Fact Checking The Sunday Shows - October 31, 2010
Republicans' appearances on the Sunday shows this Halloween were as predictable as any mediocre horror movie, with the lone "twist" coming from Sen. John Cornyn (R-TX) on ABC's This Week. Cornyn lied about President Obama's stump speech, claiming that Obama wants to make Republicans "sit in the back of the bus." That's a Glenn Beck-inspired race-baiting twist on Obama's months-old metaphor about Republicans wanting the keys to the car after they drove it into a ditch, and Cornyn should know better. Meanwhile on CNN, Michael Steele pretended that Republicans are principled deficit hawks, despite turning surpluses into trillions in debt under President Bush. On Face the Nation, Minnesota Gov. Tim Pawlenty claimed that higher taxes on the wealthy would neuter the nascent economic recovery despite overwhelming evidence that the rich don't spend more when we give them tax breaks. Most predictable of all, Sarah Palin told Fox News Sunday viewers three different lies about taxes in just a few short paragraphs.
CLAIM: Sen. John Cornyn (R-TX) Repeated Glenn Beck-Inspired Lie About President Obama's Stump Speech
Sen. JOHN CORNYN (R-TX): Well President Obama himself said, Republicans can come along for the ride but they have to sit in the back of the bus.
FACT: No, President Obama Did NOT Say Anything About "The Back Of The Bus"
On the campaign trail, President Obama and other Democrats often use an extended metaphor about government as a car, and elections deciding who drives and who sits in the back seat. The phrase "back of the bus" has clear racial overtones, and despite the fact that Obama has used the car metaphor for months without mentioning any buses, Glenn Beck and Fox News claimed last week that Obama was attempting to stir up racial divides.
President Obama In Philadelphia: Republicans "Don't Know How To Drive. They Can Ride With Us If They Want To, But They Got To Get In The Back Seat." In a stump speech in Philadelphia, President Obama said:
Many of the Republicans who are running right now, these are the exact same folks who spent the last decade driving our economy into a ditch. And once we were elected, Joe and I, we put on our boots, we went down into that ditch. It was muddy and dusty down there and it was hot. And we started pushing on that car to get it out of the ditch. And we had a whole bunch of folks like Joe Sestak helping us push that car out of the ditch. (Applause.)
And every once in a while, we'd look up at the Republicans. They were -- they had driven into the ditch, but they had gotten out and they were kind of taking a break, fanning themselves and sipping on a Slurpee, watching us do all the work. And every once in a while they'd say, why don't you push harder? You're not pushing the right way, Obama. But they didn't help.
And after pushing and pushing over these last 20 months, finally we've got that car out of the ditch. (Applause.) Now, the car is a little dented up. The fender is a little busted. It needs a tune-up. But it's moving. It's pointing in the right direction. We're on level ground now. We're starting to make repairs. And suddenly we get a tap on our shoulder and we look back and who is it? It's the Republicans. And they say -- what are they saying? -- they say, we want the keys back.
THE PRESIDENT: Philadelphia, they can't have the keys back. They don't know how to drive. (Applause.) They don't know how to drive. They can ride with us if they want, but they got to get in the back seat. (Applause.) Because we want to go forward. We don't want the special interests riding shotgun. We want working families, middle-class families, up front. They're our priority. [President Obama Remarks, 10/10/10 via WhiteHouse.gov; emphasis added]
President Obama In Rhode Island: Since They Drove Us Into Ditch, Republicans "Can Come For The Ride, But They Gotta Sit In The Back." In a stump speech in Providence, Rhode Island last week, President Obama said:
Look, I've been using this analogy as I travel the country. Imagine the Republicans driving the economy into a ditch. And it's a deep ditch. It's a big ditch. And somehow they walked away from the accident, and we put on our boots and we rappelled down into the ditch -- me and Jack and Sheldon and Jim and Patrick. We've been pushing, pushing, trying to get that car out of the ditch.
And meanwhile, the Republicans are standing there, sipping on a Slurpee. (Laughter.) Fanning themselves. We're hot and sweaty and pushing, and they're kicking dirt into the ditch. (Laughter.) Getting it into our faces. But that's okay. We said -- every once in a while we'd ask them, "Do you want to come down and help?" They'd say, "No, but you're not pushing the right way, though. Push harder."
Finally, we get this car out of the ditch, and it's banged up. It needs some body work, needs a tune-up. But it's pointing in the right direction. The engine is turning and it's ready to go. And we suddenly get this tap on our shoulders. We look back, who is it? The Republicans. And they're saying, "Excuse me, we want the keys back." You can't have the keys back. You don't know how to drive! (Applause.) You can't have them back. Can't do it. (Applause.) Not after we've worked this hard.
We can't have special interests sitting shotgun. (Laughter.) You know, we got to have middle-class families up in front. (Applause.) We can't -- we don't mind the Republicans joining us. They can come for the ride, but they got to sit in back. (Laughter.)
Look, these two years have been incredibly difficult. And not every decision we've made has always been popular, but they've been the right things to do because you sent me there -- you sent me there not to do what was easy but do what was right. That's why you sent me there. (Applause.)
And because of the steps we've taken, we no longer face the possibility of a second depression. The economy is growing again. [President Obama Remarks, 10/25/10 via WhiteHouse.gov; emphasis added]
President Obama In Minneapolis: Republicans "Got To Sit In The Back Seat. We're Going To Put Middle-Class America In The Front Seat." In a speech in Minneapolis, President Obama said:
I know that Al Franken talked to you a little bit about the analogy of a car being driven into the ditch -- although I guess Al embellished it a little bit. He said there were alligators down there -- (laughter) -- I didn't see the alligators. But it is true the car went into the ditch. (Laughter.) And it is true that me and Al and Amy and Mark and others, we had to climb down into the ditch. And it is hot down there and dirty.
And we've been pushing that car, pushing it, pushing it, pushing it. The whole time the Republicans have been standing on the sidelines. (Laughter.) They've been looking down, fanning themselves, sipping on a Slurpee. (Laughter.) Kicking dirt down into the ditch. Kicking dirt in our faces. But we kept on pushing. (Applause.)
Finally we got this car up on level ground. And, yes, it's a little beat up. It needs to go to the body shop. It's got some dents; it needs a tune-up. But it's pointing in the right direction. And now we've got the Republicans tapping us on the shoulder, saying, we want the keys back.
You can't have the keys back. You don't know how to drive. (Applause.) You can ride with us if you want, but you got to sit in the backseat. (Laughter.) We're going to put middle-class America in the front seat. We're looking out for them. (Applause.)
I mean, you have noticed, when you want to go forward, what do you do with your car? You put it in "D." If you want to go backwards, what do you do? You put it in "R." (Laughter and applause.) I don't want to go backwards. I'm going forwards, with all of you. (Applause.)
Minnesota, because of the steps we've taken, we no longer face the possibility of a second depression. The economy is growing again. We've seen nine straight months of private sector job growth. But we've still got a long way to go. [President Obama Remarks, 10/23/10 via WhiteHouse.gov; emphasis added]
State of the Union
CLAIM: RNC Chairman Michael Steele Claimed That A Refusal To Create Debt Is Among "The Principles" The GOP Has "Stood For For A Long Time"
MICHAEL STEELE: When we talk about not compromising, not compromising away on the principles that our party [cough] excuse me, have, have run on, uh, and have stood for for a long time. For example, we're not gonna compromise on creating more debt.
FACT: "Principles?" The GOP Knows Plenty About Creating Debt — They Exploded The Deficit Under President Bush
Before Obama Took Office, The FY 2009 Deficit Was Projected At $1.2 Trillion. As reported by the Washington Times: "The Congressional Budget Office announced a projected fiscal 2009 deficit of $1.2 trillion even if Congress doesn't enact any new programs. [...] About the only person who was silent on the deficit projection was Mr. Bush, who took office facing a surplus but who saw spending balloon and the country notch the highest deficits on record." [Washington Times, 1/8/09, emphasis added]
CBPP: Deficit Grew By $3 TRILLION Because Of Policies Passed From 2001 To 2007. According to the Center on Budget and Policy Priorities: "Congressional Budget Office data show that the tax cuts have been the single largest contributor to the reemergence of substantial budget deficits in recent years. Legislation enacted since 2001 added about $3.0 trillion to deficits between 2001 and 2007, with nearly half of this deterioration in the budget due to the tax cuts (about a third was due to increases in security spending, and about a sixth to increases in domestic spending)." [CBPP.org, accessed 1/31/10, parentheses original]
Public And Foreign-Held Debt Skyrocketed While Bush Was In Office. Below are two graphs prepared by the Speaker's office showing the increase of publicly and foreign-held debt during the years Bush was in office:
[U.S. Treasury via The Gavel, 6/11/10]
Face the Nation
CLAIM: Gov. Tim Pawlenty (R-MN) Claimed That Ending Bush-Era Tax Cuts For The Rich Would Hurt The Economy
Gov. TIM PAWLENTY: If you don't extend those Bush tax cuts, all of 'em, it's gonna send a very negative signal to the economy, it's gonna be counterproductive.
FACT: Cutting Taxes For The Wealthy Does Little To Stimulate The Economy
Bloomberg News: "Give The Wealthiest Americans A Tax Cut And History Suggests They Will Save The Money Rather Than Spend It." According to Bloomberg News: "Give the wealthiest Americans a tax cut and history suggests they will save the money rather than spend it. Tax cuts in 2001 and 2003 under President George W. Bush were followed by increases in the saving rate among the rich, according to data from Moody's Analytics Inc. When taxes were raised under Bill Clinton, the saving rate fell. The findings may weaken arguments by Republicans and some Democrats in Congress who say allowing the Bush-era tax cuts for the wealthiest Americans to lapse will prompt them to reduce their spending, harming the economy. President Barack Obama wants to extend the cuts for individuals earning less than $200,000 and couples earning less than $250,000 while ending them for those who earn more." [Bloomberg News, 9/14/10]
New York Times: "Research Suggests That Tax Cuts... Have Limited Ability To Bolster The Flagging Economy." According to the New York Times: "The concept of lower taxes is so appealing to voters that many embrace them as an economic cure-all. But economic research suggests that tax cuts, though difficult for politicians to resist in election season, have limited ability to bolster the flagging economy because they are essentially a supply-side remedy for a problem caused by lack of demand. The nonpartisan Congressional Budget Office this year analyzed the short-term effects of 11 policy options and found that extending the tax cuts would be the least effective way to spur the economy and reduce unemployment. The report added that tax cuts for high earners would have the smallest 'bang for the buck,' because wealthy Americans were more likely to save their money than spend it." [New York Times, 9/11/10]
CBO: Among Eleven Proposals To Spur Economic Growth, Cutting Income Taxes Ranks Last. Below is a chart created by the Congressional Budget Office to show the "cumulative effects of policy options on employment in 2010 and 2011":
[Congressional Budget Office, 2/23/10]
Fox News Sunday
CHRIS WALLACE (host): In England, the conservative government has just announced a new austerity package, uh, spending cuts and tax increases, three-to-one, spending cuts over tax increases, because they're trying to get both sides to, to buy into it. Would you accept something like that, with massive spending cuts but also some tax increases, if that's what you need to address the national debt, which you're concerned about, and to fix entitlements?
SARAH PALIN: No, we don't have to compromise on that because the premise there is false, that you have to increase taxes in order to balance a budget. The first thing they need to look at is the spending cuts and the hiring freezes and the zero-base budgeting. Those principles, those practices that they haven't even begun to, um, incorporate yet in order to start balancing budgets. It's, it's, um, a false premise there to believe that we have to increase taxes on the American people to balance out the budgets when we haven't done the things that just make a whole lotta common sense first in cutting budgets. Y'have, y'know, look at the, the Laffer curve, look at the, um, the other studies that have shown that, uh, increased revenue is not necessarily derived from increased taxes, because that's gonna lessen productivity in this nation.
FACT: Expert Consensus, Even Among Conservatives, Is That Tax Cuts Do Not Pay For Themselves
Time: "If There's One Thing That Economists Agree On, It's That These Claims Are False." According to Time: "If there's one thing that Republican politicians agree on, it's that slashing taxes brings the government more money... If there's one thing that economists agree on, it's that these claims are false. We're not talking just ivory-tower lefties. Virtually every economics Ph.D. who has worked in a prominent role in the Bush Administration acknowledges that the tax cuts enacted during the past six years have not paid for themselves--and were never intended to. Harvard professor Greg Mankiw, chairman of Bush's Council of Economic Advisers from 2003 to 2005, even devotes a section of his best-selling economics textbook to debunking the claim that tax cuts increase revenues." [Time, 12/6/07, emphasis added]
2006: Bush's Chief Economic Adviser Conceded Tax Cuts Do Not Pay For Themselves. In testimony to the Senate Budget Committee, Council of Economic Advisers Chairman Edward Lazear testified: "Will the tax cuts pay for themselves? As a general rule, we do not think tax cuts pay for themselves. Certainly, the data presented above do not support this claim." [Senate Budget Committee Hearing, 9/28/06, via WhiteHouse.Archive.gov]
American Enterprise Institute (AEI) Economist: "There's No Evidence" That Bush Tax Cuts "Come Anywhere Close" To Paying For Themselves. In 2006, the Washington Post asked former Bush economist and AEI Resident Scholar Alan Viard if the Bush tax cuts paid for themselves: "Economists said Bush was claiming credit where little is due. The economy has grown and tax receipts have risen at historic rates over the past two years, but the Bush tax cuts played a small role in that process, they said, and cost the Treasury more in lost taxes than it gained from the resulting economic stimulus. 'Federal revenue is lower today than it would have been without the tax cuts. There's really no dispute among economists about that,' said Alan D. Viard, a former Bush White House economist now at the nonpartisan American Enterprise Institute. 'It's logically possible' that a tax cut could spur sufficient economic growth to pay for itself, Viard said. 'But there's no evidence that these tax cuts would come anywhere close to that.'" [Washington Post, 10/17/06, emphasis added]
Wall Street Journal: Bush Tax Cuts Return Less Than 10% Of Their Cost In Added Tax Revenue From Economic Growth. In a 2006 editorial, the Wall Street Journal wrote: "The congressional Joint Committee on Taxation, using conventional analyses, says making the president's tax cuts permanent would reduce federal revenues in 2016 by $314 billion. That is more than 10 times what the Treasury analysis suggests tax cuts would generate by prompting more hours of work, more savings and investment and more efficient use of resources." [Wall Street Journal, 7/11/06]
FactCheck.org: "Highly Misleading" To Say Tax Cuts Increase Revenues. According to FactCheck.org: "Republican presidential candidate Sen. John McCain has said that the major tax cuts passed in 2001 and 2003 have 'increased revenues.' He also said that tax cuts in general increase revenues. That's highly misleading. In fact, the last half-dozen years have shown us that we can't have both lower taxes and fatter government coffers. The Congressional Budget Office, the Treasury Department, the Joint Committee on Taxation, the White House's Council of Economic Advisers and a former Bush administration economist all say that tax cuts lead to revenues that are lower than they otherwise would have been - even if they spur some economic growth. And federal revenues actually declined at the beginning of this decade before rebounding." [FactCheck.org, 6/11/07; emphasis added]
- Nonpartisan Joint Committee On Taxation: Bush Tax Cuts Reduced Revenues By Hundreds Of Billions Of Dollars. According to FactCheck.org:
The Joint Committee on Taxation estimated that the 2001 tax legislation (the Economic Growth and Tax Relief Reconciliation Act) would cause government revenues to be 107.7 billion less than they would have been in the absence of the legislation in 2004, 107.4 billion less in 2005 and 135.2 billion less in 2006. The committee's estimates for the effect of the Jobs and Growth Tax Relief Reconciliation Act of 2003 were that it would reduce otherwise projected revenues by 148.7 billion in 2004, 82.2 billion in 2005 and 20.7 billion in 2006. The JCT makes its comparisons against the Congressional Budget Office's receipts baselines. [FactCheck.org, 6/11/07]
Architect Of Bush Tax Cuts: Tax Cuts Without Budget Offsets Are Really "Future Taxes." According to Bloomberg: "You won't find a truer believer in the big tax cuts of the George W. Bush era than Glenn Hubbard, the 51-year-old economist who is dean of Columbia Business School. The Republican academic was instrumental in designing the tax cuts, first as a Bush campaign insider and then as the president's first chief economic adviser. The idea behind the cuts, enacted in 2001 and 2003, was to encourage work, savings, and investment, thus stimulating long-term economic growth. Hubbard is especially proud of the 2003 cut in taxes on dividends and capital gains, which he calls 'the most pro- growth tax reform that anybody did since Kennedy.' Now that the Bush tax cuts are up for renewal -- they expire on Dec. 31 unless Congress acts -- Hubbard has a queasy feeling about them, Bloomberg Businessweek reports in its Aug. 8 issue. The cuts, he says, have been undermined by years of deficits. Until the trajectory of spending changes, he says, 'deficits are just future taxes. You're just talking about taxes today vs. taxes tomorrow.'" [Bloomberg.com, 8/5/10, emphasis added]
Harvard Economist: Chief Republican Arguments For Cutting Taxes Are "Both Wrong." In a paper titled "Snake-Oil Tax Cuts," Harvard professor Jeffery Frankel wrote:
For years, the Republican approach to economic policy has pretty much boiled down to this message: The right response to all problems is cutting taxes. To bolster this message, they rely heavily on two arguments. On the one hand, they say, cutting taxes will increase tax revenues by generating economic growth, thus raising tax revenue and building a surplus. (This is known as the Laffer Hypthesis). On the other hand, Republicans claim, tax cuts are good because they create deficits and force the government to shrink itself. (A colloquial term for this is Starve the Beast).
The arguments are not only mutually exclusive - the weight of the economic evidence also shows that they're both wrong. The habit of Republican policymakers to invoke each of them at different points in time (or before different audiences) is politically convenient but logically dishonest. It smacks of a particularly desperate defense attorney arguing both that "my client didn't have a gun" (Laffer) and "he shot in self-defense" (Starve the Beast).
Neither proposition accurately describes US economic history, nor provides a sound basis for future economic policy. That is, choosing either proposition would harm the long-term health of the US economy.
["Snake-Oil Tax Cuts," 9/8/08, via Harvard.edu, emphasis added]
Ezra Klein: "In The Real World, Tax Cuts And Spending Increases Have The Exact Same Affect On The Budget Deficit." According to the Washington Post's Ezra Klein: "What's remarkable about Kyl's position here is that it appears to be philosophical. 'You should never have to offset cost of a deliberate decision to reduce tax rates on Americans,' he said. Never! This is much crazier than anything you hear from Democrats. Imagine if some Democrat -- and a member of the Senate Democratic leadership, no less -- said that as a matter of principle, spending should never be offset. He'd be laughed out of the room. Back in the real world, tax cuts and spending increases have the exact same affect on the budget deficit." [Washington Post, 7/12/10]
FACT: Far From Paying For Themselves, The Bush Tax Cuts Created Massive Deficits
The Bush Tax Cuts Are The Primary Driver Of Federal Budget Deficits Over The Next Decade. Below is a chart from CBPP showing the deficit impacts of war spending, financial recovery spending, the recession itself, and the Bush tax cuts:
CLAIM: Sarah Palin Falsely Claimed Bush Tax Cuts Will Expire Because Congress Didn't Vote On Them Before Recess
SARAH PALIN: If we were to increase taxes, which is what will happen because Pelosi and Reid skipped town before allowing Congress to even take a vote on extending the tax cuts from '01 and '03, if those tax cuts are going to, uh, expire, we're going to see an increased tax, uh, on January first, that's a disincentive for production and for industry and for people getting out there and working in this country, for the job creators to be able to expand and hire more people. So no, it's not a, a given, that um, uh, allowing those tax increases to, to come forth, um, that's not a guarantee that the economy's gonna get back on the right track.
FACT: Democrats "Determined To Act" On Tax Cuts When Congress Resumes
Congress Resumes Session On November 15. According to records of House proceedings, at 1:04 AM on September 29, 2010, "[t]he House adjourned pursuant to H. Con. Res. 321. The next meeting is scheduled for 2:00 p.m. on November 15, 2010." [Clerk.House.gov, accessed 10/7/10]
Axelrod: Democrats Determined To Act On Tax Cuts Before January Expiration. From the Washington Post:
The White House and congressional Democrats conceded Sunday that they will probably wait until after the Nov. 2 elections to vote on a plan to prevent tax rates from rising next year for the vast majority of Americans.
"I doubt that we will" stage a vote before adjourning next week, House Majority Leader Steny H. Hoyer (D-Md.) said. Speaking on the Sunday talk shows, he and White House senior adviser David Axelrod added that Democrats are nonetheless determined to act before the tax cuts expire in January. [Washington Post, 9/26/10]
Washington Post: "Both Parties Expect The Tax Cuts Will Be Extended." From the Washington Post:
Republicans would not compromise on any of the issues over the past two weeks and attacked Democrats for ending the session without voting on the tax cuts. House Republicans even tried to block the formal resolution that allows the chamber to adjourn, leading to an unusual 210-209 vote in which 39 Democrats joined nearly all the Republicans in opposition.
Tax rates will increase next year if Congress does not address the issue, although both parties expect the tax cuts to be extended when members return after the elections. [Washington Post, 9/30/10]
FACT: Democrats Have Consistently Called For Extending 97 Percent Of Bush Tax Cuts
PolitiFact: Dems Consistently Say Only Tax Cuts For Wealthiest Will Be Allowed To Expire. According to the non-partisan PolitiFact.com, in their analysis of an allegation from Rep. Mike Pence that Democrats want all tax brackets to rise:
Do Democrats want every tax bracket to rise, as Pence suggests? In a word, no.
For many months, Democratic officials have consistently said that they intend to let only the tax cuts for the wealthiest individuals lapse. The cutoff they usually suggest is $200,000 for individuals and $250,000 for married couples filing jointly. President Obama campaigned on just such a plan, and we've logged those promises into our Obameter campaign promises database.
Pence is right that every tax bracket will go up if the law is not extended. Still, we think the claim that Democrats don't want to extend the law is inaccurate. While the legislative drafting is still in process, the Democratic majority in Congress has made clear that it plans to extend tax cuts for all but the top couple percentage points of the income distribution. So it's highly misleading for him to say that Democrats actually want to see all the bill's cuts expire. Indeed, Pence's comment verges on a scare tactic. [PolitiFact.com, 7/22/10, emphasis original]
Reuters: "Two To Three Percent Of Americans" Are Affected By Democrats' Proposals. According to Reuters: "Lawmakers are mulling the renewal of tax cuts enacted in 2001 and 2003 under former president George W. Bush that expire at the end of this year. President Barack Obama and his Democratic allies in Congress want to extend the lower rates for individuals earning less than $200,000 or couples making less than $250,000. About two to three percent of Americans fit into the upper income categories." [Reuters, 7/21/10]
President Obama's FY2011 Budget Calls For Extending Bush Tax Cuts For Families Making Less Than $250,000 Per Year. As Market Watch reported in February: "Facing a gaping deficit but aiming to spur job creation at the same time, President Barack Obama's fiscal year 2011 budget would hit top earners, oil companies and others while giving tax breaks to small businesses to help them hire new workers. ... Obama wants tax breaks proposed by President George W. Bush to expire this year. His budget would eliminate tax breaks on those making more than $250,000 a year, a move almost certain to be opposed by Republicans and perhaps some Democrats as the economy crawls out of the recession. 'We extend middle-class tax cuts in this budget,' Obama said Monday at the White House, but 'we will not continue costly tax cuts for oil companies, investment fund managers, and those making over $250,000 a year. We just can't afford it.'" [Market Watch, 2/1/10]
Speaker Pelosi: High-End Tax Cuts Should End. According to The Hill: "House Speaker Nancy Pelosi (D-Calif.) on Thursday rejected extending tax cuts for the wealthiest tax bracket that are set to expire at the end of the year. Pelosi took off the table a short-term extension of those cuts floated by some lawmakers in her own party. 'No,' the speaker said at her weekly press conference when asked if the cuts for the highest bracket should be extended. 'Our position has been that we support middle-class tax cuts. ... I believe the high-end tax cuts did not create any jobs, increased the deficit and should be repealed,' she said." [The Hill, 7/22/10, emphasis added]
Treasury Secretary Geithner: We Will Extend Middle- And Lower-Income Provisions Of Bush Tax Cuts. According to the Wall Street Journal: "The Obama administration will allow tax cuts for the wealthiest Americans to expire on schedule, Treasury Secretary Timothy Geithner said Thursday, setting up a clash with Republicans and a small but vocal group of Democrats who want to delay the looming tax increases. Mr. Geithner said the White House would allow taxes on top earners to increase in 2011 as part of an effort to bring down the U.S. budget deficit. He said the White House plans to extend expiring tax cuts for middle- and lower-income Americans, and expects to undertake a broader revision of the tax code next year. 'We believe it is appropriate to let those tax cuts that go to the most fortunate expire,' Mr. Geithner said at a breakfast with reporters." [Wall Street Journal, 7/23/10, emphasis added]
New York Times: Obama Plan Leaves Much Of The Bush Tax Cuts In Place. The New York Times prepared an infographic showing where President Obama seeks to change Bush-era tax law, and where he intends to leave it unchanged:
[New York Times, 7/25/10]
CHRIS WALLACE (host): So no tax increases, no how.
SARAH PALIN: No. No! And that's what the American public is saying, and that's what tea party-Americans are rising up and saying, we're taxed enough already. That's the point.
FACT: "Taxed Enough Already?" Palin And Tea Party Should Realize Taxes Are Historically Low
Bruce Bartlett: "Taxes Are Very Considerably Lower By Every Measure Since Obama Became President." In a March Forbes column, Bruce Bartlett, a former economic adviser to Presidents Reagan and H. W. Bush, wrote:
For an antitax group, they don't know much about taxes.
In short, no matter how one slices the data, the Tea Party crowd appears to believe that federal taxes are very considerably higher than they actually are, whether referring to total taxes as a share of GDP or in terms of the taxes paid by a typical family.
Tea Partyers also seem to have a very distorted view of the direction of federal taxes. They were asked whether they are higher, lower or the same as when Barack Obama was inaugurated last year. More than two-thirds thought that taxes are higher today, and only 4% thought they were lower; the rest said they are the same.
As noted earlier, federal taxes are very considerably lower by every measure since Obama became president. And given the economic circumstances, it's hard to imagine that a tax increase would have been enacted last year. In fact, 40% of Obama's stimulus package involved tax cuts. These include the Making Work Pay Credit, which reduces federal taxes for all taxpayers with incomes below $75,000 by between $400 and $800. [Forbes, 3/19/10; emphasis added]
The Recovery Act Distributed Nearly $300 Billion In Tax Relief To Families And Businesses. According to PolitiFact.com: "Nearly a third of the cost of the stimulus, $288 billion, comes via tax breaks to individuals and businesses. The tax cuts include a refundable credit of up to $400 per individual and $800 for married couples; a temporary increase of the earned income tax credit for disadvantaged families; and an extension of a program that allows businesses to recover the costs of capital expenditures faster than usual. The tax cuts aren't so much spending as money the government won't get -- so it can stay in the economy. Of that $288 billion, the stimulus has resulted in $119 billion worth of tax breaks so far." [PolitiFact.com, 2/17/10]
Tax Policy Center Co-Director: With Taxes At 60-Year Low, "The Rise Of The Tea Party...Is Really Hard To Understand." As reported by CBSNews.com: "Meanwhile, taxes are at their lowest levels in 60 years, according to William Gale, co-director of the Tax Policy Center and director of the Retirement Security Project at the Brookings Institution. 'The relation between what is said in the tax debate and what is true about tax policy is often quite tenuous,' Gale told Hotsheet. 'The rise of the Tea Party at at time when taxes are literally at their lowest in decades is really hard to understand.' [CBSNews.com, 4/15/10; emphasis added]
GOP Rep. McHenry: "Marginal Tax Rates Are The Lowest They've Been In Generations, And All We Can Talk About Is Tax Cuts." As reported by Time Magazine, North Carolina Republican Patrick McHenry said: "Marginal tax rates are the lowest they've been in generations, and all we can talk about is tax cuts... The people's desires have changed, but we're still stuck in our old issue set." [Time Magazine, 5/7/09]
Actual Tax Burdens Are Much Lower Than Many Tea Party Activists Realize. In a March Forbes column, Bruce Bartlett, a former economic adviser to Presidents Reagan and H. W. Bush, wrote:
Tea Partyers were asked how much the federal government gets in taxes as a percentage of the gross domestic product. According to Congressional Budget Office data, acceptable answers would be 6.4%, which is the percentage for federal income taxes; 12.7%, which would be for both income taxes and Social Security payroll taxes; or 14.8%, which would represent all federal taxes as a share of GDP in 2009...
Tuesday's Tea Party crowd, however, thought that federal taxes were almost three times as high as they actually are. The average response was 42% of GDP and the median 40%. The highest figure recorded in all of American history was half those figures: 20.9% at the peak of World War II in 1944.
To follow up, Tea Partyers were asked how much they think a typical family making $50,000 per year pays in federal income taxes. The average response was $12,710, the median $10,000. In percentage terms this means a tax burden of between 20% and 25% of income.
Of course, it's hard to know what any particular individual or family pays in taxes, but according to IRS tax tables, a single person with $50,000 in taxable income last year would owe $8,694 in federal income taxes, and a married couple filing jointly would owe $6,669. [Forbes, 3/19/10; emphasis added]
Top Tax Brackets Over Time: