On the October 17 broadcast of The War Room, co-host Jim Quinn falsely claimed that most average-income bus drivers, teachers, and autoworkers “don't pay any taxes.” After airing a clip of Sen. Barack Obama saying, “I want to give all these folks who are, you know, bus drivers, teachers, autoworkers who make less -- I want to give them a tax cut,” Quinn said: “He wants to give them a tax cut. Most of those people he just mentioned, if they fall into the average-income category that we're talking about here, don't pay any taxes. So how do you give them a tax cut?” In fact, as Media Matters for America documented, in 2008, U.S. workers who are not self-employed are required to pay 6.2 percent of all of their wages up to a cap of $102,000 and 1.45 percent of their wages for Medicare under the Federal Insurance Contributions Act (FICA). Self-employed individuals are required to pay 12.4 percent of their wages up to the cap for Social Security and 2.9 percent of their wages for Medicare. Additionally, people in the United States are required to pay federal excise taxes. For instance, everyone who buys gasoline in the United States pays 18.4 cents per gallon of gasoline in federal excise taxes.
The Congressional Budget Office's most recent calculation of the effective federal tax rate, which is calculated by combining the effective tax rates of the four largest sources of federal revenues, found that, in 2005, households in the lowest quintile of income earners pay an average effective federal tax rate of 4.3 percent. The second lowest quintile paid an average effective federal tax rate of 9.9 percent. The table below illustrates the average effective tax rate by income level:
From the October 17 broadcast of Clear Channel's The War Room with Quinn & Rose:
QUINN: The question that Barack Obama raised was: “Well, how many plumbers do you know who make $250,000 a year?” Well, good question. That's an excellent question. Jim Angle from Fox News?
[begin audio clip]
ANGLE: Actually, quite a few small businesses with employees make that much, a point Joe raised when he confronted Obama about his tax proposals earlier this week, telling the candidate he's hoping to buy the plumbing business he now works for.
JOE WURZELBACHER: I'm getting ready to buy a company --
OBAMA: Yeah.
WURZELBACHER: -- that makes 200, about 250, $270, 80,000 a year.
OBAMA: All right.
WURZELBACHER: Your new tax plan is going to tax me more, doesn't it?
ANGLE: Obama pointed to other tax breaks that might soften the blow and said he needs to tax those with incomes over $250,000 to give tax breaks to others who make less.
[end audio clip]
QUINN: Now, understand that so many of these companies that make over $250,000 a year, they don't put that in their pocket and take it home -- the company makes it. They file as Chapter sub-S corporations, which shows up as an individual tax return -- these people are not walking away with 250 Gs.
OBAMA [audio clip]: I want to give all these folks who are, you know, bus drivers, teachers, autoworkers, who make less -- I want to give them a tax cut.
QUINN: Wait a minute. Let -- hold on a second. He wants to give them a tax cut. Most of those people he just mentioned, if they fall into the average-income category that we're talking about here, don't pay any taxes. So how do you give them a tax cut? You give them a tax cut by taking away Joe's money and redistributing the wealth to them.