During an interview with Obama adviser David Plouffe, Wallace cited the conservative Tax Foundation to suggest that the rich are already paying enough in taxes. And Wallace repeatedly cut Plouffe off, scoffed at his arguments, and even accused Plouffe of not telling the truth when Plouffe attempted to point to statistics showing that many millionaires are paying a lower tax rate than the average middle-class household.
Wallace began discussing the topic of Obama's tax proposal by saying that "according to the non-partisan Tax Foundation, the 1 percent of households with the highest incomes pay 38 percent of federal income taxes. The top 10 percent pay 70 percent of federal income taxes. Meanwhile, 46 percent of households pay no federal income tax at all." Wallace then sarcastically asked: "And the president thinks the wealthy aren't paying their fair share?"
(The Tax Foundation, by the way, is a conservative think tank: It has Republicans and Republican advisers on its board of directors; it has received hundreds of thousands of dollars from the Koch brothers; and Nobel Prize winning economist Paul Krugman has said it "is not a reliable source.")
When Plouffe tried to point out that "22,000 millionaires pay" less than 15 percent of their income in taxes -- which is a lower tax rate than that paid by the average middle class household, Wallace repeatedly cut him off, telling Plouffe that what he was saying was "not true" and suggesting that Plouffe was "manipulat[ing] the numbers."
In fact, according to Gene Sperling, director of Obama's National Economic Council, "a full 22,000 households making more than $1 million annually paid less than 15 percent of their income in taxes in 2009, according to analysis of the IRS 2009 Statistics of Income file by the Treasury Department's Office of Tax Analysis."
And that's not all.
According to IRS data, 131 of the richest 400 households -- i.e., about one-third of that group -- had an effective tax rate of less than 15 percent in 2008. Thirty of those households paid 10 percent or less in taxes. The same data showed that each of those 400 households made at least $109 million in 2008.
According to Chuck Marr, director of Federal Tax Policy at the Center on Budget and Policy Priorities, "millionaires who receive one-third to two-thirds of their income" from capital gains and qualified dividends pay a lower effective tax rate than people with incomes between $50,000 and $75,000 "who receive most of their income from their paychecks." Those households "pay 14.9 percent of their income in federal income and payroll taxes." From Marr's blog post:
The President has called on Congress, as part of comprehensive tax reform, to make sure that no American making more than $1 million a year pays at a lower rate than middle-income families.
People with incomes between $50,000 and $75,000 who receive most of their income from their paychecks (as middle-class people generally do) pay 14.9 percent of their income in federal income and payroll taxes, according to TPC. This "effective tax rate" is higher than the comparable rate faced by people with incomes over $1 million who receive more than a third of their income from capital gains and qualified dividends.
Millionaires who receive one-third to two-thirds of their income from these preferential sources face a 14.6 percent rate. Millionaires who derive more than two-thirds of their income from these sources face a 12.0 percent rate (see graph).
The gap in effective tax rates between millionaires and middle-income people is even bigger if you also count state and local taxes, which tend to be regressive.
Furtheremore, as the Center for American Progress pointed out, the same data that conservatives are using to attack Obama's tax plan also show that "1,470 households reported income of more than $1 million in 2009 but paid zero federal income tax on it."
But none of this seemed to matter to Wallace. He was busy trying to argue that the rich pay enough using statistics compiled by a conservative organization he mislabeled as "non-partisan." And any facts that stood in the way of his arguments were dismissed out of hand.
This is what passes for straight news at Fox.