Fox Distorts Convention Speech To Attack Obama On Taxes

Fox's Doocy: Obama's Speech Only Revealed That “He Intends To Raise Taxes On People Who Have Been Successful.” During the September 7 edition of Fox News Fox & Friends, co-host Steve Doocy claimed that Obama's convention speech lacked specificity except when it came to taxes, saying:

DOOCY: The only thing that we really know for sure is part of the president's plan is, he intends to raise taxes on people who have been successful. [Fox News, Fox & Friends, 9/7/12]

Fox: “President Blasts Support For Tax Cuts.” During the September 7 edition of Fox & Friends First, Fox News correspondent Peter Doocy narrated clips from President Obama's speech to the Democratic National Convention. Below is the on-screen text that accompanied the video:

[Fox News, Fox & Friends First, 9/7/12]

In Speech, Obama Detailed How He Has Cut Taxes For Most Americans

Obama: “I've Cut Taxes For Those Who Need It -- Middle Class Families, Small Businesses.” In his speech, Obama explained that he cut taxes for the middle class and small businesses and argued that more tax cuts for the wealthiest Americans would not spur job growth:

OBAMA: Now, I've cut taxes for those who need it -- middle-class families, small businesses. But I don't believe that another round of tax breaks for millionaires will bring good jobs to our shores or pay down our deficit. I don't believe that firing teachers or kicking students off financial aid will grow the economy, or help us compete with the scientists and engineers coming out of China. (Applause.)

After all we've been through, I don't believe that rolling back regulations on Wall Street will help the small businesswoman expand or the laid-off construction worker keep his home. 

We have been there. We've tried that and we're not going back. We are moving forward, America. (Applause.) [President Obama's speech to the Democratic National Committee, 9/6/12, via WhiteHouse.gov]

NYT: Final Stimulus Bill Included "$282 Billion In Tax Relief" Of "$789 Billion Stimulus." In a February 12, 2009, article, The New York Times detailed the tax cuts contained in the stimulus bill. From the Times:

House and Senate leaders on Wednesday struck a deal on a $789 billion economic stimulus bill after little more than 24 hours of rapid-fire negotiations with the Obama administration, clearing the way for final Congressional action later this week.

[...]

The final bill includes $507 billion in spending programs and $282 billion in tax relief, including a scaled-back version of Mr. Obama's middle-class tax cut proposal, which would give credits of up to $400 for individuals and $800 for families within certain income limits. It will also provide a one-time payment of $250 to recipients of Social Security and government disability support. [The New York Times, 2/12/09]

CBS: HIRE Act Included "$17.5 Billion In Tax Cuts, Business Credits And Subsidies For State And Local Construction Bonds." A March 18, 2010 CBS detailed tax cuts and credits contained in the Hiring Incentives to Restore Employment (HIRE) Act:

President Obama today signed into law a $17.5 billion jobs bill that he said will spur hiring and help small business owners.

In signing the bill, called the HIRE Act, the president said that while government can't be the only solution to address lagging employment in the wake of the recession, it can serve to “promote a strong, dynamic private sector” that can drive job creation.

The bill includes $17.5 billion in tax cuts, business credits and subsidies for state and local construction bonds, and moves $20 billion into the highway trust fund for spending on highway and transit programs. It exempts businesses that hire unemployed workers from paying the payroll security tax through December of 2010. [CBS, 3/18/10]

Small Business Jobs Act Included Eight New Small Business Tax Cuts. In September 2010, Obama signed the Small Business Jobs Act, which included eight new small business tax cuts. From the White House website:

Zero Taxes on Capital Gains from Key Small Business Investments: Under the Recovery Act, 75 percent of capital gains on key small business investments this year were excluded from taxes. The Small Business Jobs Act temporarily puts in place for the rest of 2010 a provision called for by the President - elimination of all capital gains taxes on these investments if held for five years.

[...]

Extension and Expansion of Small Businesses' Ability to Immediately Expense Capital Investments: The bill increases for 2010 and 2011 the amount of investments that businesses would be eligible to immediately write off to $500,000, while raising the level of investments at which the write-off phases out to $2 million. Prior to the passage of the bill, the expensing limit would have been $250,000 this year, and only $25,000 next year.

[...]

Extension of 50% Bonus Depreciation: The bill extends - as the President proposed in his budget - a Recovery Act provision for 50 percent “bonus depreciation” through 2010, providing 2 million businesses, large and small, with the ability to make new investments today and know they can receive a tax cut for this year by accelerating the rate at which they deduct capital expenditures.

A New Deduction of Health Insurance Costs for Self-Employed: The bill allows 2 million self-employed to know that on their taxes for this year, they can get a deduction for the cost of health insurance for themselves and their family members in calculating their self-employment taxes. This provision is estimated to provide over $1.9 billion in tax cuts for these entrepreneurs.

Tax Relief and Simplification for Cell Phone Deductions: The bill changes rules so that the use of cell phones can be deducted without burdensome extra documentation - making it easier for virtually every small business in America to receive deductions that they are entitled to, beginning on their taxes for this year.

An Increase in the Deduction for Entrepreneurs' Start-Up Expenses: The bill temporarily increases the amount of start-up expenditures entrepreneurs can deduct from their taxes for this year from $5,000 to $10,000 (with a phase-out threshold of $60,000 in expenditures), offering an immediate incentive for someone with a new business idea to invest in starting up a new small business today.

A Five-Year Carryback Of General Business Credits: The bill would allow certain small businesses to “carry back” their general business credits to offset five years of taxes - providing them with a break on their taxes for this year - while also allowing these credits to offset the Alternative Minimum Tax, reducing taxes for these small businesses.

Limitations on Penalties for Errors in Tax Reporting That Disproportionately Affect Small Business: The bill would change, beginning this year, the penalty for failing to report certain tax transactions from a fixed dollar amount - which was criticized for imposing a disproportionately large penalty on small businesses in certain circumstances - to a percentage of the tax benefits from the transaction. [WhiteHouse.gov, 9/27/10, emphasis original]

Treasury Dept.: Obama's Payroll Tax Cuts Included Cuts Designed To Spur Economic Growth And Job Creation. A November 30, 2011, study released by the United States Department of the Treasury examined the payroll tax cut contained in the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010. From the report:

The bipartisan Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 included several specific tax cuts and initiatives designed to spur economic growth and job creation. One important component of the Act was a reduction in the employee Social Security tax rate from 6.2 percent to 4.2 percent of the first $106,800 of taxable wages received in 2011. On December 17, 2010, President Obama signed this Act into law. The payroll tax cut is providing substantial benefits to working families and the economy throughout 2011. Some of the highlights are:

$109 billion in overall tax relief: The payroll tax cut is providing an estimated $108.6 billion in tax relief throughout 2011 to working Americans.

Tax cut for 159 million workers: The payroll tax rate cut has resulted in an estimated 158.9 million working Americans receiving larger paychecks in 2011.

A tax cut of about $1,000 for a typical family: For a family with wages or salaries of $50,000 per year, about the median household income, the payroll tax cut equals $1,000. [Treasury.gov, 11/30/11]

NY Times: Obama's Payroll Tax Cut Extended. In a February 17 article, The New York Times reported that Congress passed a $140 billion dollar extension of Obama's payroll tax cut. [The New York Times, 2/17/12]

For more on Obama's tax cutting record click here

Experts Agree That Tax Cuts For Working Americans Creates Jobs And Boosts Economic Growth ...

Experts Agree That A Payroll Tax Cut Such As The One Obama Championed Is Good For Growth. Nobel Prize winning economist Paul Krugman, economics professors, a former chairwoman of the Council of Economic Advisers, and other experts agreed that a payroll tax cut, such as the one enacted by Obama, would lead to increased jobs and growth. [Media Matters, 12/9/11]

For more on experts talking about the effectiveness of middle class tax cuts, click here.

... While Tax Cuts For the Wealthy Do Not Stimulate Growth

Tax Policy Center: “Higher Income Households Are More Likely To Bank the Cash Than Spend It.” In an August 31, 2010, post, Tax Policy Center economist Howard Gleckman pointed out that tax cuts for the wealthy generally do not go back into the economy. Gleckman noted: “We know that higher income households are more likely to bank the cash than spend it. As a result, tax cuts for these high-earners will do relatively little to boost the economy in the short run.” [Tax Policy Center, 8/31/10]

CBO Scored "[D]eferring The Scheduled Increases In Tax Rates" As The Lowest-Scoring Policy Proposal To Stimulate Economy. In its January 2010 report, CBO stated that “a permanent extension [of the Bush tax cuts] would entail large revenue losses after the recovery is over.” The report further stated that this policy would do little to stimulate the economy:

[P]olicies that would temporarily increase the after-tax income of people with relatively high income, such as an across-the-board reduction in income taxes or an increase in the exemption amount for the AMT, would have smaller effects [than other options] because such tax cuts would probably not affect the recipients' spending significantly. [Congressional Budget Office, January 2010]

Krugman: “The Economic Record Certainly Doesn't Support The Notion That Superlow Taxes On the Superrich Are The Key To Prosperity.” In his January 19 New York Times column, Nobel Prize winning economist Paul Krugman explained that based on recent history, lower tax rates for the wealthy do not create more jobs.

[T]he low-tax status of the very rich is also a recent development. During Mr. Clinton's first term, the top 400 taxpayers paid close to 30 percent of their income in federal taxes, and even after his tax deal they paid substantially more than they have since the 2003 cut.

So is it essential that the rich receive such a big tax break? There is a theoretical case for according special treatment to capital gains, but there are also theoretical and practical arguments against such special treatment. In particular, the huge gap between taxes on earned income and taxes on unearned income creates a perverse incentive to arrange one's affairs so as to make income appear in the “right” category.

And the economic record certainly doesn't support the notion that superlow taxes on the superrich are the key to prosperity. During that first Clinton term, when the very rich paid much higher taxes than they do now, the economy added 11.5 million jobs, dwarfing anything achieved even during the good years of the Bush administration. [The New York Times, 1/19/12]