CBS advances falsehood that Obama's stimulus plan gives "tax refunds for people who don't pay taxes"
Please upgrade your flash player. The video for this item requires a newer version of Flash Player. If you are unable to install flash you can download a QuickTime version of the video.
SUMMARY: Discussing President Obama's meeting with congressional leaders to discuss the economic stimulus plan, CBS' Chip Reid reported that "when Republicans criticized tax refunds for people who don't pay taxes, sources in the meeting say the president said, quote, 'I won,' referring to the election and making it clear he's sticking with that part of the plan." In fact, Obama has not proposed giving tax refunds to "people who don't pay taxes"; he has proposed giving the tax credit to "working families," which means they pay Social Security and Medicare taxes.
On the January 23 broadcast of the CBS Evening News, chief White House correspondent Chip Reid advanced the falsehood that President Obama's stimulus plan gives "tax refunds for people who don't pay taxes." Discussing Obama's meeting with congressional leaders to discuss the economic stimulus plan, Reid reported that "when Republicans criticized tax refunds for people who don't pay taxes, sources in the meeting say the president said, quote, 'I won,' referring to the election and making it clear he's sticking with that part of the plan." In fact, Obama has not proposed giving tax refunds to "people who don't pay taxes"; he 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."
As Media Matters for America has noted, 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."
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 self employment 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 23 broadcast of the CBS Evening News with Katie Couric:
REID: At his first White House meeting with congressional leaders, the president stressed the importance of bipartisan support for his economic stimulus plan, while acknowledging there's still a lot of work to do.
OBAMA: I recognize that there are still some differences around the table, and between the administration and members of Congress about particular details on the plan.
REID: Everyone at the meeting agreed on the need for quick action.
SEN. MITCH McCONNELL (R-KY): I do think we'll be able to meet the president's deadline for getting the package to him by mid-February.
REID: But some Republicans complained that the $825 billion plan has far too much in spending and far too little in tax cuts.
REP. JOHN BOEHNER (R-OH): Lowering tax rates and allowing people to keep more of what they earn will allow them to spend that money, invest that money, or save it. All of which are good for the economy.
REID: The president told Republicans he's open to the possibility of more tax cuts for small business, but when Republicans criticized tax refunds for people who don't pay taxes, sources in the meeting say the president said, quote, "I won," referring to the election and making clear he's sticking with that part of the plan.
Meanwhile, the president overturned yet another Bush administration policy today by executive order, this one on abortion, ending the ban on federal funding for international organizations that perform the procedure or do abortion counseling.
Way to go...Chip. Yessir, you sure do carry on the Bush agenda.
{Apologies all around...still "installing" the new system}
First Chip "mouths" about the President being open to tax cuts for small business, then he abruptly Segways [sic] into—his pimp's talking points: tax refunds for those who don't pay[?] and finally slides into the final kabosh..."sources in the meeting said"...yah sure Chip. Here's a Milk Bone for ya! Thus struck homme, did Ohio's representative Mr. Boehner.
On Hannity's Radio Show on Thursday, Dick Morris claimed that under Obama's plan 57% of Americans will not pay any taxes at all but get dole outs so it is proof that we are turning into a Socialist country.
He did not cite any references though.
On Hannity's Radio Show on Thursday, Dick Morris claimed that under Obama's plan 57% of Americans will not pay any taxes at all but get dole outs so it is proof that we are turning into a Socialist country.
I wonder if the Toe-Sucker would be willing to accept the fact that everyone pays taxes! Perhaps not income tax... but sales tax!
If a homeless man goes out and collects nickles and dimes all day and then spends that money at a liqour store for a drink or McDonalds for a burger... he is paying tax! It is virtually impossible to not pay taxes.
There are of course plenty of other taxes that those of us lucky enough to not be homeless... you have internet or a phone, you pay a tax.. etc... etc
But the point is... everyone, in every situation, pays tax!
He did not cite any references though.
I assume that like me... you are not shocked by this revelation... ??
I am not shocked but disappointed that the two of them can get away with spreading their money making talking points.
Some of you might enjoy this from the Republican National Congressional Committee:
Yup, the congressional republicans want full credit for our economy.
What economy?
Wow, $10/week sure should stimulate the Tobacco and Adult Beverage industry.
Well, no. It's not an outright falsehood, but it's a pretty underhanded tactic to link with resentment, working people of little means to a tiny margin of feckless individuals who simply refuse to work. It's classic conservative resentment politics at its finest.
And if conservatives are so concerned about people who make too little to even justify charging them an income tax, they could better spend their time emulating that last great Republican, Teddy Roosevelt, and fight for living wages for every working American.
First, Social Security and Medicare are indeed separate funds, but "all that FICA stuff" is still taxes, monies "demanded by a government for its support or for specific facilities or services, levied upon incomes, property, sales, etc." Sales taxes usually go to local governments, yes, but that doesn't mean they aren't taxes and doesn't mean that people don't pay them.
The underlying point is some people are falsely conflating "taxes" and "federal income taxes" so that those who don't pay the latter are said to pay no taxes at all. Which is absurd.
That brings up the term "falsehood." I don't think it's misused in this headline. I maintain that those who started the "pay no taxes" line did so knowing that they were being misleading - that is, they committed a falsehood. But I don't think CBS intended to be deceptive, I think it was just lazy (and therefore sloppy) journalism. Which means that while I don't think CBS committed a falsehood, it did "advance" that falsehood by repeating it without challenge or correction.
Well said Oscar. A mentor early in my career had a say that has stuck with since I first heardit - "Be careful son, torture numbers and they will tell whatever story you want told." If MMFA are truly the guardians of the truth versus falsehood - I for one would like to see some more responsible reporting or journalism on their part.
That's just not good enough, is it? The fact is this, 'refunds for people who don't pay taxes' line, is a Republican talking point. Furthermore, it simply reflects sloppy journalism to give incomplete information assuming the general public will get the drift. As you say, leaving out that one word changes the entire complexion of the story into a tale of resentment.
i just don't see much concern that we are simply spending money we do not have. not just a little, but a whole lot. it was not that long ago that the entire federal budget was a trillion dollars. now that's the deficit for the next few years. yes, we are in a bad recession, but hardly the worst we've been in since the depression. i realize that the tax cuts will be more targeted at the middle class, but this is really buying into the republican idea that tax cuts solve everything. [and they need to get over the whining they're not being listened to. you lost, folks. you are not the majority, and you did not bend over backwards to cater to the democrats when you barely controlled the senate. especially when you had a president who took office with fewer people voting for him than the other guy.]
i know we cannot have a balanced budget now. but i don't think we simply buy into the idea that everything goes on the credit card. supposedly, when clinton increased taxes on the wealthy, we were on our way to a severe recession, even depression. instead, we had the longest peacetime economic expansion in history. and reagan's tax cuts did not really reduce unemployment in any big way for awhile. it remained stubbornly high for years. there's something to be said for creating a sound economy by living within your means. if not year to year, then at least as an overall objective.
congress has been playing santa for too long. the original idea of individual retirement accounts [ira] was a good one, to get people to save so they would not just have to rely on social security. but the original tax free deduction was 2000 dollars. now, if you have a retirement plan at work, you can put 16000 a year into that, and up to 6000 in your own ira. that is really letting people avoid taxes they should otherwise be paying, money that the government needs. and the benefit is really to those who need it the least. if you can afford to stick 22000 into a retirement fund, you are doing pretty well. and there are other plans that do the same.
i was conflicted by the 700 billion dollar bank bailout. [not the auto bailout, that was needed] but i felt that maybe it was better safe than sorry. but it seems only half the money was doled out in the beginning, and a lot of what was given was just used by the banks for whatever they wanted to do. i think a lot of these things are just going to be working the excesses out of the system.
mefirst,
As a usual voice of opposition here, let me be the first to say kudos to you for this post. You are absolutely spot on. Sometimes the answer to the most complex problem is the simplest answer. We cannot spend money we don't have. It applies to each of us in our personal lives and it should apply to our government as well.
This notion that creating and spending money to try to boost our economy is insane. The economy will recover when each and everyone of us pays off our credit cards, equity loans, personal loans, car loans, student loans, etc. and begin putting money into our savings. Then, when we need (or heaven forbid) want to buy something whether it be necessity or luxury, we won't need to resort to going into debt to obtain it. That will be the day when big banks will stop abusing us, when "buy here, pay here" sharks disappear, and we can finally be spared the "bad credit, no credit, no job, no problem" car dealer commercials that promise to finance a car that we can't possibly make payments on.
We should remember that this country is US, our economy reflects OUR behaviors and OUR habits. If we want it to change, that change must come from US. Not some bailout or rescue plan, legislation or spending bill. The economy gets better when we fix it from inside our homes.
mefirst makes some good points. Since you think he is spot on, do you also agree with him that bailing out the auto industry was a good idea? I do. But if you do think the auto rescue was a good thing, how do you square that with your, "you're on your own" mantra of fixing the economy from our basements.
Not that saving is bad or that putting off purchases is bad, it's just that it was a lack of effective government, not us, that ushered in this crisis. You and I agree that coming together around common purpose, in sacrifice and responsibility, is the best way to emerge from these times. But why shouldn't we expect our government to put our money to work for us?
I have my own thoughts about all the bail-outs. I didn't 100% agree with the auto industry "rescue", but I understood it. In the long run, I still believe that it will be better if the auto companies are bought, merged, or somehow put under a new management structure. Something has to change there, we can't just shove money at them.
I believe government should put our money to work for us effectively, but as mefirst pointed out, this isn't our money, it's our deficit. That is my main concern.
i've always been a deficit hawk. i excoriated bush for deficit spending and i have to be consistent. and it is one of the things i liked most about clinton. as i said, i don't think we can go for a balanced budget now. it probably would put us into a very deep recession, but we need to get back to economic sanity. one of these times we are going to prime the pump for one more stimulus, and the well will be dry. one of the things we heard was that there would be no goodies in the package. except i saw on the news that there is now a 700 million dollar "school snacks" program being included. i don't have a problem with reduced price lunches. sometimes that is a kid's big nutritional meal for the day. but school snacks? maybe i'm wrong, but this sounds like an expensive program where most of the money is not used for the kids.
The entire globe is reeling from this financial crisis, yet we remain the safest place on the planet to park your capital because we offer such a low risk brand of investment. So eager are countries to get some that many will offer close to zero interest rates on loans. Those loans are sitting there for us and it would be foolish to pass up the opportunity to jumpstart the economy.
If you want to raise taxes, I'm up for it, I'll pay. I just don't get how paying down personal debt and saving money (while it's the responsible and necessary thing to do) will create jobs and get money back into circulation. If you could explain how socking money away creates growth, I'm all ears
Also when paying off credit card debt is invoked as a way out, it's a false comparison given that credit companies are basically usurers. Borrowing money from countries eager to lend at low interest rates is not the same as borrowing from Mastercard.
Anyway, I'm on board with mefirst's excoriation of Bush's deficit spending as Bush's ultimate aim for it was to use it for the destruction of Iraq. What we are talking about with this round of deficit spending is building a better future, a better America, not destroying a sovereign foreign nation.
It depends on how you "sock that money away". Sticking it in a mattress or even passbook savings get you, and the economy, nothing. Municipal bonds or other bonds issued for capital expansion or something of the like would help the economy plus the purchaser would get a decent return. Stock market, a little more risker, does put money in circulation directly and indirectly.
Suppose WindPower Inc offered bonds to fund expansion of wind generation capabilities in the US. Would it be a good idea to sock your money into that? Seems like it could be a win-win.
That's fine when people have steady jobs and money to spare. We don't have that right now do we?
Some don't, some do. But you're the one saying we shouldn't sock it away, so I figured you were looking for a way to stimulate the econmy personally. The government doesn't appear to have as much money as they are wanting to spend (that's something new, isn't it? Like that's only happened about 38 times in the last 40 years) and it looks like they will spend it.
Funny how on the other thread you were advocating personally spending money, yet on this one, just to be contrary you're just taking the opposite stance that I am.
Just be honest, we agree.
The entire globe is reeling from this financial crisis, yet we remain the safest place on the planet to park your capital because we offer such a low risk brand of investment. So eager are countries to get some that many will offer close to zero interest rates on loans. Those loans are sitting there for us and it would be foolish to pass up the opportunity to jumpstart the economy.
If you want to raise taxes, I'm up for it, I'll pay. I just don't get how paying down personal debt and saving money (while it's the responsible and necessary thing to do) will create jobs and get money back into circulation. If you could explain how socking money away creates growth, I'm all ears
Also when paying off credit card debt is invoked as a way out, it's a false comparison given that credit companies are basically usurers. Borrowing money from countries eager to lend at low interest rates is not the same as borrowing from Mastercard.
Anyway, I'm on board with mefirst's excoriation of Bush's deficit spending as Bush's ultimate aim for it was to use it for the destruction of Iraq. What we are talking about with this round of deficit spending is building a better future, a better America, not destroying a sovereign foreign nation.
And just to be clear, I don't buy into the "giving people a tax refund that don't pay taxes" line. I know that personal income tax is only about 38% of federal tax receipts. Yes, we all pay taxes. We pay Wal-marts corporate tax. We pay ExxonMobils tax. We pay all their taxes.
An update on tax receipts, FY2007 (latest reported):
45.3% Individual Income Taxes
33.9% SSI/Medicare/Unemployment, etc
14.4% Corporate Income taxes
2.5% Excise taxes (including Federal Gas Tax, Telephone, Cable TV, etc)
3.9% Other (which I think included Estate Taxes)
Because SSI/Medicare is quickly approaching the revenue neutral position (outgo=income), personal income taxes are by far the largest revenue stream to the US government.
Mefirst, I'm going to have to disagree somewhat with you regarding your third paragraph about Government playing Santa in regards to IRAs, 401(k)s etc. $2000/year tax deduction for retirement will hardly leave you enough to pay health insurance premiums when you retire. I understand the extra $6000/year is to allow some of us the opportunity to "catch up" if we were unable to contribute early in our careers for whatever reason. We should be doing everything we can to encourage people to save for retirement. If it takes a tax deduction to do so, so be it. Our company matches at 50% up to a certain percentage, and yet there are still employees that won't take advantage of an automatic 50% ROI. Sure it can be a struggle, but why make it harder by taxing it at both ends? I worked at a lot of relatively (compared to now) low paying jobs early in my career and didn't put enough away then (looked like enough until the late 70s, early 80s) and the same could happen in the near future, so don't "penalize" those trying not to be a burden on the system or family in their declining years.
i didn't suggest that it should only be limited to 2000 now. that was just the total that you could defer at the time. it should move up with inflation and 5000 [6000 over fifty] is reasonable for an ira. however as i pointed out, that is on top of the 16000 that you can now put into an employer plan, for a total of 22000. it used to be you could contribute to one or the other and now it's both. there are people who can't afford to put a penny into retirement and allowing others to shelter 22000 a year from tax is too much.
Sure there is a minority that is taking advantage of the rules and "hiding" as much as they can from taxes. But, I wanted to sacrifice (which I would have to do to defer 22,000/year) now, should I be "penalized" for that?
i really don't see the difference. why is it fair to call someone else "hiding" and you wanting to "sacrifice"? if you can afford to put it in it's not a sacrifice. you're getting the same tax break. and by the way, the money your employer puts in is also tax deferred, so it's even more.
Did you guys hear Boehner the other day sounding like a commercial spokesman, talking about, 'fast acting tax cuts?' These cons are idiots with their focus group tested tax panacea slogans. Utterly ridiculous. At least we see why they can't govern though. For them it's all about the easy way out and tax cuts are the easy way out, in that people are mollified by the fundamentalist certainty of tax cut gospel.
According to Boehner in this item, tax cuts will allow people to save money and that's good for the economy. Really, John? When the boost we need comes from people circulating money back into the economy, you think saving money will help? That's what happened with the last round of "stimulus" tax refunds, people saved it or paid down personal debts. Didn't do much for the economy, did it?
Sure, Boehner Republicans will talk all day about how tax cuts will allow people to invest that money. Sounds good. Except that's not what happens. Cons need to put their idealized economic models back between the covers of text books and leave them there as examples of what not to do. It's time to get people back to work making things and building things for living wages. Good wages are the best economic stimulus.
Immediately give everyone a 3 month holiday on SSI/Medicare premium payments. Shouldn't take long to see how that would affect the economy, should it? That also would let the rest of the "stimulus" plan work its way through the system (AKA Congress).
What are you talking about? Give everybody a holiday? Give everybody the opportunity to get a job is more like it. You need to get over your assumption that liberals are all about handouts with that give everybody a holiday tripe. Unlike that other political party, we're all about work, sacrifice and responsibility.
Wouldn't those $$ circulate in the economy and provide for employment opportunities. That would be personal reponsibility. Nah, lets sit back and let the "government" provide the jobs. How do you give someone an opportunity to get a job if there is not $$ in the economy to fund it? It's going to take 18-24 months for Public Works dollars to get to a point of porviding meaningful employment, especially with Congress fighting over how the $$ should be split up, planning the project, getting the prerequiste paperwork out of the way, etc. How long was it from FDRs first election until the first concrete was poured at Grand Coulee Dam?
I'll go find the answer and be back.
FDR was inaugurated in Jan 1929, first excavation at Grand Coulee was done in July 1933 (4 1/2 years). Lets get some $$ into the economy quick, A SSI/Medicare insurance premium holiday would accomplish that. Plus (at least on paper), there are surpluses in those accounts at the moment.
Oh and I checked the Help Wanted ads today. There are still jobs out there to be filled.
Don't bother sourcing or citing your numbers. Here, I'll do like you did: FDR's New Deal started having meaningful effect in 1930, just take my word for it.
I'll go check the history myself, in the meantime I'll take comfort in the fact that there are still a portion of deadenders who still believe we ought to just kick back and let the market fix it.
To the broader point, recent history shows us that these tax breaks, holidays or whatever new product slogan chosen to sell it, simply don't work. Tax cuts don't create jobs, corporations don't create jobs because they get a sweet tax deal. They just turn them into executive bonuses. So no. Your holiday idea is irresponsible because that money won't provide employment opportunities. Quite to the contrary that money should be invested in healthcare for all so we can all be freed from the shackles of for profit healthcare.
How much quicker can you get money into the system? And this could be offset by raising the ceiling on insurance premium payments to wages around $150,000-$175,000. Remember, the government doesn't have a road building, dam building, or any other direct construction department. Public works money will be going to greedy, evil corporations, who will hire illegal workers at subpar wages to fleece the taxpayer and build roads and bridges that will fail prematurely.
How does your healthcare plan put $$ to work in the economy now?? And what will keep it from being an underfunded liability in the future???
"How much quicker can you get money into the system? "
It would be nice to get this country back on track soon, but I'm not the one obsessed with getting this done quickly. I am and have been talking about the most effective way to get on our feet again and tax cuts alone ain't it... that was my beef above with the Boehner way that you felt compelled to comment upon. Anyway, you were shown to be in gross error about the pace that public investment can start the economy going again, so hang it up, Oscar.
"Public works money will be going to greedy, evil corporations, who will hire illegal workers at subpar wages to fleece the taxpayer and build roads and bridges that will fail prematurely."
Well, yeah if we let Republicans administer the operations. Not that Democrats are knights of the round table, but, I mean it is the Republican Party who has been tearing down legal protections the New Deal had in place to protect wages and prohibit shoddy work on the public dime. Given Obama's commitment to transparency, his belief in organized labor and his willingness to work from the bottom up, I think your protests are shallow. You just don't seem to get that the conservative era is done. We have finally taken the first steps into the progressive era and despite the best efforts to retain power for the GOP by that fine, fine Republican Rush Limbaugh, he gets it. Even Limbaugh knows that unless Republicans can thwart Obama's success, the GOP con game is over for a generation.
"How does your healthcare plan put $$ to work in the economy now?? "
I don't know, let's see? Suppose a family man/woman is locked into a job because their employer provides health insurance, but he/she really wants to start his/her own business, or just wants to leave a job they hate, but won't because the risk of jeopardizing their family's health is too great. Reduce the risk of failure and that will encourage entrepreneurs to put their money into play. Universal healthcare will also free us up to take advantage of personal development opportunities that, In the long run, will stimulate the economy and create a more skilled, traveled, educated, and fulfilled workforce.
"And what will keep it from being an underfunded liability in the future???"
Nothing but cynicism and a loathing of the commons. The alternative has already played itself out. We have for profit insurance companies pricing people out of their right to a healthy life.
"And this could be offset by raising the ceiling on insurance premium payments to wages around $150,000-$175,000."
I'll confess, I have no idea what this sentence means in relation to our discussion. What are you saying?
A three month "holiday" would put $$ in place immediately while the government has time to get the rest of the stimulus package planned and implemented. Raise the ceiling on SSI/Medicare cutoff to 150,000-$175,000 to recoup those SSI/Medicare $$ at the other end.
The construction bit was said with tongue firmly entrenched in cheek. Government does not have a construction arm and private enterprise will be involved. The same bureaucrats that have administered contracts for the past decades will be administring contracts in the future. I'm not talking about department heads, but about the mid level people that have been around the system for years. It will take more than the change of 12-15 cabinet heads to change the system.
Universal healthcare is going to cut costs how? Until there is reform of the system, including tort reform, until there is a change in lifestyle among the citizens, healthcare costs will remain high, unless you are proposing to limit the income of doctors, nurses, PAs, etc. Show me how the cost of healthcare, with specifics, will be below the current 15% of GNP and I'd consider the plan. Life is not without risks or cost, but there are many in this country that seem to think it is or should be.
We have tons of underfunded liability in this country, starting with government retirement plans at all levels and working through other government programs, such as Medicare and Social Security. That ain't cynicism or loathing, it is here and it is now.
I like raising the cap, I always have. That's a good idea. Sorry I didn't get what you were saying from go.
Now, onto how universal healthcare will cut costs First, one must think beyond the either/or trap, then one must think in terms of public service.
One has to break free of the either/or thinking, ie. you either limit income for medical professionals or disallow/limit people to exercise their right to protect themselves from malpractice. It is possible to recruit medical professionals who are still paying their enormous education debt and have them work for the public health service a prescribed number of years in exchange for canceling their debts. Service, Oscar. Public service.
In the short term, their are substantial tax credits that can be offered to employers who give coverage to uninsured employees. Companies that already offer a health plan could get a credit for extending the coverage. Then government could open up medicare plan for employers and individuals that would compete with private insurers while, at the same time, write laws a to limit the abuses of insurance companies (like refusing coverage for pre-existing conditions.) That would contain costs pretty quickly and would free up individuals and employers to keep more money.
oscar, fdr was inaugurated in march, 1933.
You're correct, my bad. Thanks for the correction. Relying too much on memory, which us older folks shouldn't do. If a meaningful Public Works project could be started in 6 months in current times/atmosphere, so much the better.