Chain e-mail fudges tax numbers
By Angie Drobnic Holan
Published on Monday, March 24th, 2008 at 7:16 p.m.
A chain e-mail going around the Internet announces "Voters Beware! ... We are in for big time trouble if either H. Rodham Clinton or B. Hussein Obama were to be elected as President of the United States." ( Click here to read the chain e-mail in its entirety .)
The e-mail asserts that Sens. Clinton and Obama want to raise a number of different taxes, while Sen. John McCain would leave things as they are.
At first glance, it seems like a sound proposition. McCain does support President Bush's program of tax cuts that are set to expire during the next president's administration. (He's taken political heat because he decided to support the tax cuts after initially opposing them. But he does support them now.)
Meanwhile, Clinton and Obama have said repeatedly that the Bush tax cuts need to be rolled back for the wealthiest citizens.
But the e-mail gets a lot of its details wrong, such as whom the taxes apply to and what the implications of the tax increases might be. And, it makes the laughable assertion that rolling the dividends tax back to pre-Bush levels would "crash the stock market."
The e-mail makes a number of points; we chose to focus on three:
* The e-mail says that Clinton and Obama want to raises taxes on individuals making between $30,000 and $50,000 a year, and on married couples making between $60,000 and $125,000. But Clinton and Obama have said they want to raise income taxes only on higher-income levels. Clinton has mentioned raising taxes on people who make $250,000 or more, while Obama has said he wants to raise taxes on the top 1 percent. We find this statement to be False.
* The e-mail says that Obama and Clinton want to raise capital gains taxes, which means taxes on property. It's true that Obama has specifically talked about raising the capital gains rate, while Clinton hasn't staked out a clear position. But the e-mail is wrong when it implies that capital gains taxes apply to all home sales. In general, profits from home sales are exempt from capital gains taxes on the first $250,000 for single people and $500,000 for couples. We find this statement to be Barely True.
* The e-mail says that Clinton and Obama want to raise dividends taxes, which would "crash the stock market." It's true that Obama wants to raise taxes on dividends by letting the Bush tax cuts expire, with Clinton again not having a specific proposal on the issue. But higher dividends taxes certainly would not crash the stock market as the e-mail states. Even a dividends tax opponent describes that scenario as "hyperbolic." We find this statement to be Barely True.
To check these assertions, we consulted the campaign Web sites, searched news articles and debate transcripts and interviewed two tax experts. Obama put forth a detailed plan in September 2007 on his tax plans, but we could find no public statements from Clinton saying exactly what she thought the rates on capital gains taxes and dividends should be. We asked her campaign for a response but did not hear back. Still, Clinton has spoken of rolling back the Bush tax cuts on the wealthiest individuals, and studies indicate that wealthier people benefit the most on lower taxes for capital gains and dividends.
One of the tax experts we talked to was William Ahern with the Tax Foundation, a business-backed tax policy group. He said the chain e-mail appears to be a variation on an earlier e-mail that compared taxes under the Bush administration with taxes under the Bill Clinton administration. The e-mail referenced the Tax Foundation but got a good many of its numbers wrong; the Tax Foundation corrected the e-mail here. Our friends at Factcheck.org also examined that e-mail; check out their conclusions here.
The latest e-mail may get some things wrong, but it certainly taps into an antitax sentiment that favors Republican candidates.
Ahern, for instance, said he's skeptical that the two Democrats will be able to keep promises to not raise taxes on people with incomes less than $250,000 given the cost of some of their other policies. And, they'll have to get whatever tax proposals they support through Congress, which has the final authority on setting taxes.
"Tax-related promises on the hustings are not reliable," he said "So voter beware."
We're not ruling here on what will happen once a candidate is in office. Rather, we're evaluating what the candidates have said that they intend to do. And based on that criteria, the chain e-mail on taxes needs an accuracy check on income taxes, and corrections on a few other things as well.
Sources:CNN, Democratic Debate Transcript , Jan. 31, 2008
CNN, Democratic Debate Transcript , Feb. 21, 2008
Associated Press, Obama says he would cut $80 billion in taxes on workers, seniors and homeowners, Sept. 18, 2007
Associated Press, McCain: Make Bush tax cuts permanent , Feb. 15, 2008
Internal Revenue Service, 2007 Federal Tax Rate Schedules
Bankrate.com Capital gains taxes: There's more than one rate , updated Feb. 8, 2008
Internal Revenue Service, Tax Facts About Capital Gains and Losses
U.S. Senate, Roll call vote on extending the capital gains tax , March 21, 2007
The Associated Press, Obama plan: $80B in tax relief , Sept. 18, 2007
Hillary Clinton campaign Web site, ,Hillary Clinton Proposes Ending Unfair Tax Breaks for Wall Street Investment Managers , July 13, 2007
Interview with William Ahern of the Tax Foundation
Interview with Eric Toder of the Urban Institute
Internal Revenue Service, Dividends
Associated Press, Obama plan: $80B in tax relief , Sept. 18, 2007
Hillary Clinton campaign Web site, Hillary Clinton Proposes Ending Unfair Tax Breaks for Wall Street Investment Managers , July 13, 2007
Researchers: Angie Drobnic Holan
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