2008-10-03 16:55:44 UTC
to educating people about finance and the economy.
"Gov. Palin started off early in the debate trying to label Sens. Obama and
Biden as tax hikers. She said:
"Now, Barack Obama and Sen. Biden also voted for the largest tax increases
in U.S. history. Barack had 94 opportunities to side on the people's side
and reduce taxes and 94 times he voted to increase taxes or not support a
tax reduction, 94 times."
This is not true. Even if one considers the expiration of the so-called Bush
tax cuts to be a tax increase (it is technically not a tax increase), it
would not be the biggest tax increase in history under almost any measure
that adjusts for the size of the economy. And Sen. Obama's presidential tax
plan does "raise taxes" relative to a current policy baseline over ten
years, but it's not even close to being the largest tax increase in U.S.
history. Relative to a current law baseline, Sen. Obama is actually cutting
taxes rather significantly in the aggregate (nearly $3 trillion).
Sticking with the "Obama will raise your taxes" theme, Palin also repeated
the "$42,000" line that Sen. McCain has repeated over and over and over:
"But we do need tax relief and Barack Obama even supported increasing taxes
as late as last year for those families making only $42,000 a year. That's a
lot of middle income average American families to increase taxes on them. I
think that is the way to kill jobs and to continue to harm our economy."
As I wrote when Sen. McCain said this in the first debate: That was a
non-binding Senate vote earlier this year, and it's different from what
Obama is proposing as a candidate. Very few households making $42,000 per
year would pay more in taxes under Obama's tax plan. Some may say that Obama
is voting one way and proposing something else on the campaign trail. If
that's fair, then McCain's drastic change of heart on the Bush tax cuts is
fair game as well. McCain voted against the 2001 and 2003 tax cuts, but now
supports extending almost all of them with the exception of the full repeal
of the estate tax.
Next, Gov. Palin had this to say about Sen. Obama's proposed tax hike and
how it would impact small business:
"But when you talk about Barack's plan to tax increase affecting only those
making $250,000 a year or more, you're forgetting millions of small
businesses that are going to fit into that category. So they're going to be
the ones paying higher taxes thus resulting in fewer jobs being created and
The accuracy of her "millions of small businesses" claim depends upon your
definition of "small business." Hers is a rather liberal one, and even under
her definition, the true number definitely is not beyond 5 million because
there aren't even 5 million tax returns that make more than $250,000. Again,
the Tax Foundation will be releasing information next week on the reality of
how small business tax returns would be affected by the two tax plans. The
goal is to separate fact from fiction on the issue.
Gov. Palin's most egregious error of the night was actually repeated twice
in 20 seconds. It was on the issue of Sen. McCain's health care plan, which
neither side appears to understand.
"I am because he's got a good health care plan that is detailed. And I want
to give you a couple details on that. He's proposing a $5,000 tax credit for
families so that they can get out there and they can purchase their own
health care coverage. That's a smart thing to do. That's budget neutral.
That doesn't cost the government anything as opposed to Barack Obama's plan
to mandate health care coverage and have universal government run program
and unless you're pleased with the way the federal government has been
running anything lately, I don't think that it's going to be real pleasing
for Americans to consider health care being taken over by the feds. But a
$5,000 health care credit through our income tax that's budget neutral.
That's going to help. And he also wants to erase those artificial lines
between states so that through competition, we can cross state lines and if
there's a better plan offered somewhere else, we would be able to purchase
that. So affordability and accessibility will be the keys there with that
$5,000 tax credit also being offered."
Sen. McCain's health care tax plan is not budget neutral. It is a $1.3
trillion tax cut over the next ten years, which is therefore the amount that
would be added to the national debt under this proposal. It does cost the
government something over the next ten years, and it's almost as expensive
as Sen. Obama's health care tax plan, according to Tax Policy Center
preliminary estimates ($1.6 trillion). To be budget neutral, Sen. McCain
would essentially have to eliminate the exclusion from payroll taxes for
employer-provided health insurance as well as the income tax exclusion. He
does not do that. Notice that Gov. Palin, like Sen. McCain did in the first
debate, doesn't give you the whole story on this plan, avoiding the
inconvenient fact that he would tax employer-provided health insurance."