September 26th, 2008
02:25 PM ET
14 years ago

Fact Check: Is McCain proposing the largest middle-class tax hike ever?

[cnn-photo-caption image= caption="Is Biden's claim about McCain's tax plan accurate?"]The statement: At a campaign stop Thursday, September 25, in Greensburg, Pennsylvania, Sen. Joe Biden said Sen. John McCain is "proposing the largest increase on middle-class taxpayers in American history." Pointing to McCain's plan to tax what people pay for employer-provided health plans, Biden said, "It will cost the middle class over the next four years over one trillion dollars in additional taxes."

Get the facts!

The facts: McCain's health-care plan does call for ending the tax-free status of employer-provided health plans. But it also offers a tax credit of $2,500 per individual and $5,000 per family. The McCain campaign says the plan could help give people more choices.

The nonpartisan Tax Policy Center, which the Obama campaign has cited at times to back up some of its assertions about taxes, has analyzed both McCain and Obama's health-care plans. The center says the McCain tax credits are "initially very generous compared with current law." So, as CNNMoney reported earlier this month, "initially it may be a break for many."

But the Tax Policy Center says that over time, the tax credits may not grow as quickly as health-care costs, so the advantage for some taxpayers may be eroded. Still, in charts analyzing how the McCain health plan may affect taxpayers, the center predicts the plan would be a net tax cut for all Americans through 2013, and a net tax cut for the middle class through 2018, though people at higher income levels would be paying more in taxes by then. (The analysis does not go beyond 2018.)

The McCain campaign has said McCain's health plan would cost about $3.6 trillion over 10 years, and be paid for by eliminating the tax breaks for employer-provided health plans. The Obama campaign argues that that roughly translates to a trillion dollars that workers would be paying in new taxes within four years. But those figures do not include what the McCain plan would hand back out through tax credits. And the trillion dollar figure that the Obama camp points to would apply to all Americans, not just the "middle class."

In information sent to CNN, the Obama campaign also argues that the plan the Tax Policy Center studied differs from the one McCain describes on the stump. The Obama campaign says that McCain contends his plan's costs would be covered, while the center says it would add $1.3 trillion to the deficit. Here's what the center says about long-term costs: "Under our assumptions, if the (health) plans took effect in 2009, the McCain plan would cost about $1.3 trillion over 10 years and the Obama plan would cost about $1.6 trillion."

Ben Harris with the Tax Policy Center told CNN he sees no basis for Biden's assertions that McCain's health plan amounts to the "largest increase" ever on U.S. middle-class taxpayers or that it would cost the middle class over a trillion dollars in taxes over the next four years.

Verdict: False. Biden's characterization ignores McCain's plan to provide tax credits.

Filed under: Fact Check • Joe Biden • John McCain
soundoff (3 Responses)
  1. McCain Invented the BlackBerry, Palin Invented the Manure Spreader

    Then again, McCain FLIP-FLOPS so often, its hard to know what the man believes

    September 26, 2008 02:54 pm at 2:54 pm |
  2. TRUTH

    FACT CHECK: Majority of Americans think McCAin and Palin are Morons:

    VERDICT: Absolutely true!!

    September 26, 2008 02:55 pm at 2:55 pm |
  3. Jesus Praising & Freedom Loving Patriot

    That's ok Joe. We forgive you.

    September 26, 2008 02:55 pm at 2:55 pm |