AP uncritically reported false McCain claim that under Obama's tax plan, “people who pay no taxes would receive a $500 tax credit”

The AP reported that Sen. John McCain has said that Sen. Barack Obama “would hand out 'welfare' because even people who pay no taxes would receive a $500 tax credit” under Obama's tax plan. The AP did not note that Obama has proposed “a tax cut of $500 for workers or $1,000 for working couples” who pay payroll taxes, and that, in fact, all American workers are required to pay taxes on their wages for Social Security and Medicare.

In an October 23 Associated Press article, Jennifer Loven reported that Sen. John McCain has said that Sen. Barack Obama “would hand out 'welfare' because even people who pay no taxes would receive a $500 tax credit” under Obama's tax plan. In fact, Obama proposes “a tax cut of $500 for workers or $1,000 for working couples” who pay payroll taxes. As Media Matters for America has noted, in 2008, American workers who are not self-employed are required to pay 6.2 percent of all of their wages up to a cap of $102,000, and 1.45 percent of their wages for Medicare under the Federal Insurance Contributions Act (FICA). Those who are self-employed are required to pay 12.4 percent of their wages up to the cap for Social Security and 2.9 percent of their wages for Medicare.

Additionally, people in the United States are required to pay federal excise taxes. For instance, everyone who buys gasoline in the United States pays 18.4 cents per gallon of gasoline in federal excise taxes.

From the AP article:

With stock markets diving, unemployment rising and Indiana alone losing 4,500 jobs in September, Obama argued that the country cannot afford a President McCain who “thinks the economic policies of George W. Bush are just right for America.”

“He made kind of a strange argument that the best way to stop companies from shipping jobs overseas is to give more tax cuts to companies that are shipping jobs overseas,” Obama said of his opponent. “More tax cuts for job outsourcers. That's what Sen. McCain proposed as his answer to outsourcing.”

Over recent days, McCain has kept up a drumbeat of criticisms of Obama's tax plans. He's said the Democrat would hand out “welfare” because even people who pay no taxes would receive a $500 tax credit. He also has said Obama's entire plan amounts to socialistic tax redistribution policies.

Though Obama has appeared to gain an edge in the race for the White House amid the economic turmoil, some polls show McCain could be gaining ground with his aggressive message.