Fox News anchors, contributors falsely assert, repeatedly, that Obama's tax credit plan gives money to people who don't pay taxes

››› ››› ANDREW WALZER

In recent days, Fox News anchors and contributors have falsely asserted, repeatedly, that people who don't pay taxes would be eligible for a $500 individual tax credit included in President-elect Barack Obama's proposed economic recovery plan, echoing an oft-repeated myth from the presidential campaign that Obama's proposed tax cuts would go to people who don't pay taxes. In fact, Obama has proposed a tax credit for working Americans, meaning they do pay Social Security and Medicare taxes.

In recent days, Fox News anchors and contributors have falsely asserted, repeatedly, that people who don't pay taxes would be eligible for a $500 individual tax credit included in President-elect Barack Obama's proposed economic recovery plan. In fact, Obama has proposed giving the tax credit to "working families," which means they pay Social Security and Medicare taxes under the Federal Insurance Contributions Act. Additionally, The New York Times reported in a January 4 article that Obama's proposals "include about $300 billion in tax cuts for workers and businesses."

Media Matters for America previously documented that on January 6, Fox News anchor Shepard Smith falsely claimed that Obama's proposed tax cuts would go to "people who don't pay taxes." Since then, Fox News Washington deputy managing editor Bill Sammon, Fox News anchors Megyn Kelly, Trace Gallagher, and Gretchen Carlson, and Fox News contributor Cheryl Casone have promulgated the falsehood, which echoes the often-repeated myth from the 2008 presidential campaign that Obama's proposed tax cuts would go to people who don't pay taxes.

In a January 8 speech, Obama stated that his proposed tax credit will go to working Americans, saying, "To get people spending again, 95% of working families will receive a $1,000 tax cut -- the first stage of a middle-class tax cut that I promised during the campaign and will include in our next budget." The January 4 Times article reported that Obama's proposals "include about $300 billion in tax cuts for workers and businesses." The article later stated:

About half of that would go to workers under what Mr. Obama during his campaign called the Making Work Pay credit, worth up to $500 for individuals and $1,000 for families. The Obama campaign estimated that about 150 million Americans making less than $200,000 would qualify, including those who make too little to pay federal income taxes but would receive a check that would offset Social Security and Medicare payroll taxes.

Indeed, the "Making Work Pay" tax credit Obama included in his economic proposal during the presidential race would provide a "tax credit of up to $500 per person, or $1,000 per working family":

This refundable income tax credit will provide direct relief to American families who face the regressive payroll tax system. It will offset the payroll tax on the first $8,100 of their earnings while still preserving the important principle of a dedicated revenue source for Social Security. The "Making Work Pay" tax credit will completely eliminate income taxes for 10 million Americans. The tax credit will also provide relief to self-employed small business owners who struggle to pay both the employee and employer portion of the payroll tax. The "Making Work Pay" tax credit offsets some of this selfemployment tax as well.

Additionally, consumers in the United States are required to pay federal excise taxes, including 18.4 cents per gallon of gasoline. U.S. residents are also subject to state taxes, such as sales, income, and property taxes.

  • Bill Sammon

During the January 9 edition of America's Newsroom, Sammon said of Obama's proposal: "[S]ome of it is giving $500 checks to people who don't pay taxes. That's obviously not a tax cut. That's a spending program. Republicans don't like that aspect of it. They think it's too much of a spending program."

  • Megyn Kelly, Cheryl Casone

During the January 8 edition of America's Newsroom, Kelly falsely claimed of Obama's proposed tax credit: "They're not all tax cuts, however, because some people who don't pay taxes are going to get money." Kelly later said to Casone, "[L]et me ask you about these tax cuts. Are they really tax cuts, or are they -- or is it welfare for some people?" Casone responded: "Well you're talking about the low-income earners. There has been estimates that it could be about $500 for those low-income folks. So that has been floated out there already as these discussions are ongoing." When Kelly interjected, "[B]ut explain why that's controversial," Casone replied, "That is controversial because of many low-income earners do not pay taxes, as you mentioned, but they still will be getting checks in the mail -- that rebate."

  • Trace Gallagher

During the January 8 edition of The Live Desk, while discussing Obama's proposal with Rep. Scott Garrett (R-NJ), Gallagher asked: "Are these really tax cuts, or are these -- is this actually just more welfare spending?" Gallagher added, "If you're giving people money who didn't pay into the tax system, that becomes a different ballgame altogether." Garrett responded: "It's a totally different ballgame, because what it is, is a redistribution of wealth."

  • Gretchen Carlson

During the January 9 edition of Fox & Friends, after co-host Steve Doocy said of Obama's proposal, "[T]here's also the component where, you know, they're going to give $500 checks or $1,000 checks to couples," Carlson interjected: "And a handout to others who don't even pay taxes."

From the January 9 edition of Fox News' America's Newsroom:

BILL HEMMER (co-host): I just want to get to the second idea about the stimulus package. When these Democratic senators met yesterday on Capitol Hill, they came out of that Finance Committee meeting saying we don't like this idea about giving tax credits to companies. That's a nonstarter for us. So, now you're starting to see the wall of opposition, not just from Republicans but from significant Democrats, before you're even sworn in.

SAMMON: Well, that's -- you just hit on it. It's the wall of opposition from both sides on the issue of taxes. Because if you look at this, he's saying 300 billion of my stimulus package is going to be tax cuts. He uses the phrase "tax cuts." I don't think all of that really is a tax cut. I mean, some of it is giving $500 checks to people who don't pay taxes. That's obviously not a tax cut. That's a spending program. Republicans don't like that aspect of it. They think it's too much of a spending program.

From the January 9 edition of Fox News' Fox & Friends:

CARLSON: I want to ask you quickly, Congressman, about the taxes with regard to this $1 trillion plan, because yesterday we did this story about how the IRS is going to give people breaks now, and yet, you're -- we're going to spend $1 trillion on this stimulus package. Who's going to pay for all of this?

REP. ERIC CANTOR (R-VA): Well, that's exactly right. If you look at it, if it is a trillion-dollar spending package, and the president-elect said he is going to create 3 million jobs, that's about $330,000 per job. I don't think that's a good return --

DOOCY: Yeah.

CANTOR: -- on investment.

DOOCY: Yeah. Congressman, here's a newsflash to the Democrats who are going to be ushering this through Congress. Weren't they the same people who complained that George Bush was spending way too much money on stuff and how the Democrats are on the verge of calling for, one estimate is $1.3 trillion worth of stuff, and we don't even know for sure that it's going to work.

CANTOR: Absolutely right. And you know what? I actually met with the president-elect several days ago, and I told him the best thing you could do, I believe, to try and get a bill passed, is to post online everything that you are going to do and that you're going to spend the taxpayers' money on. Let the American people see this. We've got to see the details, and I think the worst thing that we could do, again is go borrow money from foreign investors, paying an inflated interest rate to pay for government waste, because, at the end, as you suggest, who's paying for this? You know, the -- our children and our grandchildren are going to pay for this.

DOOCY: Yeah. Plus, there's also the component where, you know, they're going to give $500 checks or $1,000 checks to couples and -- it was --

CARLSON: And a handout to others who don't even pay taxes.

DOOCY: And one of the congressmen, or rather, one of the senators from the Dakotas said, you know, we did that a year or two ago and that did nothing. That didn't help anything.

From the January 8 edition of Fox News' The Live Desk:

GALLAGHER: Congressman, now that you've heard the speech, your reaction?

GARRETT: Well, I realize that President Obama is in a really difficult situation. Look, he is inheriting from [Senate Majority Leader] Harry Reid [D-NV] and [House Speaker] Nancy Pelosi [D-CA] -- they have given him a $1.2 trillion deficit that he's going into office with. So, obviously, they have left him truly a difficult situation. The question is: What do you do about? Parts of his speech were encouraging. The spending side, not so much.

GALLAGHER: Yeah. The spending side, the question is: Spending on what? I mean, we have these programs, these kind of outlying programs, Congressman, but we have no idea if the first stimulus for the banks and the automakers are going to work. How do we gauge if this is going to work?

GARRETT: That's a great question. How do you measure success in a situation like this? Take the job aspect of it. He wants to save or create 3 million new jobs. And I think he said 80 percent of them are private, 20 percent of those are going to be public. So that's 600,000 new federal --

GALLAGHER: Right.

GARRETT: -- make-work type jobs -- an absurd number. And how do you actually gauge whether you actually created a job?

On the other side of the equation, you have to look at the spending aspects. How much of that, of those things, actually create jobs? If you give somebody an unemployment check -- well, maybe we need to do that -- but does that create a job? If you give somebody $500, or $700, or $1,000, does that really create a job? Maybe it helps them out temporarily, but it's not -- it's certainly not long-term. And so, you really have to say, "What's the problem?" The problem is higher unemployment. What's the solution? New jobs, private-sector jobs, is really what we should be focusing on, not more public sector jobs.

GALLAGHER: And then it goes back to this whole thing: Are these really tax cuts, or are these -- is this actually just more welfare spending? If you're giving people money --

GARRETT: Oh, yeah.

GALLAGHER: -- who didn't pay into the tax system, that becomes a different ballgame altogether.

GARRETT: It's a totally different ballgame, because what it is, is a redistribution of wealth.

From the January 8 edition of Fox News' America's Newsroom:

KELLY: Stu, let me -- let me ask you, though, is there a decent argument that this might actually work -- that it might actually create jobs and could actually get us out of this economic crisis?

STUART VARNEY (Fox News contributor): Well, there's a certain degree of money that's gonna hit the road running as of right now if there are immediate checks in the mail to very low-income earners. That money is stimulative, and it starts very, very soon. But it's not a very large portion of the trillion-dollar spending package.

There is a danger here, Megyn, that we follow the Japanese example. When their bubble burst in the 1980s and 1990s, they spent big time on infrastructure -- got nowhere. They had a 10-year recession, virtually. A lost decade. And there is some concern that America may follow exactly the same path. And by the way, Megyn, the number after a trillion is a quadrillion.

KELLY: I don't even want to hear that. Don't -- let's not even get there -- that's a thousand trillions. OK, Jenna Lee, let me ask you -- Cheryl mentions tax cuts. That's one of the sweeteners that Barack Obama has been using to sort of, you know, get people interested in this stimulus plan, saying, hey, look, there's $300 billion worth of tax cuts. They're not all tax cuts, however, because some people who don't pay taxes are gonna get money.

JENNA LEE (Fox Business Network anchor): Well, it's interesting, Megyn. We still don't know the details of that, of those type of tax cuts, or even the tax rebates that could be on the table, which would be money in the pockets of consumers. The devil is in the detail for this, and we still don't know a lot of details about this plan.

One of the things that Mr. Obama's going to say today is he's going to say, listen, a trillion dollars or so could be wiped from our economy over the year. That would be about $12,000 per -- for a person, family, household, which seems like a lot of money. But if you think about $1,000 coming back to you as a family, it comes to about $83 a month. Will that keep you in your home? We haven't heard a lot about the housing plan. And will that make you go out and shop and help boost the economy? Again, we really don't know these -- these details, and these are gonna be very fundamental, very important to whether or not this plan works.

KELLY: And maybe he'll spell some of those out.

CASONE: Megyn, I think about --

KELLY: But Cheryl, let me ask you about these tax cuts.

CASONE: Sure.

KELLY: Are they really tax cuts, or are they -- or is it welfare for some people?

CASONE: Well, you're talking about the low-income earners. There has been estimates that it could be about $500 for those low-income folks. So that actually has been floated out there already as these discussions are ongoing.

KELLY: And -- but explain why that's controversial.

CASONE: That is controversial because of many low-income earners do not pay taxes, as you mentioned, but they still will be getting checks in the mail -- that rebate. Now, remember, last time we had stimulus -- stimulus one earlier in '08, most of that money went into savings accounts. They did not go out and spend money. They put it into their savings account.

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