Times Change

John McCain, June 11, 2002:

I am concerned that repeal of the estate tax would provide massive benefits solely to the wealthiest and highest-income taxpayers in the country. A Treasury Department study found that almost no estate tax has been paid by lower- and middle-income taxpayers. But taxes have been paid on the estates of people who were in the highest 20% of the income distribution at the time of their death. It found that 91% of all estate taxes are paid by the estates of people whose annual income exceeded $190,000 around the time of their death.

John McCain today:

Another of my disagreements with Senator Obama concerns the estate tax, which he proposes to increase to a top rate of 55 percent. The estate tax is one of the most unfair tax laws on the books, and the first step to reform is to keep it predictable and keep it low.

Obama's actual proposal:

Make permanent estate tax with $3.5 million exemption and 45 percent rate.

McCain likes to change his position on issues, and he also likes to be ignorant about basic facts, but you don't see the twofer every day.

Comments

He's a maverick god damnit. A maverick!!!!

Posted by Catpain Haddock | June 10, 2008 5:01 PM

...and he continuously gets away with it since the press are a bunch of saps and since everyone figures he's halfway to senile anyway. The problem is that we don't need a senile old man in office. At the rate McCain makes verbal gaffes, he'll end up ordering bombing raids over Vancouver while thinking Vancouver is Tehran - then refusing to admit his mistake.

Well - that might be pushing it. But seriously - can someone in the MSM actually parse the words of a PRESIDENTIAL CANDIDATE and call him out for the countless bits of nonsense he seems to toss out there every single week??

Posted by edsbowlingshoe | June 10, 2008 5:03 PM

Scaring people with the "death tax" has been a huge success for the right, from my own personal experience. I was lucky enough to grow up in a family with CPAs, so I've always known it was bullshit. But lots of my friends, even the ones I consider well informed, had no idea it only applied to very large estates etc etc until I informed them of it.

Posted by lfv | June 10, 2008 5:28 PM

McCain likes to change his position on issues, and he also likes to be ignorant about basic facts, but you don't see the twofer every day.

Almost certainly more true than you suspect, because neither of your points is correct.

First, there's no inconsistency between McCain's opposition to repealing the estate tax in 2002 and opposition to Obama's proposed estate tax of 55% (more on why it's 55% below). McCain has maintained the perfectly consistent position that the estate tax should be pegged at 15%. That may be too high or too low, but there's no inconsistency in his opposition to alternative estate taxes of 0% (Bush) and 55% (Obama).

Second, McCain is correct that Obama's plan will lead to a maximum estate tax of 55% in 2011. It is true that, under Obama's plan, the max rate for the estate tax will be 45% in 2010, which is the figure cited in the linked article and recited on your blog. But the law also provides that the max rate will increase to 55% in 2011. See:

http://www.taxpolicycenter.org/UploadedPDF/311153_IssuesOptions_10.pdf

http://online.wsj.com/article/SB121212106984832153.html?mod=taste_primary_hs

Posted by von | June 10, 2008 5:33 PM

McCain likes to change his position on issues, and he also likes to be ignorant about basic facts, but you don't see the twofer every day.

Almost certainly more true than you suspect, because neither of your points is correct.

First, there's no inconsistency between McCain's opposition to repealing the estate tax in 2002 and opposition to Obama's proposed estate tax of 55% (more on why it's 55% below). McCain has maintained the perfectly consistent position that the estate tax should be pegged at 15%. That may be too high or too low, but there's no inconsistency in his opposition to alternative estate taxes of 0% (Bush) and 55% (Obama).

Second, McCain is correct that Obama's plan will lead to a maximum estate tax of 55% in 2011. It is true that, under Obama's plan, the max rate for the estate tax will be 45% in 2010, which is the figure cited in the linked article and recited on your blog. But the law also provides that the max rate will increase to 55% in 2011. See:

http://www.taxpolicycenter.org/UploadedPDF/311153_IssuesOptions_10.pdf

http://online.wsj.com/article/SB121212106984832153.html?mod=taste_primary_hs

Posted by von | June 10, 2008 5:35 PM

Why-oh-why-does-the Atlantic not have better servers? (Sorry the double post, although I wouldn't have double posted had the Atlantic indicated that my first post went through instead of giving me an error message.)

Posted by von | June 10, 2008 5:40 PM

Von, when in 2002 did McCain say that he wanted to lower the tax rate on estates to 15%? I don't see that anywhere in his speech opposing repeal. All he talks about is increasing the unified credit.

Posted by Peter H | June 10, 2008 6:12 PM

Von, when in 2002 did McCain say that he wanted to lower the tax rate on estates to 15%? I don't see that anywhere in his speech opposing repeal. All he talks about is increasing the unified credit.

He may not have. I recalled it as being part of his platform in 2000, but, according to Google, I may have misremembered: McCain instead proposed an alternative tax cut that expanded the number of middle-class Americans with a max 15% marginal rate, and also proposed reducing the capital gains tax to 15%. McCain also supported Feingold's proposals to reduce (but not eliminate) the estate tax, although diligent Googling also does not show a specific reference to a 15% rate.

Thus, although MY is wrong to claim that McCain has been inconsistent on the estate tax -- i.e., my general point is sound -- you should disregard the following sentence in my comment as unsupported:

"McCain has maintained the perfectly consistent position that the estate tax should be pegged at 15%."

Instead, the point should read:

There's no inconsistency between McCain's opposition to repealing the estate tax in 2002 and opposition to Obama's proposed estate tax of 55% (more on why it's 55% below). McCain has consistently maintained the position that estate taxes should be reduced but not eliminated (he currently proposes a 15% rate). Thus, there's no inconsistency in his opposition to alternative estate taxes of 0% (Bush) and 55% (Obama).

Posted by von | June 10, 2008 6:46 PM

We'd have to go back and look at the record in 2001-2 to see if McCain changed his position. At the very least, it's a change in emphasis from what he said in 2002: there's no more talk about fiscally responsible estate tax reform, and no more talk about the distributional consequences. It mirrors his overall reversal on the Bush Tax Cuts, which you can't deny he's changed his position on.

Posted by Peter H | June 10, 2008 7:23 PM

I second lfv's comment. The right has been hugely successful at scaring the American people about the "death tax" through misinformation and hyperbole. I wish the press would do a better job on covering this issue. Many of my most ardent liberal friends even are believe the lie that it hits middle class families, when in reality it only affects the top 1%.

Posted by amouse | June 10, 2008 7:28 PM

von,

Save your trouble. Matt's in the habit of being massively dishonest when discussing McCain.

Posted by right | June 10, 2008 8:31 PM

Von, I'm not sure what Senator McCain's position on the estate tax is -- he seems to support keeping some sort of estate tax, but voted in favor of a 2006 bill that would have made the estate tax repeal permanent.

But you're dead wrong on Senator Obama's. Barack Obama's website says that he proposes a 45 percent estate tax rate with a $7 million exemption.

Posted by JasonF | June 10, 2008 9:50 PM

But seriously - can someone in the MSM actually parse the words of a PRESIDENTIAL CANDIDATE and call him out for the countless bits of nonsense he seems to toss out there every single week??
Yes, please. Someone.

Seriously, he makes embarrassing, or hypocritical, gaffes several times a week. I have yet to see anyone call him on them consistently.

When Obama points out the false statements, McCain usually throws back an ad-hominem attack that doesn't address his gaffe at all. And I have yet to hear anybody point that out as well. I hope this honeymoon phase doesn't last the whole general election.

Posted by Vincent | June 10, 2008 11:06 PM

We'd have to go back and look at the record in 2001-2 to see if McCain changed his position. At the very least, it's a change in emphasis from what he said in 2002: there's no more talk about fiscally responsible estate tax reform, and no more talk about the distributional consequences. It mirrors his overall reversal on the Bush Tax Cuts, which you can't deny he's changed his position on.

Obviously, I disagree that "We'd have to go back and look at the record in 2001-2 to see if McCain changed his position." However, since you concede that "We'd have to go back and look at the record in 2001-2 to see if McCain changed his position", you concede that Mr. Yglesias' claim that McCain did change his position is, at a minimum, unsupported.

But you're dead wrong on Senator Obama's. Barack Obama's website says that he proposes a 45 percent estate tax rate with a $7 million exemption.

Yes, as I mentioned, Obama's website address what Obama's proposals would do the estate tax in 2010, when the Bush cuts sunset. What Obama's website does not mention is that, absent change, the law would increase the rate to 55% in 2011.

Posted by von | June 11, 2008 9:02 AM

If McCain's current position is simply make all Bush tax cuts permanent, that would mean abolishing the estate tax (while continuing two wars and starting a third that also will have no end date within the current millenium). There are also social political issues about the estate tax (slowing at least the creation of few "great families" that will dominate the Republic) that don't get debated enough.

Dear Trolls, you can't complain tha Matt is mischaracterizing McCain's positions and then mischaracterize Obama's. Since his position is not simply returing in 2011 to the status quo ante of the estate tax, but rather to permanently reform it, it misrepresents his position to attribute to him the old rate.(I would favor a higher exemption and steeper rate myself, say a $15,000,000 exemption, which will then be adjusted for inflation each year, and then a 75% rate on the amount above the exemption).

McCain is not stupid for doing it, since his position will be mindlessly repeated on Fox News, CNBC, and by folks on the web like "Right" and "Von."

Posted by rickstersherpa | June 11, 2008 11:10 AM

Rickstersherpa:

If McCain's current position is simply make all Bush tax cuts permanent, that would mean abolishing the estate tax (while continuing two wars and starting a third that also will have no end date within the current millenium).

McCain's position is to implement an estate tax of 15%. Follow the article that MY himself links.

Dear Trolls, you can't complain tha Matt is mischaracterizing McCain's positions and then mischaracterize Obama's. Since his position is not simply returing in 2011 to the status quo ante of the estate tax, but rather to permanently reform it, it misrepresents his position to attribute to him the old rate.

Obama's proposal allows the Bush cuts to sunset, which results in tax rates of 45% in 2010 and 55% in 2011. If you link to his proposal that (allegedly) locks in the 45% rate for 2011, I'll happily concede the point -- but, of course, you haven't done that.

McCain is not stupid for doing it, since his position will be mindlessly repeated on Fox News, CNBC, and by folks on the web like "Right" and "Von."

I appreciate a good ad hom -- particularly the scare quotes around "von."

Posted by von | June 11, 2008 1:04 PM

Von,

Obviously, I disagree that "We'd have to go back and look at the record in 2001-2 to see if McCain changed his position." Obviously, I disagree that "We'd have to go back and look at the record in 2001-2 to see if McCain changed his position." However, since you concede that "We'd have to go back and look at the record in 2001-2 to see if McCain changed his position", you concede that Mr. Yglesias' claim that McCain did change his position is, at a minimum, unsupported.

Let's look at it this way. McCain gave a speech in 2002 oppposing repeal of the estate tax, expressing concern that it would (1) be overwhelmingly tilted to the rich (2) provide "massive benefits solely to the wealthiest and highest-income taxpayers in the country" (3)discourage charitable giving. He did support raising the exemption to $5 million, an alternative supported by Democrats like Russ Feingold, but nowhere did he mention lower rates.

The proposal McCain supports now, to raise the exemption to $5 million and lower the rate to 15% would be almost as costly as a full repeal ("A tax that combined a 15 percent rate and an exemption level of $5 million ($10 million for married couples) would lose 84 percent of the revenue lost by full repeal, according to estimates by the Joint Committee on Taxation."). The rate reductions would overwhelmingly benefit estates valued at over $5 million. And the rate reductions would also diminish the incentives for charitable contributions and bequests - according to the Urban-Brookings Tax Policy Center, "in 2003 estate tax returns, more than half of charitable bequests were on estates valued at over $10 million, and two-thirds were on estates valued at over $5 million."

So, in practical terms, McCain is supporting a proposal that would have almost all the negative consequences he warned against in 2002.

Yes, as I mentioned, Obama's website address what Obama's proposals would do the estate tax in 2010, when the Bush cuts sunset. What Obama's website does not mention is that, absent change, the law would increase the rate to 55% in 2011.

When has Obama ever said that he would let all the Bush tax cuts sunset in 2011? Every article I've seen has said that the Democrats would only let them expire for the top two brackets.

Posted by Peter H | June 11, 2008 3:51 PM