Fox's Smith falsely suggested Obama stimulus plan will "cut taxes on people who don't pay taxes"
SUMMARY: Fox News' Shepard Smith falsely suggested that a $500 individual tax credit, reportedly included in President-elect Barack Obama's proposed economic recovery plan, would benefit people who don't currently pay taxes, asking, "I know we don't know the details yet, but $300 billion in tax cuts -- how do you cut taxes on people who don't pay taxes?" In fact, all American workers are required to pay taxes on their wages for Social Security and Medicare under the Federal Insurance Contributions Act.
Revisiting the common myth from the presidential campaign that President-elect Barack Obama's proposed tax cuts would go to "people who don't pay taxes," Fox News Studio B host Shepard Smith falsely suggested that a $500 individual tax credit, included in Obama's proposed economic recovery plan, would benefit people who don't currently pay taxes. During the January 6 edition of Studio B, Smith asked Sen. John Ensign (R-NV): "Senator, the president-elect wants a big economic stimulus package ready to sign as soon as he take office. It's somewhere in the neighborhood of $800 billion over two years, $300 billion of that in what we're being told is middle class and business tax cuts. Senator, I know we don't know the details yet, but $300 billion in tax cuts -- how do you cut taxes on people who don't pay taxes?" In fact, all American workers are required to pay Social Security and Medicare taxes under the Federal Insurance Contributions Act (FICA).
A January 4 New York Times article reported that Obama's proposal includes tax cuts of "about $270 billion to $310 billion" to individuals and businesses. The article continued:
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.
From the January 6 edition of Fox News' Studio B With Shepard Smith:
ENSIGN: At least make sure that you get all of the things that are -- the issues that are out there. Whether they're court issues, whether they're challenged-ballot issues, make sure that they're settled in a way that it doesn't seem like one side or the other stole the election. That's really important in cases like this because people turned out in record numbers in Minnesota. That's a really good thing.
SMITH: They did indeed.
ENSIGN: You don't want to discourage people from turning out because they felt like the race was stolen one way or the other.
SMITH: Senator, the president-elect wants a big economic stimulus package ready to sign as soon as he take office. It's somewhere in the neighborhood of $800 billion over two years, $300 billion of that in what we're being told is middle class and business tax cuts. Senator, I know we don't know the details yet, but $300 billion in tax cuts -- how do you cut taxes on people who don't pay taxes?
ENSIGN: Well, that is one of the discussions that's going to be had up here on Capitol Hill. What they want to do is give tax credits. It's basically like a welfare payment because it's up above and beyond whatever taxes that they pay right now. The business tax credits and some of the things they're talking about there, those are important things, because if businesses don't have money, a lot of these businesses are going to go out of business.
about time you came around to your senses! ;)
Nice bit of useless snark there. Making SS into an entitlement program instead of the pseudo-investment/insurance style program it is now is a perfect way to make it easier to kill in the future. The main problems with Social Security are that its funding has been irreversibly mixed in with the rest of the government budget (because it's more fun to mock the word "lockbox" than it is to try and create one) and the unforseen population fluctuations from the baby boom on.
Too bad we didn't just go with that private account concept a few years ago, then the problem would have been solved by the complete elimination of the funds for everybody. Yeah, that would have been a great idea.
If it's an insurance/investment program, is it really a tax?
Perfect example here of why it's so dangerous for a few right-wing corporations to control the media...
Fox thinks this tack may be an effective approach to derail Obama's stimulus package. Tax cuts are only good to the GOP if the wealthy get them.
If ordinary workers get tax cuts--it's socialism.
If it weren't for the fund being pooled into the general government budget it wouldn't be. But that bridge has been burned so it is now efeectively a tax.
Yep, that bridge was burned over 40 years ago. But when gwb proposed SS reform, the anti-reform posters here swore up and down SS and Medicare were insurance "policies". So who knows?
Oh, it's right in the article above, "Federal Insurance Contribution Act". Now I know.
THey are insurance policies- or so they were intended to be. The idea of using FICA contributions as a tax is just a liberal dodge to snokescreen the fact the so called "tax cuts" are really nothin gbut an entitlement program given to thos ewho don't pay federal taxes. When has FICA contribution rates ever been cut at the base? they aren't because there is a certain investment level that needs to be achieved to reach a payout, just like any annuity program.
And (big and here) people who are self employed pay DOUBLE what the guy who works for someone else does, since the matching contribution from the employer is made up by the so "self employment" tax.
I really can't believe that people on the left who claim such "superior intelligence" in their elitist ways can actually swallow this as a tax cut. It's just more obvious kool-aid effect. I bet you all have posters on your wall with pictures of Obama, Reid, and Pelosi that say "I WANT TO BELIEVE"...
"The idea of using FICA contributions as a tax is just a liberal dodge to snokescreen the fact the so called "tax cuts" are really nothin gbut an entitlement program given to thos ewho don't pay federal taxes."
That is a lie. While it is true that certain people don't end up paying any FEDERAL INCOME TAXES, the do in fact pay federal taxes. What you guys always seem to conviently forget in this debate is that in reality most of the "taxes" are shouldered by the middle class. It is the middle class who are the "consumers" in this society. It is them who pay most of the sales, city, state, and local taxes. But that doesn't matter to you guys. All you seem to know is "Federal Income Taxes." Yet what you don't EVER alk about is how the distribution of taxes is essentially equally divided when you count payroll taxes in the mix. The Tax Policy Center, run by the Urban Institute and the Brookins Institution, recently studied payroll and income taxes paid by each income group. The richest 1% pay 27.5% of the combined burden. The bottom 20% pay only .4%, and the rest of us pay 70% of the combined tax burden in this country. As for the bottom 20%, the disparity exists because the bottom quintile who have jobs, get reimbursed for some or all of their 15% payroll tax through the Earned Income Credit, which incidentally was created by none other than Ronald Reagan who called the EITC ""the best anti-poverty, the best pro-family, the best job creation measure to come out of Congress." Given your standards and the standards of many conservatives during the most recent election I guess that makes Ronald Reagan a damned Socialist....right?
Oh, SNAP!
I'm not a fan of MissDee, but I hope she's OK after that beat down.
"If it's an insurance/investment program, is it really a tax?"
actually, they're more like insurance premiums, paid by both employee and employer, in equal amounts/rates. SS is an etitlement program, assuming you meet the minimum requirements for vesting, just like most other pension programs. the difference is that it's not a pension in the purest sense, it is the minimum safety net, to keep eligible parties from being completely indigent in their old age.
as such, it is set up so that excess revenues are invested in the least risky securities: special gov't bonds, sold only to the SS trust fund.
the best part of mr. smith's comments is that, even though he admits he hasn't got all the details yet, he'll not be stopped from blathering on stupidly about it.
"as such, it is set up so that excess revenues are invested in the least risky securities: special gov't bonds, sold only to the SS trust fund."
This is what I don't understand. The solution to the SS problem seems to be obvious--just increase the interest rate paid on these "special" bonds. I mean, the treasury (govt) sells them to SS (govt), no market is involved, so why can't the govt set the return at say 20% or more so everyone gets a good retirement?
Maybe I should run for office?
HI! I'm the good shepard and I know oodles and oodles about the economy! Stay tuned for my next scathing report on Hussein's devious plots!
You gotta admit, though, that it shows that the Repugnantcons can indeed be against tax cuts--at least when the cuts go to the middle class. Wasn't it St. Leona of Helmsley who famously said that "only the little people pay taxes?" It must be part of the Repugnantcon Creed...
This is another bit of the political shell game by MMFA.
SS and Medicare are supposed to be set asides, different from the general revenues of Federal Income Taxes.
The part of the 300 billion $ that goes to the bottom 50% or so of Americans who pay little or no income tax is very plainly socialist wealth redistribution.
Our government is hastening the collapse of the United States by handing out money is does not have.
Let me amend that last sentence. It should say "... by handing out large sums of money it does not have".
And I'm looking forward to getting every penny coming my way (at your expense, of course!).
"SS and Medicare are supposed to be set asides, different from the general revenues of Federal Income Taxes."
In a more perfect world, yes, but...
Last year alone, $190 billion in payroll tax receipts was diverted to general fund use, paying for everything from Iraq to the salaries of park rangers.
As of 2007, a total of $2.25 trillion of payroll tax money paid into the Social Security and Medicare trust funds had been diverted to general fund use and replaced with government IOUs.
The part of the 300 billion $ that goes to the bottom 50% or so of Americans who pay little or no income tax is very plainly socialist wealth redistribution.
What do you call the part of it that goes to the top 50%?
What do you call the part of it that goes to the top 50%?
Probably "the will of God"...
Well, after two hundred years of the government funnelling money from the poor and the middle class to the rich, it's about time, isn't it?
Oh I forgot- when the government bends over backwards to protect predatory wealth, that's just "good economic sense." When it moves to give the working class a slice of the pie, it's "socialist wealth redistribution." Whatever.
That's why they feel doubly cheated. To them, each dollar is considered 1 vote, so the people with the most money get to choose who runs the country. Take their money away is like stripping votes from their greedy little paws.
You are quite the comedian or liar, which is it?
That's exactly what he's emplying.