During an interview on CNBC today, Douglas Holtz-Eakin, an economic adviser to Sen. John McCain (R-AZ), asserted that “you can’t cut taxes for 95 percent of the American people, if just under 50 percent aren’t paying taxes.” However, minutes later, he claimed that McCain would cut taxes for “everybody.” Watch it:
By Holtz-Eakin’s own standard, a cut for “everybody” should be impossible. But by claiming 50 percent of Americans “aren’t paying taxes,” Holtz-Eakin is simply furthering the McCain campaign’s false story of low-income Americans not paying taxes.
While the bottom one-third of Americans do not pay federal income taxes, as Brian Levine noted earlier “they do pay federal payroll and excise taxes, as well as state and local taxes.” Simply having no federal income tax liability does not give someone a tax-free existence.
Furthermore, McCain does not cut taxes for “everybody.” In fact, over 100 million middle class households do not benefit from his tax plan. Meanwhile, this weekend McCain unveiled a new tax proposal – temporarily cutting the capital gains tax from 15 percent to 7.5 percent – that gives two-thirds of its benefit to millionaires and gives “on average, nothing” to people making less than $50,000 a year.
Holtz-Eakin’s two statements only make sense if he thinks “everybody” actually means “the wealthiest Americans.”