John McCain wants to "give oil companies another $4-billion" in tax breaks.
Barack Obama on Friday, September 26th, 2008 in Oxford, Miss.
Better context for a once-questionable tax claim
During the presidential debate, John McCain and Barack Obama sparred over taxes.
McCain discussed his support for a reduction in corporate tax rates, which he said would help create jobs. A few moments later, he criticized Obama for voting for the 2005 energy bill, which McCain said was full of unnecessary spending.
"It was festooned with Christmas tree ornaments," McCain said. "It had all kinds of breaks for the oil companies, I mean, billions of dollars worth. I voted against it; Sen. Obama voted for it."
"John, you want to give oil companies another $4-billion," Obama retorted.
We've checked the controversy over Obama's energy vote previously . We found the bill, which did become law, included both incentives for clean energy and tax breaks for oil companies. Obama has said he felt the good in the bill outweighed the bad.
Here, we'll look at Obama's claim that McCain wants to give oil companies $4-billion in tax breaks, a claim he's made several times.
The Obama campaign defends this claim because McCain supports cutting corporate taxes, reducing them from a maximum rate of 35 percent to a maximum rate of 25 percent.
Based on that tax change, the Obama campaign estimates that oil companies would save $4-billion a year. Specifically, they cite a study from the left-leaning Center for American Progress Action Fund. That group analyzed financial statements from the Securities and Exchange Commission for the five largest oil companies and calculated current and deferred taxes paid in 2007 to the federal government for income earned from U.S. operations. They then calculated how much less those companies would pay if the corporate tax rate were dropped from 35 percent to 25 percent. The total savings to the five oil companies, $3.8-billion; $1.2-billion Exxon Mobil alone.
In our previous look at this $4-billion claim, Obama didn't mention McCain's position on cutting corporate taxes for all companies. We concluded that Obama was cherry-picking by singling out oil companies. That led us to rule his statement Barley True.
But at the debate, the two candidates had just discussed McCain's position on corporate taxes and were talking about how overarching policy could affect tax breaks for oil companies. The context of the exchange explained McCain's overall policy on corporate taxes. As a result, when Obama made the claim in the debate, it was True.