Fox's Bolling Clings To Economic Falsehoods

››› ››› REMINGTON SHEPARD

Fox Business host Eric Bolling claimed that nearly half of American households do not pay "a dime in tax" and suggested that tax cuts have had nothing to do with the current fiscal situation. In fact, while the bottom 50 percent of wage earners pay little federal income tax, they still pay payroll and sales taxes, and the Bush-era tax cuts have largely contributed to the current deficit.

Bolling: Nearly Half Of All Americans Do Not Pay Taxes

Bolling Claims That "43 Percent Of American Households" Do Not "Pay A Dime In Tax." On the August 9 edition of Fox News' Fox & Friends, guest co-host Eric Bolling, in a discussion with guest and author Rick Ferri, claimed: "I didn't want the money being spent. I didn't want 43 percent of American households not to pay a dime in tax." From the broadcast:

BOLLING: But get this, our next guest says he's taking credit for the downgrade himself. Why? Rick Ferri is a financial advisor and author of the book The Power of Passive Investing. He's with us from San Antonio to explain. OK sir -- your fault? The credit downgrade is your fault?

FERRI: It is my fault, and it is your fault, and it is all the viewers' fault, and it is the voters' fault. We're the one who put these people in power. But besides that, we're the one who got the benefit from it. We're the ones who spent the $15 trillion. It went to us. It didn't just disappear. It went to us. We spent it, and we did nothing about it. It is our fault that this is occurring.

BOLLING: Hey wait a minute, mister. I didn't spend that money. I had no part in spending it. It's not my fault --

FERRI: Oh, yes, you did.

BOLLING: I didn't want the money being spent. I didn't want 43 percent of American households not to pay a dime in tax! How are you blaming me? [Fox News, Fox & Friends, 8/9/11, via Media Matters]

While Nearly Half Of U.S. Households Pay No Federal Income Taxes, Most Pay Other Taxes

Tax Policy Center: 47 Percent Of U.S. Households Will Pay No Federal Income Tax This Year. In a June 2009 report, the Tax Policy Center (TPC) stated that "[e]arlier this year, [President] Obama signed into law the American Recovery and Reinvestment Tax Act of 2009 (P.L. 111-5), which, among other things, temporarily put into place some of the refundable credits proposed during the campaign. TPC estimates that under the new law, 47 percent of tax units will owe no income tax in 2009." [Tax Policy Center, 6/29/09]

AP: "[V]ast Majority Of People Who Escape Federal Income Taxes Still Pay Other Taxes." The Associated Press cited that TPC statistic in an article, noting that "their incomes were too low, or they qualified for enough credits, deductions and exemptions to eliminate their liability." The AP further wrote that "[t]he vast majority of people who escape federal income taxes still pay other taxes, including federal payroll taxes that fund Social Security and Medicare, and excise taxes on gasoline, aviation, alcohol and cigarettes. Many also pay state or local taxes on sales, income and property." [AP, 4/7/10]

Bolling Suggests That Tax Cuts Have Nothing To Do With Current Fiscal Situation

Bolling: "Clearly The Tea Party Is For Smaller Government, Reducing Taxes, Not The Things That Are Causing The Downgrade." On the August 9 edition of Fox News' Fox & Friends, Bolling stated during an interview with Sen. Mike Lee (R-UT) that "reducing taxes" is not one of the things "causing the downgrade." [Fox News, Fox & Friends, 8/9/11]

But Experts Agree That Bush Tax Cuts Added To Deficit

CBPP: "[V]irtually The Entire Deficit Over The Next Ten Years" Due To Bush Policies, Economic Downturn. The Center on Budget and Policy Priorities (CBPP) published an analysis of federal deficits in December 2009, which was most recently updated on June 28, 2010, titled, "Critics Still Wrong on What's Driving Deficits in Coming Years: Economic Downturn, Financial Rescues, and Bush-Era Policies Drive the Numbers." The report noted:

Some critics continue to assert that President George W. Bush's policies bear little responsibility for the deficits the nation faces over the coming decade -- that, instead, the new policies of President Barack Obama and the 111th Congress are to blame. Most recently, a Heritage Foundation paper downplayed the role of Bush-era policies (for more on that paper, see p. 4). Nevertheless, the fact remains: Together with the economic downturn, the Bush tax cuts and the wars in Afghanistan and Iraq explain virtually the entire deficit over the next ten years.

[...]

Just two policies dating from the Bush Administration -- tax cuts and the wars in Iraq and Afghanistan -- accounted for over $500 billion of the deficit in 2009 and will account for almost $7 trillion in deficits in 2009 through 2019, including the associated debt-service costs.

[...]

These impacts easily dwarf the stimulus and financial rescues. Furthermore, unlike those temporary costs, these inherited policies (especially the tax cuts and the drug benefit) do not fade away as the economy recovers.

The report also featured the following graphic:

CBPP chart

[CBPP, 6/28/10]

Brookings' William Gale: "The Deficits We Face Over The Next Decade Reflect A Fundamental Imbalance Between Spending And Revenue, One That Goes Beyond Entitlements." In an August 1, 2010, article titled, "Five Myths about the Bush Tax Cuts," William G. Gale, a senior fellow at the Brookings Institution, explained that "[t]he deficits we face over the next decade reflect a fundamental imbalance between spending and revenue, one that goes beyond entitlements."

One theory holds that the country's long-term budget shortfall is "just" an entitlements problem, the result of rising costs associated with growing Social Security rolls and increased health-care spending (via Medicare and Medicaid). Republicans like this idea because it plays down tax increases as a potential solution. Democrats like it because it makes the recent health-care package seem like even more of a triumph.

But it just isn't true. The deficits we face over the next decade reflect a fundamental imbalance between spending and revenue, one that goes beyond entitlements. Based on projections by the CBO, Alan Auerbach of the University of California at Berkeley and myself, among others, even if the economy returns to full employment by 2014 and stays there for the rest of the decade, the continuation of current fiscal policies, including the Bush tax cuts, would lead to a national debt in the range of 90 percent of GDP by 2020. That's already the highest rate since just after World War II -- and Medicare, Medicaid and Social Security aren't expected to hit their steepest spending increases until after 2020.

According to these same projections, the yearly deficit would rise to 6 to 7 percent of GDP by 2020. The Bush tax cuts would account for a significant chunk of this, considering that in each year they are in effect, the revenue lost because of them amounts to nearly 2 percent of GDP.

Compounding the problem: By increasing the government's debt, the tax cuts have already led to higher interest payments on that debt. [The Washington Post, 8/1/10]

Committee For A Responsible Federal Budget: Bush Tax Cuts "Will Have Cost The Treasury Well Over $2 Trillion By The End Of 2012." A June 7, 2011, report authored by the Committee for a Responsible Federal Budget explained:

Along with their extensions and expansion in 2003 [Jobs and Growth Tax Relief Reconciliation Act of 2003] and 2010, [the 2001] tax cuts will have cost the Treasury well over $2 trillion by the end of 2012 when they are scheduled to expire.

[...]

Extending all of these tax cuts beyond 2012 would cost $2.4 trillion. [Committee for a Responsible Federal Budget, 6/7/11]

Posted In
Economy
Network/Outlet
Fox News Channel
Person
Eric Bolling
Show/Publication
FOX & Friends
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