Tax plans take centre stage – but neither candidate’s maths add up

In the final days of the presidential campaign, with the gap in the polls closing but probably not fast enough for the John McCain-Sarah Palin ticket, the Republican candidate and his running mate, urged on by conservative media commentators, are aiming most of their firepower at Barack Obama's tax plans, suggesting that if Americans vote for Obama they are voting for socialism.

In a radio broadcast, McCain said: "At least in Europe, the socialist leaders who so admire my opponent are upfront about their objectives." In his half-hour advert - or 'info-mercial' - on Wednesday night, Obama joked that by the end of this week McCain would be "accusing me of being a secret communist because I shared my toys in kindergarten".

Dick Morris wrote that "Obama's stated goal of 'spreading the wealth around’ may indicate an inclination to embrace European-style socialist democracy,” while the ultra-conservative San Francisco Chronicle columnist Debra J Saunders reckons Obama's published proposals don't cover every part of a plan that could see top earners pay more than 55 per cent tax. Or "the largest tax increase since the Second World War", as McCain is fond of putting it.

But Hendrick Hertzberg, writing in this week's New Yorker, says McCain and Palin should be careful about taking these 'socialism' digs too far. He reveals that in the year 2000, asked if America was moving toward socialism, McCain replied: "Here's what I really believe: That when you reach a certain level of comfort, there's nothing wrong with paying somewhat more."

And as for Palin, a week before she became the Republicans' vice-presidential candidate, Hertzberg remembers her advocating a sort of Alaskan socialism. "We're set up, unlike other states in the union, where it's collectively Alaskans own the resources," Palin boasted. "So we share in the wealth when the development of these resources occurs."

Anyway, Obama's 'spread the wealth' comments really aren't the strongest line of attack for the Republicans to pursue, Salon's Joan Walsh argues. "They may claim Obama is a 'redistributor', but that's not going to make it onto a bumper sticker."

Alexander Cockburn, in his latest column for The First Post, describes the Republican attacks as "ludicrous invective". Cockburn writes: "A Republican Treasury Secretary from Goldman Sachs bails out the banks and all McCain and the right-wing talk show hosts can do is howl that the rather conservative and economically right-centrist Obama is a 'socialist'."

But what are the facts of the rival candidates' tax plans? CBS News asked the non-partisan Tax Policy Center to calculate what their alternative tax plans would mean to American tax-payers. Here's what they found:

A couple with two children on the median US income of $50,000 would currently face a tax bill of $772 in 2009. Because McCain would double the tax deduction for children, that family's bill would drop to $51. Under Obama, who is promising a new worker tax credit, they would actually receive a refund of $232.

A similar family earning $150,000 faces a tax bill of $18,370 under the current system. Obama would reduce it by about $1,000 - but McCain would cut it by $1,200. At the top end, a family earning $250,000 face a tax bill of $42,000 and that would not change under McCain. Under Obama, it would increase by $600.

However, the bottom line is that neither candidate's figures add up, Robertson Williams of the Tax Policy Center told CBS News. "By our estimates, Sen Obama's plan would increase the federal deficit by about $3.5tr over the next 10 years. Sen McCain would be even worse - about $5tr."

FIRST POSTED OCTOBER 31, 2008