He said: "Senator Obama's plan to raise taxes on some in order to give checks to others isn't a tax cut; it's just another government giveaway."
On this claim, McCain has a point, CBS News correspondent Wyatt Andrews reports.
Obama has proposed four new refundable tax credits, which are different from tax cuts or deductions. The refundable designation means that millions of taxpayers who don't normally owe income taxes would get refund checks from the government.
But here's where the McCain campaign stretches the facts.
"Now is not the time to experiment as socialism," Alaska Gov. Sarah Palin said at an October rally.
To Palin, Obama's plans reeks of socialism - a McCain Web ad calls it welfare.
The welfare claim is false.
To get Obama's new refund checks, most taxpayers would have to have a job, a home mortgage, or save $1,000 a year. It is not the old concept of "money for nothing."
"Welfare has these connotations of someone who is poor who is just sitting at home, who's not working," said Bill Adair of Politifact.com. "And the Obama plan actually rewards people who are working."
It's also ironic for McCain to attack Obama for proposing refundable tax credits. It's exactly how McCain funds his health care plan.
McCain would pay for his tax credit by taxing the richest Americas with the most expensive health insurance plans. In other words - both candidates are funding some of their biggest promises with Robin Hood economics.