CNN

The Statement:
At a campaign stop Sunday, October 19, in Westerville, Ohio, Sen. John McCain cited Sen. Barack Obama's promise to "cut income taxes for 95 percent of Americans. You might ask, 'How do you cut income taxes for 95 percent of Americans when more than 40 percent pay no federal income taxes right now?' ... The government will write them all checks called a 'tax credit,' and the Treasury will have to cover those checks by taxing other people."

Get the facts!

The Facts

Obama, on his Web site, promises to "cut taxes for 95 percent of working families." He and his campaign officials have, at times, inaccurately described his plan as a tax cut for "95 percent of Americans." His economic policy adviser Jason Furman told CNN that the figure applies to working people and leaves out retirees.

Obama is offering a new "Making Work Pay" tax credit of up to $500. Furman says the credit will go to 95 percent of American workers. It is designed to offset payroll taxes, which are different from federal income taxes. Payroll taxes include the fees the government takes out of paychecks to supply funding to Social Security and Medicare. Approximately 40 percent of Americans do not pay federal income taxes, according to the nonpartisan Tax Policy Center. But many of those people do pay payroll taxes. Those who pay federal income taxes would have the tax credit come out of what they owe the government; those who don't pay federal income taxes would receive a check in the mail.

Obama, on his Web site, describes the tax credit as a means to "cut income taxes ... for working families to offset the payroll tax they pay." So, when McCain refers to Obama as promising to "cut income taxes" through those tax credits, he is on firm ground.

Furman told CNN that funding for the tax credit would come in part from the tax increases Obama is calling on couples making at least $250,000 and individuals making at least $200,000. So, when McCain says the tax credits given to people who don't pay income taxes would be funded by "taxing other people," that is accurate.

McCain has tax credits at the center of one of his economic proposals as well. His health care plan calls for taxing the amount that Americans spend on employer-provided health insurance, while offering a $5,000 tax credit for families, and $2,500 for individuals. McCain has said he will fund those credits in part through the tax collected on for employer-provided health insurance. His campaign has said it would also cover some of the costs through cost-cutting in the Medicare program.

McCain has not called for raising taxes on some people in order to pay for his health care tax credits for others. According to the Tax Policy Center, McCain is offering across-the-board tax cuts - though, for lower- and middle-income Americans, his tax cuts would be smaller than Obama's. Also according to the center, McCain's health care plan would be a net tax cut for virtually all Americans through 2013, and for the middle class through 2018, which is as far as the center projected.

But the Tax Policy Center estimates that McCain's health care plan would effectively increase taxes for a sliver of Americans - the wealthiest 1 percent - by 2013, and for more Americans by 2018. If that estimate is accurate, McCain would effectively be raising taxes on some in order to carry out a program that includes tax credits.

The Verdict:
True. Obama is promising tax credits to 95 percent of American workers to offset payroll taxes. The credits would be funded in part by tax hikes on individuals making $200,000 or families making $250,000.