Half of Americans Believe GOP Spin on Obama's Tax Plan

By Joshua Holland, AlterNet. Posted August 26, 2008.

You've really got to tip your hat to the anti-tax propagandists on the Right. According to Gallup, 53 percent of Americans believe an Obama presidency would result in their taxes going up, despite the reality that he has offered tax "relief" for 95 percent of taxpayers and would only raise taxes on the top 5 percent to the levels they paid during the Clinton years.

Interestingly, about a third of respondents to the Gallup poll said John McCain would also raise their taxes. A quarter said as much of George W. Bush in 2004 -- clearly, there's a sizable group of Americans who believe that it's just what politicians do.

From Gallup:

Given the current economic environment, one might think that the last thing the presidential contenders would be thinking about -- let alone verbalizing -- would be their intention to raise federal income taxes. In fact, McCain has pledged to renew the tax cuts Bush instituted, and Barack Obama has said he would raise taxes on the wealthiest but would provide a tax cut to middle-class Americans. Therefore, it may be somewhat surprising that so many Americans think their federal taxes will go up, regardless of whether Obama or McCain is elected. ...

Republicans are overwhelmingly convinced that Obama will increase their taxes, with 81% stating such an expectation, compared to 52% of independents and 34% of Democrats. In sharp contrast, only 16% of Republicans think their taxes will increase if McCain is elected president, compared to 34% of independents and 46% of Democrats. While party affiliation clearly plays a role in the way Democrats and Republicans view potential tax increases, a substantial percentage of independents think their federal taxes will increase no matter who wins.

You can boil down conservative messaging to the economy to this: We're all the same. Rich and poor, high-skilled workers and those without, wage-slaves and Paris Hilton -- and either politicians "raise taxes" or provide "tax relief." The reality is that the federal government is always going to rake in somewhere around 18 to 20 percent of the GDP in revenues, and the questions people should be asking are: 1) is the level of revenue sufficient so that government can do what we ask and expect it to do, or are we going to run up huge deficits, and 2) how is that burden distributed?

And we're not talking just about individuals. During the boom years after World War II, corporate income taxes represented around 6 percent of the government's revenues; today that number has fallen to less than 2 percent.

But back to individual taxpayers. According to an analysis of both candidates' tax proposals by the Tax Policy Center and the Urban Institute (PDF), the reality is that under McCain's plan, the middle class would pay a few dollars less, the top 5 percent would pay a whole lot less, and the deficit would continue to snowball. Under Obama's plan, the top 2.5 percent of filers would see their tax rates return to what they were under Clinton -- a real increase -- and the bottom 95 percent of filers would pay a lot less.

Specifically:

Taxpayers' Income	McCain Plan	Obama Plan
$227,000 or more (5% of population):	Pay $15,000 less	$23,000 more
$112,000-227,000 (15% of population):	Pay $3,200 less	$2,300 less
$66,000-112,000 (20% of population):	Pay $1,009 less	$1,290 less
$38,000-66,000 (20% of population):	Pay $319	$1,042 less
$19,000-38,000 (20% of population):	Pay $113 less	$892 less
$0-19,000 (20% of population):	Pay $19 less	$567 less
Budget impact	Costs $600 billion	Returns $700 billion

These are estimates only, but certainly adequate to make the point that average families would see bigger cuts under an Obama administration -- and those at the top would clean up, while the deficit continues its steady upward trend, under McCain.

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Joshua Holland is an AlterNet staff writer.

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