Return of the tax attack chain e-mail!

SUMMARY: A chain e-mail lays out the alleged differences between Barack Obama and John McCain on tax policy. It actually gets both candidates' positions wrong. And wrong. And wrong again ...

A chain e-mail claims that Sen. Barack Obama intends to raise pretty much all your taxes, while Sen. John McCain will leave them alone. The problem is that most of the e-mail's detailed assertions are false.

Fans of chain e-mails will recognize this latest e-mail as a twist on one we checked during the Democratic primary. That one compared both Obama and Hillary Clinton's respective tax plans with McCain's. This latest version, sent to PolitiFact by more than a dozen readers, leaves out Clinton and adds new "scarier" details, such as the false claim that Obama will tax all home sales.

We'll start at the beginning of the e-mail, go through its allegations and discuss its numerous inaccuracies. (Read the full text of the chain e-mail we're checking.)

Capital gains taxes

The e-mail begins with a charge about home sales. It says McCain will leave the existing capital gains taxes at 0 percent on home sales of up to $500,000 per home for couples, while Obama proposes a 28 percent tax on all home sales.

"If you are heading toward retirement and would like to down-size your home or move into a retirement community, 28% of the money you make from your home will go to taxes," the e-mail states.

First, let's briefly explain what capital gains taxes are. A capital asset is "almost everything you own and use for personal purposes, pleasure or investment," says the Internal Revenue Service. If you sell an asset and make a profit on it, that's a capital gain. Capital gains taxes vary depending on the tax filer's income and how long the asset has been held, but generally taxes on capital gains are measured by the long-term rate for upper-income tax brackets. Currently that rate is 15 percent.

There are exemptions to the capital gains tax, however, and one of the best-known exemptions is on home sales. In general, if you own your home and sell it for a profit, you are not taxed on the first $250,000 of profit if you are single, or on the first $500,000 of profit if you are a married couple. Neither McCain nor Obama has proposed changing this exemption.

The e-mail says that McCain supports capital gains taxes of "0 percent on home sales of up to $500,000 per home for couples." Technically, this is inaccurate, because the sales price on its own doesn't matter. It's the profit that matters (what you paid for the home minus what you're selling it for). Profits up to $500,000 per couple are exempt, no matter what the sales price.

The e-mail states "Obama will charge a 28 percent tax on all home sales." That's wrong. Obama intends to keep the same exemption for home sales as McCain. Most home sales under Obama's plan would also be taxed at 0 percent, unless, as we explained, profits on the home sale are more than $250,000 for a single person or $500,000 for couples.

We don't want to give the impression that there is no difference on the two candidates on capital gains tax, but the e-mail gets all the details wrong. The true difference is that McCain intends to leave the long-term capital gains tax at 15 percent, while Obama intends to raise it to about 25 percent for taxpayers reporting income of $250,000 or more per year.

But when it comes to home sales with the profits described above, McCain and Obama's policies are the same.

Dividends taxes

The e-mail also gets a number of things wrong about dividends taxes. Dividends are payments that companies make to stockholders as a way of distributing profits. Dividends taxes are now generally set at 15 percent. Obama has proposed raising them to as high as 28 percent, but possibly lower. The e-mail claims that Obama wants to raise them as high as 39.6 percent; this is incorrect.

There are other factual problems with what the e-mail says about dividends taxes.

"If you have any money invested in stock market, IRA, mutual funds, college funds, life insurance, retirement accounts, or anything that pays or reinvests dividends, you will now be paying nearly 40% of the money earned on taxes if Obama become president," the e-mail states.

That's not right. Any sort of ongoing tax-exempt investment — a 401(k), an IRA, and some types of college savings — would not require the holder to pay dividends taxes. The e-mail gives the impression that it would.

Finally, we've previously checked the e-mail's claim that experts "predict that higher tax rates on dividends and capital gains would crash the stock market yet do absolutely nothing to cut the deficit." We found that statement Barely True . Increases to dividends taxes would not crash the stock market.

Income taxes

The e-mail then claims that Obama will raise taxes on a variety of income tax brackets. Again it gets most of its numbers wrong. Obama has said he will not raise income taxes for people making less than $250,000.

It also gets its numbers wrong about the current tax rates. For a detailed analysis of the correct taxes for different tax brackets, read our previous item here .

Inheritance tax

The e-mail next mauls the facts concerning the inheritance tax, which is actually called the estate tax. The e-mail claims that George W. Bush "repealed" the estate tax, and it now stands at 0 percent. Though Bush reduced the tax, he did not repeal it. Rather, under his 2001 tax cut package, the estate tax reduces every year and then goes away for just a single year — 2010 — before reverting back to higher rates. (See the nonpartisan Tax Policy Center on estate taxes for more details.)

Currently, the estate tax generally applies only to estates worth more than $2-million (or $4-million for couples). Above those amounts, the tax rate tops out at 45 percent. Both Obama and McCain support renewing the current estate tax with a few changes. McCain proposes to increase the exemption to $5-million ($10-million for couples) and reduce the tax rate to 15 percent. Obama proposes to increase the exemption to $3.5-million ($7-million for couples) and leave the top rate at 45 percent.

So the e-mail is wrong when it says McCain wants a "0 percent" estate tax and that Obama wants to "restore" it . We ruled both of these statements False.

Other taxes

The e-mail concludes with a laundry list of other taxes Obama supposedly advocates. If you've read this far, you won't be surprised to learn that the e-mail is wrong here, too.

We'll address these claims one by one.

• "New government taxes proposed on homes that are more than 2400 square feet."

No, Obama does not propose this. And we're not sure where the 2,400-square-feet number comes from.

• "New gasoline taxes (as if gas weren't high enough already)"

Obama does not propose any new taxes on gasoline at the pump. He has said he intends to "close loopholes" on taxes for oil and gas companies.

• "New taxes on natural resources consumption (heating gas, water, electricity)"

Obama has not proposed any new taxes on "heating gas, water, electricity" or other utilities. He has said that in principle he supports taxes on energy sources that pollute, but he has not proposed any specific measures as part of his overall tax plan. (We checked a statement from John McCain that Obama says he will raise taxes on electricity and found it Barely True .)

• "New taxes on retirement accounts"

Obama has not proposed new taxes on retirement accounts.

• "New taxes to pay for socialized medicine so we can receive the same level of medical care as other third-world countries!!!"

We'll save the "socialized medicine" line for another day and say that Obama intends to pay for his health care plan with tax increases on people making over $250,000. We did find that Sen. Hillary Clinton's health care plan did not constitute "socialism"; Obama's plan is similar to Clinton's though Obama's plan does not include a mandate requiring people to purchase health care.

In conclusion, there are real differences between the Obama and McCain tax plans. One of the most detailed analysis is from the Tax Policy Center; read their report here .

Obama intends to raise the tax burden significantly on upper incomes, those making $250,000 or more. The chain e-mail doesn't hint much at that difference and instead deploys many false statements to imply that Obama will raise taxes on middle-class people. We find its broader argument false.