McCain falsely claims that Obama voted to raise income taxes on individuals earning "as little as $32,000 per year."

The McCain campaign claims that Obama voted to raise income taxes on individuals who earn as little as $32,000 per year. That's wrong.

The resolution Obama voted for would not have increased taxes on any single taxpayer making less than $41,500 per year in total income, or any couple making less than $83,000. The $32,000 figure is approximately the taxable income of a single person making $41,500 per year, after all deductions and exclusions.

Obama's vote (for a non-binding budget bill) does not change the fact that his own tax plan would provide a tax cut of $502 for a non-married taxpayer earning $35,000.

Note: This is a summary only. The full article with analysis, images and citations may be viewed at Factcheck.org

Updated 7/11/08

Update, July 11: The McCain campaign has escalated its use of the false $32,000 claim. The campaign and the RNC have aired a radio ad in Virginia and Ohio in which a teacher repeats the false claim, saying: "Barack Obama promises to cut taxes, but he voted to raise taxes on folks earning as little as $32,000." Also, in a July 11 e-mail to reporters, McCain economic adviser Douglas Holtz-Eakin defended the figure:

Holtz-Eakin: In the past three days, much has been written about Barack Obama’s vote in favor of a budget resolution that raises income tax rates by three percentage points for 25, 28 and 33 percent tax brackets. The lowest of these brackets begins at an income level of $31,850.
What Holtz-Eakin fails to say anywhere in his message, however, is that he is referring to taxable income, and not to total income. As we already noted, an unmarried taxpayer with no dependents would need to have an income of at least $41,500 to reach the 25 percent bracket in 2008. A couple would have to earn at least $83,000. In 2008, the cutoff for the 25 percent bracket was $32,500 (not $31,850 as the McCain campaign continues to claim) in taxable income – or income after deductions and exclusions.

Holtz-Eakin is a former director of the Congressional Budget Office, so we were surprised to see him misstate such a basic figure. But he does. The $31,850 number he cites was for income earned last year, 2007, as the Internal Revenue Service notes on its Web site. The IRS announced last October that the tax brackets for this year would be widened, as they are every year, to adjust for inflation. For 2008, the 25 percent bracket begins at $32,550 of taxable income, as the IRS notes in this procedural manual.

Furthermore, Obama's vote was on a budget bill for 2009, at which time the bracket will start at an even higher level.

Holtz-Eakin says that Obama’s "words on the campaign trail do not match the actions he has taken. He tells the American people one thing but has a record that is quite different." The McCain campaign is surely entitled to compare Obama's voting record with his campaign promises. But the fact is, Obama didn't vote for raising taxes on persons making $32,000. The resolution could not have affected any single person making less than $41,500 in total income, and no married couple making less than $83,000.

We reiterate: McCain's $32,000 figure is phony.