On Late Edition, Wolf Blitzer did not challenge Gov. Tim Pawlenty's false claim that under Sen. Barack Obama's proposal to increase the capital gains tax rate, "if you have an IRA or a 401(k), which a lot of middle Americans do, and you go to retire or, you know, use that money, you're going to pay almost double the rate in taxation." In fact, most distributions from retirement accounts are taxed as regular income, not as capital gains.
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On the June 22 edition of CNN's Late Edition, host Wolf Blitzer did not challenge a false claim by Minnesota Gov. Tim Pawlenty (R) that under Sen. Barack Obama's proposal to increase the capital gains tax rate, "if you have an IRA or a 401(k), which a lot of middle Americans do, and you go to retire or, you know, use that money, you're going to pay almost double the rate in taxation." In fact, most distributions from 401(k) and IRA accounts are taxed as regular income, not as capital gains. Additionally, Blitzer did not point out that Obama has said he would not raise the capital gains tax rate on individuals with income of less than $250,000.
Further, during an earlier discussion of Obama's proposal for Social Security, after Pawlenty claimed that Obama wants to "lift the cap on Social Security taxes," Blitzer noted that "there would be a lapse between $97,000 and 200 or $250,000." But Pawlenty went on to claim, "[W]hen you look at $97,000 of income, I think that's people who are clearly middle income or upper middle income, but that affects a lot of Americans," falsely suggesting that people earning $97,000 in income would be affected by Obama's Social Security tax reform proposal. In fact, wage earners currently pay Social Security taxes on income up to $102,000, and Obama made clear in a June 13 speech that "[a]nybody under $250,000 would not be affected whatsoever. Ninety-seven percent of Americans will see absolutely no change in their taxes under my plan."
From the June 22 edition of CNN's Late Edition with Wolf Blitzer:
BLITZER: Here's some statistics that I'm sure you're familiar with. When President Bush took office seven years ago, almost eight years ago, the national debt -- the national debt was around $5 trillion. It's now closer to $9 trillion, and it's going up.
Senator Obama says if Senator McCain has his way with the tax cuts he wants to make permanent, the Bush tax cuts which Senator McCain originally opposed, that national debt is going to skyrocket. Listen to Senator Obama.
OBAMA [video clip]: We've borrowed billions from countries like China to finance needless tax cuts for the wealthiest Americans and an unnecessary war. And yet, Senator John McCain is explicitly running to continue and expand these policies without a plan to pay for it.
BLITZER: All right. Go ahead and respond to Senator Obama.
PAWLENTY: Well, first of all, this is one more instance where the rhetoric and the reality around Senator Obama is going to be brought into to the light through this campaign.
He continues to make claims about being one way, and he has a reality and a record that's a different way. In his case, he is for dramatically increasing taxes. We don't think that's the way in the McCain campaign, and Senator McCain doesn't believe that's the way to grow the economy, particularly when people really need relief --
BLITZER: But he says he wants to do it only for those families making more than $250,000 a year. He wants to reduce taxes for the middle class, people making $50,000 or $75,000 a year.
PAWLENTY: Well, when you look at his proposals, Wolf, including lifting the cap on Social Security taxes, in terms of income levels; when you -- not addressing the AMT at all, or very fully --
BLITZER: But on the Social Security -- excuse me for interrupting -- he says it would only go into effect, increasing those Social Security withholding taxes, for people making more than $200,000 a year.
PAWLENTY: Ninety-seven thousand for an individual or so. He also wants to --
BLITZER: But there would be a lapse between $97,000 and 200 or $250,000.
PAWLENTY: Well, but when you look at $97,000 of income, I think that's people who are clearly middle income or upper middle income, but that affects a lot of Americans.
He also doesn't want to address, very clearly, the AMT, and he wants to boost capital gains taxes from 15 percent to almost double that. So if you have an IRA or a 401(k), which a lot of middle Americans do, and you go to retire or, you know, use that money, you're going to pay almost double the rate in taxation.
Senator McCain, on contrast, wants to increase the exemption for dependents from $3,500 to $7,000. He wants to make sure that we address the AMT. He wants to keep capital gains where it is now.
The other thing is, when Senator McCain talks about the economy, he talks about growing the economy, not increasing burdens. And a lot of the tax analysis that gets done about the Obama and McCain campaign plans lumps in corporate tax reductions as, you know, for the wealthy. But most tax analysts who are nonpartisan will tell you that increasing taxation on businesses is quite regressive, because they pass it on to consumers, in most instances.
BLITZER: So, let me just be precise, Governor Pawlenty. You don't have a problem with allowing the Bush tax cuts that were implemented in 2001 and 2003 being made permanent, all of the Bush tax cuts, the estate tax, plus the tax cuts for the wealthiest Americans, including billionaires?