The Truth-O-Meter Says:

"I want to give every American a $5,000 refundable tax credit."

John McCain on Tuesday, October 7th, 2008 in a debate in Nashville, Tenn.

$5,000 for couples, but half that for "every American"

Candidates often try to place their proposals in the best possible light. But John McCain went a step too far in saying at a debate in Nashville on Oct. 7, 2008, that he wants to give "every American a $5,000 refundable tax credit."

It's actually half that: $2,500 for singles and $5,000 for couples.

The tax credit is part of McCain's health proposal, which seeks to increase competition for health care by reducing reliance on employer-provided health insurance.

Most Americans who have health insurance get it through their employer. Usually, the premiums are split so that the employer pays part and the employee pays part. Strictly speaking, the part that the employer pays is compensation, and workers would owe taxes on it if there wasn't a tax exemption in federal law. The exemption makes employer-provided health insurance more attractive to both workers and employers.

McCain's idea is that people should be able to go out on the open market and buy their own health insurance, and not be pushed into an employer-provided insurance plan by tax incentives. So under McCain's plan, the tax exemption for employer-provided health insurance would disappear, and people would get a tax credit to spend on any health insurance they wish. They might choose to use their employer's plan and use the tax credit to offset the new tax on the benefit, or they might go off and buy insurance on their own.

Another caveat about McCain's tax credit: You can't get cash for it. To ensure that it goes to health care, the credit is payable directly to insurance companies. Any remainder would go into a special health spending account.

We've seen Barack Obama talk about a $1,000 tax cut for working families, when it's actually a $500 per person tax credit. McCain would be accurate if he had said $5,000 per family, but his statement in the debate takes things too far. It's $2,500 for single people. We rate his statement Half True.

About this statement:

Published: Thursday, October 9th, 2008 at 12:00 a.m.

Subjects: Health Care


John McCain campaign Web site, Health Care Plan , accessed Oct. 3, 2008

The Tax Policy Center, An Updated Analysis of the 2008 Presidential Candidates' Tax Plans , Sept. 12, 2008

Interview with Eric Toder of the Tax Policy Center

The Urban Institute, An Analysis of the McCain Health Care Proposal , Sept. 22, 2008

The Commonwealth Fund, The 2008 Presidential Candidates' Health Reform Proposals: Choices For America

Written by: Angie Drobnic Holan
Researched by: Angie Drobnic Holan
Edited by: Amy Hollyfield

How to contact us:

Email comments and suggestions for fact-checks to or find us on Facebook, Twitter and Google+. (If you send us a comment, we'll assume you don't mind us publishing it unless you tell us otherwise.)

We're especially interested in any chain emails or social media memes that you would like us to check out.

Browse The Truth-O-MeterTM: