Larger estates will be taxed, just like now

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.

Here, we’ll look at the e-mail’s claims about McCain and the estate tax, which it refers to as the inheritance tax. For an examination of the e-mail’s other claims, read

our full article here

.

The e-mail claims that President George W. Bush “repealed” the estate tax, and it now stands at 0 percent.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.

Although the e-mail captures the broad idea that McCain wants to reduce estate taxes more than Obama, it is wrong when it says McCain wants a “0 percent” estate tax, and it’s also wrong that the estate tax is at zero percent now. We rate this statement False.

By

Angie Drobnic Holan

Former Editor-in-Chief

August 4, 2008

Truth-o-meter Ruling

False

Statement

John McCain will keep the estate tax at 0 percent, the same as it is now.

Context

a chain e-mail

Speaker/Target

Speaker: Chain email

Statement Date

July 23, 2008