Reality Check: McCain Ad Attacks Obama On Tax Issues

The fallout on Wall Street has taken the economy front and center in the presidential campaign.

A new ad by Republican presidential candidate Sen. John McCain goes after Democratic presidential candidate Sen. Barack Obama on tax concerns.

“Obama and his liberal congressional allies want a massive government — billions in spending increases, wasteful pork,” said the ad.

A WISC-TV analysis found that this needs clarification.

Obama does want to make some significant spending increases, including an estimated $65 billion on health care and $150 billion over 10 years on green energy initiatives.

It’s true that Obama has requested earmarks of $330 million last year alone. Obama said he’d request no earmarks for 2009 and he’d return earmarking to 2001 levels.

“We would pay painful income taxes, skyrocketing taxes on life savings, electricity and home heating oil,” said the ad.

This is misleading. First of all, income taxes under Obama’s plan would go up only for families who make more than $250,000 and for individuals who make more than $200,000.

And taxes on “life savings,” meaning capital gains or dividend taxes, would also goup only for those upper tax brackets. For 80 percent of the country’s taxpayers, Obama would actually cut taxes, a WISC-TV analysis found.

“That is something I believe that is absolutely necessary to strengthen an economy that is going to be sliding, probably, into deeper recession,” said Obama.

Obama has never said he’d raise taxes on electricity. He said in one interview he’d prefer to tax “dirty energy” to fund education, but neither was his plan.

Obama supports a cap-and-trade system for greenhouse gas emissions, which some have called a tax on electricity. The thing is, McCain supports a similar plan, WISC-TV found.

On heating oil, Obama would send out rebate checks to help pay for energy costs.

But he’d tax the profits of oil companies to pay for the rebate, and some believe that tax on big oil would be passed on to consumers driving up prices.

The non-partisan Tax Policy Center has looked at the tax and spending plans of both candidates, and said unless major spending cuts or tax increases were made by either candidate, both of their plans will substantially increase the national debt and fail to significantly stimulate the economy.