Return of the $32,000 Tax Increase Claim
SPARKS, Nev. — Live from Sen. John McCain’s town hall meeting at Reed High School in this Reno suburb, where the presumptive Republican nominee is enjoying the company of an extremely friendly and enthusiastic, standing-room-only crowd in the school gymnasium. Before the event, campaign staffers handed out ID tags to the traveling press bearing a picture of the cast of "Reno 911."
On to the substance — McCain just revived the claim that Sen. Barack Obama voted to increase taxes on people making as little as $32,000 per year. This claim had disappeared for a few weeks after FactCheck.org released an analysis debunking the assertion. From the analysis:
What Obama voted for was a budget resolution that would have allowed most of the provisions of the 2001 and 2003 tax cuts to expire. In particular, the resolution would allow the 25 percent tax bracket to return to its pre-2001 level of 28 percent. That bracket kicks in at $32,550 for an individual or $65,100 for a married couple. (The McCain campaign relies on an AP article which puts the cutoff at $31,850, but that figure is from 2007, not this year.) So the McCain campaign claims that anyone making "as little as $32,000" would be affected by the rate increase.
But as those of you who have filled out a 1040 know, that’s not actually how income taxes work. We don’t pay taxes on our total earnings; we pay them based on our "taxable income." The Urban-Brookings Tax Policy Center’s Eric Toder told FactCheck.org that "people with taxable income of $32,000 would have a total income greater than that." In 2008, anyone filing taxes with single status would be entitled to a standard deduction of $5,450, as well as a personal exemption of $3,500. So to have a taxable income high enough to reach the 25 percent bracket, an individual would need to earn at least $41,500 in total income, while a married couple would need a combined income of at least $83,000.
I guess it is the McCain campaign’s view that the public’s collective memory extends back only three weeks.