Chris Wallace Confronts John McCain On Tax Flip-Flop (VIDEO)

WASHINGTON -- "Fox News Sunday" host Chris Wallace confronted Sen. John McCain (R-Ariz.) on Sunday for flip-flopping on tax cuts for the rich.

Wallace asked McCain whether he would oppose higher income tax rates as part of a deal with Democrats to avert the so-called "fiscal cliff" -- the moment at the end of the year when tax hikes and spending cuts are scheduled to take effect, with potentially negative consequences for the economy.

"I would be very much opposed to raising tax rates," McCain said. "But I do believe we can close a lot of loopholes ... Things like a limit on the amount of deduction of charitable giving. A limit on the amount you can take on your home loan mortgage deduction."

Democrats want the top marginal tax rate to go from the current 35 percent back to its Clinton-era level of nearly 40 percent on incomes above $250,000. Wallace noted that early in the 2000s, McCain voted against the Bush tax cuts because they didn't benefit the middle class. He has since changed his position, garnering a "Full Flop" award from PolitiFact .

"You said too many of the benefits go to the wealthy, not to the middle class," Wallace said. "But, if you could get a solid deal, with, as you call for, spending cuts and entitlement reform ... why is the 35 percent top tax rate which you opposed sacred?"

"Because every economist that I respect says if you raise tax rates at this time, in fact, the president even said that a couple of years ago, it harms the economy," McCain said. "We are trying to help the economy. And, so, unless I can be convinced that raising tax rates will be beneficial, then obviously I think there's reason and ground for my position. But, I also believe that we can and must get an agreement, otherwise I think first of all, the markets are going to start reacting."

The notion that increasing the top marginal tax rate would hurt the economy is more controversial among economists than McCain suggests. McCain himself listened to different economists in 2003.

"Most of the economists view this as primarily benefiting wealthier Americans," McCain said of the Bush tax cuts at the time . "There's a theory, I think, that's prevalent -- it was true in the 2001 tax cuts -- that if you give it to the wealthy people, then they will then, you know, create jobs, et cetera. The interesting thing to me is that most economists will tell you that it's the middle-income Americans that have been keeping the economy afloat."