In Red-States, Obama Rebuts McCain on Tax Plan

Obama was set Thursday to campaign in yet another state that voted Republican in 2004 to argue again that it is he, not GOP rival John McCain, who would provide more new tax relief to middle-class families.

(AP Photo/Alex Brandon)

INDIANAPOLIS (AP) -- Democrat Barack Obama, showing some concern about his Republican rival's constant criticism that his tax plan would redistribute wealth, is devoting more of his standard campaign speech to a point-by-point rebuttal of those arguments.

Obama was set Thursday to campaign in yet another state that voted Republican in 2004 to argue again that it is he, not GOP rival John McCain, who would provide more new tax relief to middle-class families. After a morning rally here, Obama was to head to Hawaii to visit his ill grandmother.

As he sought votes Wednesday in Richmond, Va., Obama said the difference between the two plans is "who he wants to give tax cuts to and who I want to give tax cuts to."

"My opponent doesn't want you to know this, but under my plan, tax rates will actually be less than they were under Ronald Reagan," he said.

Obama's performance as the financial crisis intensified looks to be giving him an edge in the race for the White House. But the competition is still volatile and, though polls vary, McCain appears to be gaining some traction with his anti-tax message.

An Associated Press-GfK poll shows McCain and Obama essentially even among likely voters, possible evidence of a tightened race 12 days before the Nov. 4 election. The poll found Obama at 44 percent and McCain at 43 percent, statistically insignificant and a change from a similar survey three weeks earlier that found Obama with a 7-point lead.

McCain has said Obama's plan is "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.

Obama notes that his plan would reverse cuts passed during the Bush administration for the wealthiest taxpayers and use the revenue to cut taxes for people earning less than $250,000 a year. Obama says that means a tax cut for 95 percent of taxpayers. McCain wants to extend all the Bush-era tax cuts, including those for wealthier Americans, and says allowing any to expire would amount to a tax increase.

In an interview aired Thursday on CBS' "The Early Show," Obama said talk of socialism and "palling around with terrorists," as McCain's campaign has charged, represents "the kinds of stuff that I can't imagine saying about an opponent of mine."

Indiana, which has 11 electoral votes, is normally a solidly Republican state that hasn't backed a Democrat for president since 1964. But polls show a tight race between McCain and Obama.

After the rally, Obama was scheduled to fly to Hawaii to spend time with his ailing grandmother, 85-year-old Madelyn Payne Dunham, who helped raise him. Dunham was recently released from the hospital and was said to be gravely ill after breaking a hip.

Obama was to spend Thursday night and most of Friday with her before resuming campaigning Saturday in Nevada.

Obama said the decision to go to Hawaii was easy to make, telling CBS that he "got there too late" when his mother died of ovarian cancer in 1995 at age 53, and wants now to make sure "that I don't make the same mistake twice."

"My grandmother's the last one left," he said.

Of his mother's death, he said: "It was sort of like this, in the sense that she had a terminal illness. We knew she wasn't doing well, but you know, the diagnosis was such that we thought we had a little more time, and we didn't."

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