Obama's return punch misses its mark

SUMMARY: Obama's ad says McCain will give oil and drug companies a break while offering families "almost nothing." Obama leaves out clarifying details; the Truth-o-Meter knocks him for it.

John McCain has unveiled a couple of ads mocking Barack Obama as a celebrity and criticizing his tax policies. We rated McCain's attack that Obama wants to raise taxes on electricity as Barely True.

Obama punched back on Aug. 11, 2008, releasing an ad that calls McCain "a Washington celebrity, playing the same old Washington games."

"The lobbyists – running his low road campaign," the ad says. "The money – billions in tax breaks for oil and drug companies, but almost nothing for families like yours."

We've looked at lobbyists and the McCain campaign previously and found that many former lobbyists work for his campaign, though he does not hire active lobbyists for his campaign staff.

In this instance, we'll look at whether McCain offers "billions in tax breaks for oil and drug companies, but almost nothing for families like yours."

Under McCain's proposed tax plan, it is true that oil and drug companies will get reduced taxes, but this is because McCain advocates lowering the overall corporate tax rate, from 35 percent to 25 percent. He's not doling out special breaks for particular industries as the ad implies.

The Obama campaign points to an analysis by the Center for American Progress to show that oil companies and drug makers will receive "billions" in tax breaks. The center looked at corporate profits reported in publicly available Security and Exchange Commission filings, and then computed tax reductions under McCain's plan. The center acknowledges that company profits could differ substantially from the reported taxable income because of accounting rules. Corporations' tax returns are not public records. So it's not possible to know if their analysis is technically accurate, though it seems at least somewhat reasonable that a 10 percent reduction in corporate tax rates could result in billions saved for highly profitable industries.

Still, we find the singling out of oil and drug companies to be a significant distortion of McCain's plan.

The ad also says that McCain offers "almost nothing for families like yours." This too isn't entirely accurate. McCain proposes increasing the tax exemption for dependents (usually children) from today's $3,500 to $7,000. So he does offer some tax cuts for families that include children or other dependents.

Obama, on the other hand, proposes several different tax cuts aimed at the middle and lower incomes: a $500 tax credit for workers to offset payroll taxes, mortgage interest deductions for people who don't itemize their returns, expansion of the earned income tax credit, and eliminating taxes for seniors who make less than $50,000.

The statement that McCain offers "almost nothing for families like yours," though, depends on what your family is like and how you define "almost nothing." McCain does propose increasing the exemption for dependents. Some families will consider that a significant tax savings while others might rate it "almost nothing."

His tax cuts for oil and drug companies, though, are part of an across-the-board reduction of corporate taxes that McCain says will make the United States more competitive with countries around the world. When we look at Obama's overall statement -- billions in tax breaks for oil and drug companies, but almost nothing for "families like yours" -- we find accuracy problems on both halves of the claim. (The tax breaks aren't just for oil and drug companies, and McCain does offer some tax breaks for families.) Putting the statements together like that only makes it worse, leading us to rate his statement Barely True.