Written by Matt Moon
October 16, 2008
Tax Foundation Fact-Checks Final Presidential Debate for Joe the Plumber
Candidates Make Many of the Same Misleading Statements They've Made in Previous Debates
Washington, DC- In the final Presidential debate between Senators John McCain and Barack Obama, dominated by economic policy, both candidates made many of the same misleading statements they've made in past debates and on the campaign trail.
With much of the discussion directed towards "Joe the Plumber," a voter Obama recently met with in Ohio who is concerned about his business, Gerald Prante provides Joe with the facts when it comes to both candidates' claims on taxes. Prante points out that while John McCain again voiced concern over the rising national debt and claimed that he could balance the budget in his first four years in office, his tax policies contain major tax cuts that will not pay for themselves.
"It is a pretty safe bet that Sen. McCain is not going to be balancing the budget by the end of his first term," Prante argues.
Prante also chides McCain for saying, "When Obama said he would unilaterally renegotiate the North American Free Trade Agreement, the Canadians said, ‘Yes, and we'll sell our oil to China.'"
"What McCain doesn't understand is that even if Canada shipped the oil to China, the effect on the U.S. would be relatively small. Other oil that is currently going to China would just flow to the United States," Prante explains. "Both candidates are ignoring the fact that there is a world market for oil."
Sen. Obama repeatedly showed an unfortunate ignorance of the fact that all taxes are paid by people. Prante gives Obama an "F" in public finance for saying that Exxon Mobil "can afford to pay a little more" because they made record profits over the last several quarters.
"What Sen. Obama doesn't understand or doesn't want to tell the American public is that when Exxon Mobil writes that check to Uncle Sam, some individual is paying for that," Prante says. "In the short run, that person could be a shareholder, a worker or a consumer."
Prante calls out Obama for continuing his misleading attack on McCain's proposal to provide a tax credit for purchasing health insurance - $2,500 for individuals and $5,000 for families. The Democratic nominee for President said, "The average policy costs about $12,000. So if you've got $5,000 and it's going to cost you $12,000, that's a loss for you."
"It seems like Obama doesn't know the difference between a tax exclusion and tax credit," Prante argues. "The $12,000 value of the employer-provided health insurance would no longer be excluded under the federal income tax, and the average family would pay $1,800 in taxes on that coverage. In employer-sponsored plans, for all but the highest-income workers with Cadillac health care coverage, the $5,000 credit would more than offset the additional taxes a person must pay."
Prante continues, "Eventually, since the credit is indexed for inflation and not health-care costs, the credit's value would diminish. But for the next ten years, McCain's health care tax plan is a $1.3 trillion tax cut for American taxpayers, according to Tax Policy Center estimates, and the average middle-income tax unit would be better off under McCain's health care tax plan than Obama's. McCain's plan makes the federal income tax more progressive."
Gerald Prante's fact-check piece can be found HERE.
The Tax Foundation is a nonpartisan, nonprofit organization that has monitored fiscal policy at the federal, state and local levels since 1937.
To schedule an interview to discuss the Presidential candidates' tax proposals, please contact Matt Moon, the Tax Foundation's Manager of Media Relations, at (202) 464-5102.