McCain Response to Obama's Latest TV Ad

"America's business taxes are the second highest in the world, and that is driving American jobs overseas.  So while American families are hurting and jobs are becoming scarce, Barack Obama is pushing for billions in higher taxes -- it's a recipe for economic disaster." ---Tucker Bounds, spokesman John McCain 2008
 
 
BARACK OBAMA'S "THREE TIMES" THE DISTORTIONS
 
DISTORTION #1: Barack Obama's ad claims that cutting taxes on American businesses is somehow bad for the economy. "Can we really afford more of the same? John McCain's tax plan for big corporations, $200 billion in new tax breaks." (Obama For America, "Three Times" Ad, 8/20/08)

FACT: Barack Obama said that he too supports cutting taxes for corporations.

• In An Interview With The Wall Street Journal, Barack Obama Said That He Was Considering Lowering Corporate Taxes. "Sen. Barack Obama shed new light on his economic plans for the country, saying he would rely on a heavy dose of government spending to spur growth, use the tax code to narrow the widening gap between winners and losers in the U.S. economy, and possibly back a reduction in corporate tax rates. ... Sen. Obama's nod to lowering corporate taxes comes as Republicans have been attacking him for proposals that would raise the cost of doing business, such as his pledge to raise the tax rate on capital gains, and his vow to increase the top income-tax rates, which are often used by small, unincorporated enterprises. He didn't say how deeply he would cut the rate, but said it could be trimmed in return for reducing corporate tax breaks, simplifying the tax system." (Bob Davis and Amy Chozick, "Obama Plans Spending Boost, Possible Cut In Business Tax," The Wall Street Journal, 6/17/08)

FACT: Lowering taxes on American businesses will encourage more businesses to stay in the United States and create jobs here.

• According To A Study By The OECD, "Corporate Taxes Are Most Harmful For Growth." "Economists argue over how much this tax penalty on corporate profits injures U.S. competitiveness and drives capital overseas. We've long believed that it hurts a lot. And now even the folks at the Paris-based Organization for Economic Cooperation and Development (OECD) say they agree. A new OECD study, 'Taxes and Economic Growth,' examines national tax burdens and their impact on growth and incomes in member countries. It concludes that 'corporate taxes are most harmful for growth, followed by personal income taxes, and then consumption taxes.' The study adds that 'investment is adversely affected by corporate taxation,' and that the most profitable and rapidly growing companies tend to be the most sensitive to high business tax rates." (Editorial, "America The Uncompetitive," The Wall Street Journal, 8/15/08)
• Tax Policy Center: Lowering The Corporate Tax Rate "Would Encourage Multinational Corporations To Invest More In The United States." "In recent years, other countries have been lowering their corporate tax rate and broadening the base and similar changes in the United States could be beneficial. A lower corporate tax rate would encourage multinational corporations to invest more in the United States and, for a given amount of investment, to report a larger share of their worldwide taxable income to the United States instead of foreign treasuries." ("An Updated Analysis of the 2008 Presidential Candidates' Tax Plans," Tax Policy Center, 8/15/08)

DISTORTION #2: John McCain has proposed additional tax breaks for oil companies. "Oil companies, $4 billion." (Obama For America, "Three Times" Ad, 8/20/08)

FACT: Barack Obama's claim that John McCain favors a $4 billion tax cut for oil companies is totally misleading.

• FactCheck.org: Barack Obama Claim Is "Misleading" Because "McCain Is Not Proposing Any Special Tax Breaks For The Oil Industry." "The ad's claim that 'McCain wants to give [oil companies] another $4 billion in tax breaks' is also somewhat misleading. McCain is not proposing any special tax breaks for the oil industry. What he's proposing is a reduction in the corporate income tax rate for all companies." (Brooks Jackson And Emi Kolawole, "Obama's Overstatement," FactCheck.org, http://www.factcheck.org/elections-2008/obamas_overstatement.html, 8/4/08)

John McCain has proposed cutting the tax rate on all American businesses across the board from 35 to 25 percent.

• PolitiFact: Obama's Statement "Barely True," As Obama Is "Cherry-Picking" On Tax Cut, As "The Corporate Tax Rate Reduction Would Apply To ALL Corporations." "Obama is cherry-picking here. The corporate tax rate reduction would apply to ALL corporations. Yes, Exxon Mobil, but also to Wal-Mart, General Motors and Home Depot, to name a few of the other Fortune 50 biggies. Even everybody's favorite, Starbucks, would get the same tax break. Obama's statement is technically true, but singling out oil companies suggests McCain has targeted oil companies for tax breaks. He hasn't. We rate Obama's statement, and the claim in the ad, Barely True." ("Big Oil, Like All Companies, Would Get Tax Break," PolitiFact.com <http://www.politifact.com/truth-o-meter/statements/563/> , Accessed 8/4/08)
• John McCain Will Reduce The Federal Corporate Tax Rate To 25 Percent From 35 Percent. "A lower corporate tax rate is essential to keeping good jobs in the United States. America was once a low-tax business environment, but as our trade partners lowered their rates, America failed to keep pace. We now have the second highest corporate tax rate in the world, making America a less attractive place for companies to do business. American workers deserve the chance to make fine products here and sell them around the globe." (John McCain 2008 Official Website, "Jobs For America," http://www.johnmccain.com/Issues/JobsforAmerica/taxes.htm, Accessed 8/3/08)

• Columbus Dispatch: John McCain Has "Proposed [A] Cut In The Corporate Tax Rate For All U.S. Companies." "McCain's economic plan includes a proposed cut in the corporate tax rate for all U.S. companies, not just oil companies." (Jonathan Riskind, "Campaign Ad Watch," The Columbus Dispatch, 8/2/08)

FACT: Barack Obama voted for the 2005 Bush-Cheney Energy Bill, which contained billions in tax breaks for big oil.

• Barack Obama Voted For The 2005 Energy Bill. (H.R. 6, CQ Vote #152: Motion Agreed To 92-4: R 53-1; D 38-3; I 1-0, 6/23/05, Obama Voted Yea; H.R. 6, CQ Vote #158: Passed 85-12: R 49-5; D 35-7; I 1-0, 6/28/05, Obama Voted Yea; H.R. 6, CQ Vote #213: Adopted 74-26: R 49-6; D 25-19; I 0-1, 7/29/05, Obama Voted Yea)

• The 2005 Energy Bill Included $2.8 Billion In Subsidies For Oil And Natural Gas Production. "The conference agreement provides for $14.6 billion in tax breaks and credits between 2005 and 2015, including: -- $2.8 billion for fossil fuel production..." (Toni Johnson, "CQ Bill Analysis: HR 6," Congressional Quarterly's "CQ Bill Analysis," www.cq.com <http://www.cq.com/> , Accessed 7/14/08)

• John McCain Voted Against The 2005 Energy Bill. (H.R. 6, CQ Vote #152: Motion Agreed To 92-4: R 53-1; D 38-3; I 1-0, 6/23/05, McCain Voted Nay; H.R. 6, CQ Vote #158: Passed 85-12: R 49-5; D 35-7; I 1-0, 6/28/05, McCain Voted Nay; H.R. 6, CQ Vote #213: Adopted 74-26: R 49-6; D 25-19; I 0-1, 7/29/05, McCain Voted Nay)

• John McCain Criticized The 2005 Energy Bill's "Handouts To Big Business And Oil Companies," Calling Them Irresponsible. McCain: "This bill does little to address the immediate energy crisis we face in this country. The handouts to big business and oil companies are irresponsible and will be disastrous for people of Arizona. I cannot in good conscience, vote to pass legislation that does not adequately address issues related to energy efficiency, security, and energy independence." (Sen. John McCain, "McCain, Kyl Say No To Flawed Energy Bill," Press Release, 6/28/05)

DISTORTION #3: John McCain supports companies shipping jobs overseas with tax giveaways. "Companies shipping jobs overseas keep their tax giveaways." (Obama For America, "Three Times" Ad, 8/20/08)

• Tax Policy Center: Lowering The Corporate Tax Rate "Would Encourage Multinational Corporations To Invest More In The United States" And "Report A Larger Share Of Their Taxable Income To The United States." "In recent years, other countries have been lowering their corporate tax rate and broadening the base and similar changes in the United States could be beneficial. A lower corporate tax rate would encourage multinational corporations to invest more in the United States and, for a given amount of investment, to report a larger share of their worldwide taxable income to the United States instead of foreign treasuries." ("An Updated Analysis of the 2008 Presidential Candidates' Tax Plans," Tax Policy Center, 8/15/08)

• The Washington Post: Barack Obama's Plan On Corporate Tax Breaks "Would Make It Even Harder" For Corporations To Compete And Will Hurt Workers In The United States. "Barack Obama says that he would 'end tax breaks for corporations that ship jobs overseas" and blasts John McCain for refusing to condemn such loopholes. But the offshoring issue is more complicated than Mr. Obama's rhetoric suggests. ... Mr. Obama's proposal would change the provision in which U.S.-based companies don't have to pay taxes on their earnings abroad until that income is 'repatriated' -- brought back into the United States, for example as dividend payments. ...  Mr. Obama's suggested fix would make it even harder for them to compete abroad -- ultimately hurting workers and others here." (Editorial, "The Export Of Jobs," The Washington Post, 8/17/08)