On Campaign Trail, Tax Issue Is Simple, and Complex

In Lee's Summit, Mo., John McCain said his opponent would raise taxes.
In Lee's Summit, Mo., John McCain said his opponent would raise taxes. (Stephan Savoia - AP)
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By Michael D. Shear and Peter Slevin
Washington Post Staff Writers
Tuesday, September 9, 2008

LEE'S SUMMIT, Mo., Sept. 8 -- As the U.S. housing crisis deepens and job losses accelerate, Sen. John McCain is trying to distill the debate over the economy into a simple, and familiar, message over taxes.

"I'll keep taxes low and cut 'em where I can," the Republican presidential candidate vowed Monday afternoon at a rally in the swing state of Missouri. "My opponent will raise your taxes! My tax cuts will create jobs. His tax increases will eliminate 'em."

McCain's approach is a familiar one for Republicans, who have for years promised to lower taxes and accused Democrats of wanting to raise them. "All you have got to do is appeal to the common sense of the voters. They get it," said Mark Salter, one of McCain's top aides. "Go out there and state your case. It's no more nuanced or complicated that that."

Mindful of the difficulty Democrats have had in countering a tough message on taxes, Sen. Barack Obama has charged that his Republican opponent is purposely steering away from offering the kind of detailed economic policies that voters are craving during hard times.

In Flint, Mich., where unemployment is twice the national average, Obama on Monday promised a cut to 95 percent of taxpayers. He said retirees earning less than $50,000 would pay no taxes on Social Security payments, and he urged Congress to pass a second stimulus package "so that people would have a little more money in their pockets."

Obama also talked about a $4,000 annual tuition tax credit for college, trade schools or retraining classes. He said that he would require employers to set up retirement investment accounts and that the federal government would make a one-time $500 starter contribution for each worker.

In a briefing for reporters on Monday, Obama campaign manager David Plouffe also described the economy as McCain's "huge Achilles' heel" and the central question in voters' minds. "On the economy, more and more so every day, people want a clear departure," from the policies of President Bush, Plouffe said.

But the advantage Obama has enjoyed for months on the economy appears to be fading as the Democratic candidate tries to make the more complicated argument to voters: Some taxes will go up, others will go down. Big corporations and the rich will pay more, but the middle class will pay less.

In a Washington Post-ABC News poll, Obama's edge on the economy has slipped to only five percentage points, a low for the campaign.

"He's a very smart guy and clever," McCain aide Salter said of Obama. "The way he describes things, it's always a little bit of this, a little bit of that. The fact is, he's proposing tax increases."

According to an analysis by the Tax Policy Center, a joint project of the Urban Institute and the Brookings Institution, Obama and McCain are both proposing tax plans that would result in cuts for most families. All taxpayers would receive a cut under McCain's plan. Taxes for those who make less than $226,982 would go down under Obama's proposal and they would rise for those who make more than $603,403. Obama would give the biggest cuts to those who make the least, while McCain would give the largest cuts to the very wealthy.

When talking about the economy, Obama typically moves beyond taxes and jobs to wrap in his call for new energy sources and affordable health care, arguing that both are connected to people's pocketbooks. In Flint, for example, he suggested that unemployed young people could be hired to insulate homes against harsh winters, teaching them a trade and providing a service.

Obama always talks about his proposal to spend $150 billion in federal tax money in the next 10 years on renewable fuels. He argues that it will ease the dependence on foreign oil, help the environment and create millions of jobs. Similarly, he said federal investment in roads and rails will produce jobs and make the U.S. more competitive.

In his stump speech, McCain also regularly goes beyond taxes, talking about the need for a new energy policy that will create thousands of jobs in the U.S. by building nuclear power plants, shifting to a new generation of electric-powered cars and increasing off-shore drilling, a pledge that invariably leads to a chant of "Drill, baby, drill!" from crowds. McCain regularly draws "boos" when the Republican accuses Obama of wanting to raise taxes.

McCain's embrace of Republican purists on taxes is somewhat ironic, given his history of being viewed with suspicion by anti-tax activists who accused him of betraying their cause by voting against President Bush's tax cut proposals early in the administration.

McCain's refusal to pledge not to ever raise taxes and his efforts to reform the campaign finance system made an enemy out of anti-tax crusaders like Grover Norquist. But Norquist and others have now rallied to McCain's side, prompted in part by his new, tough rhetoric on their key issue.

As they clashed on taxes, McCain and Obama also continued their war of words over who would be best able to bring change to Washington.

McCain accused Obama of pandering to the "extreme left" during the Democratic primaries, saying that the Democratic nominee once said he would reduce spending on weapons systems and now says that he will spend more on them.

"Mr. Obama told the extreme left whatever they wanted to hear during the primary," McCain said at the Missouri rally. "Now he's trying to tell you whatever he thinks you want to hear."

The McCain campaign released a new television ad touting the Republican ticket as a pair of mavericks and highlighting, among other things, Alaska Gov. Sarah Palin's move to stop "the Bridge to Nowhere."

In Michigan, Obama stood in front of three gasoline-electric hybrid SUVs and renewed his criticism of Palin for her claim that she opposes congressional earmarks and rejected the Alaska bridge.

"When she was mayor, she hired a Washington lobbyist to get earmarks, pork-barrel spending. All the things John McCain says are bad, she lobbied to get. And got a whole lot of it," Obama said. He added that she favored the bridge "until everybody started raising a fuss about it," and "suddenly, she was against it."

"I mean, you cant just make stuff up," Obama said. "You can't just reinvent yourself. The American people aren't stupid."

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