as we noted earlier, it has been much more likely that it releases its negative ads to the press than the Obama campaign.
This ad, “Taxman,” is another example of that, and it paints -- yet again -- a bleak picture of Obama’s tax plan and what his plan would mean for families.
“Obama’s new taxes could break your family budget,” an announcer says as a mother hugs her child. And, even worse, Obama's plan would mean “economic disaster.”
Foreboding, certainly, but for whom is the question.
As First Read has noted previously, Obama's tax plan proposes larger tax cuts for those making between about $19,000 and less than $112,000 than McCain's plan does, according to the Tax Policy Center’s analysis.
The wealthiest in the country would benefit most from McCain’s tax cuts and would be hurt most by Obama's plan.
Families/individuals making more than six figures certainly may be concerned about their family budgets, but those who are at the breaking point -- those on the brink of “economic disaster” -- are not those making six- or seven-figure salaries.
In that upper echelon, those making an average of $2.9 million -- the top 0.1% -- would get a whopping tax break of $269,000 from McCain. Under Obama’s plan, the millionaires would take a serious hit, their pockets lightened by $702,000 on average. For those making $2.9 million-plus a year, perhaps that would constitute an “economic disaster,” but then the image in the ad should probably be of an anguished CEO clutching his Mercedes key chain not a middle-class mother clutching her child.
Also, Republicans have been critical of Obama crediting a liberal group in his ads -- and he does credit the Center for American progress more than once -- yet the citations in this McCain ad warrant similar scrutiny.
"The press warns the 'tax man cometh,'" the ad states. That comes from the conservative Wall Street Journal editorial page.
McCain's ad also includes this loaded line: "Obama's taxes mean 'higher prices at the pump.'" At the end of this line is a credit to the "Washington Post." But the full context from this Washington Post editorial is not as simple a connection as the McCain ad claims -- and doesn't have anything to do with Obama's tax plan for individuals or families. It has to do with Obama’s proposed “windfall profits tax” on oil companies:
"Making Exxon surrender money that is now falling into its lap would not necessarily affect its longer-term plans or incentives. Indeed, some of Big Oil's ‘windfall’ already will go to the government: The more profit the companies earn, the more corporate income tax they pay. But to add a five-year tax increase on top of that to pay for a one-year gift to voters would, indeed, increase the cost of doing business. That cost would be passed along in forgone investment in new production, lower dividends for pension funds and other shareholders, and higher prices at the pump -- thus socking it to the consumers whom the plan is supposed to help. If oil prices fall, there might be no windfall profits to tax. Then the Obama rebate would have to be paid for through spending cuts, taxes on something else or borrowing."
Then this line: “Obama's taxes a ‘recipe for economic disaster’” also comes from the conservative Las Vegas Review-Journal editorial page. The context, again, makes clear the paper’s ideological bent:
“Meanwhile, he [Obama] wants to the raise tax rate on the top income bracket from 35 percent to 39.6 percent, nearly double the tax rate on capital gains and dividends, and eliminate all tax breaks for the gas and oil industries and private equity firm managers. Talk about a recipe for economic disaster. Taking tens of billions of dollars that would otherwise be invested and dumping them into the black hole of the federal treasury risks stunting job growth -- and the prosperity of the very people Sen. Obama wants to help.
“All these ideas are born from the Democratic Party line that "working families" pay too much in taxes and "the rich" (who don't actually "work") aren't paying nearly enough. But the numbers don't bear that out. According to the Congressional Budget Office, 40 percent of American households already pay no income tax. The top 40 percent -- filers who make at least $44,000 -- pay 99 percent of all income taxes. And the wealthiest 10 percent -- households earning at least $90,000 per year -- carry 71 percent of the country's tax burden.”
Script for Taxman:
ANNCR: Celebrity? Yes. Ready to lead? No.
Obama's new taxes could break your family budget.
The press warns the "taxman cometh".
Obama's taxes mean "higher prices at the pump".
Obama's taxes a "recipe for economic disaster".
Higher taxes. Higher gas prices. Economic disaster.
That's the real Obama.
JOHN MCCAIN: I'm John McCain and I approved this message.
