WASHINGTON — Republican John McCain accused Democrat Barack Obama on Tuesday of backing measures that would increase both the costs and the taxes paid by small business, and he told a group of owners, "The federal government shouldn't make your work any harder."
"Unfortunately, Senator Obama has a habit of talking down the value of our exports and trade agreements. He even proposed a unilateral re-negotiation of NAFTA — our agreement with Canada and Mexico that accounts for 33 percent of American exports," McCain said.
He added that under Obama's tax plan, "Americans of every background would see their taxes rise — seniors, parents, small business owners, and just about everyone who has even a modest investment in the market. He proposes to eliminate the Social Security earnings cap, and thereby to increase the tax on employers."
In an appearance before the National Federation of Independent Business, he also said Obama wants to eliminate the secret ballot for union votes, and to raise the minimum wage as inflation rises, "which is a sure way to add to your costs and to slow the creation of new jobs."
Obama, who criticized McCain over his economic proposals on Monday, said his rival's remarks were misleading.
Speaking to reporters in St. Louis, he said he would eliminate the capital gains tax "for the small businesses and start-ups that are the backbone of our economy." His income tax plans, Obama said, would cut taxes for 95 percent of U.S. workers, while rolling back the Bush administration's tax reductions for the highest-earning 5 percent.
McCain "wants to add $300 billion more in tax breaks and loopholes for big corporations and for the wealthiest Americans, and he hasn't even explained how he'd pay for it," Obama said.
Economic issues have taken center stage in the presidential race, with many Americans staggered by gasoline prices exceeding $4 a gallon.
McCain said small businesses would bear the brunt of Obama's proposed tax increases. He called for phasing out the alternative minimum tax and allowing businesses to write off some new investments.
"I don't want to send any more of your earnings to the government," the Arizona senator said.
McCain has been shoring up his anti-tax credentials, pushing to extend President Bush's tax cuts, which are set to expire beginning in 2010. Some party conservatives remain suspicious of McCain because he originally opposed the Bush tax cuts, arguing the cuts favored the wealthy and that there should be no tax cuts until the Iraq war costs were known. Now he argues that allowing the tax cuts to expire would amount to raising taxes, which he opposes.
McCain, who has admitted the economy is not his strong point, joked to the small business group: "I have never run a small, struggling enterprise — unless you count my presidential campaign last year."
McCain, who was introduced by former eBay Inc. CEO Meg Whitman, was briefly interrupted by three protesters who yelled that war is bad for small business. The protesters were booed and escorted from the room, and McCain used the interruptions to call for civil debate in the campaign.
Obama, who spoke with reporters after touring a St. Louis hospital, differs with McCain on how best to control health care costs. McCain would eliminate the tax subsidy for employer-based insurance and give individuals a tax break to offset the cost of buying their own insurance.
"I believe that the best way to help small businesses and employers afford health care is not to increase government control of health care but to bring the rising cost of care under control and give people the option of having personal, portable health insurance," McCain told the NFIB group. Workers would be able to keep their insurance "even when they move or change jobs," he said.
Obama said the McCain plan would help only the wealthy.
"He's offering a tax cut that won't ensure that health care is affordable for hardworking families who need help most," Obama said. "And his plan could actually put your coverage at risk by undermining the employer-based system that most Americans depend on."