Today, the White House accused Fox News of misleading their viewers about taxing the rich, and offered a point by point debunking of the Fox talking points.
Here is the Fox News Sunday video where Chris Wallace misinforms his audience about the wealthy and taxes:
Chris Wallace tried to argue that taxes should not be increased on the wealthy by saying, “1 percent of households with the highest incomes pay 38 percent of federal income taxes. The top 10 percent pay 70 percent of federal income taxes. Meanwhile, 46 percent of households pay no federal income tax at all.”
Today on the White House Blog, Communications Director Dan Pfeiffer called out Wallace’s stats, “These statistics are misleading and don’t tell the whole story. They leave out payroll taxes that every worker pays to make sure they will have Social Security and Medicare when they retire, which fall disproportionately on the middle class. And they don’t mention that the share of the nation’s income going to the highest earners grew rapidly in the past two decades – at the same time tax rates fell for the highest earners. In fact, because of growing income inequality, the top 10 percent of American earners now earns 42 percent of the nation’s income, and when correctly calculated, pay about 50 percent of the federal income and payroll tax burden – not much larger than their share of earnings.”
Pheiffer was just getting warmed up. He followed up with a point by point debunking of the Fox News talking points,
Claim: The top 10 percent wealthiest Americans pay 70 percent of federal income taxes.
Fact: This statistic presents a deeply misleading picture of the actual federal tax burden because (1) it fails to include payroll taxes, which every worker pays, and which fall disproportionately on the middle class, and (2) because it doesn’t reflect that high-income Americans earn a disproportionate share of income.
– Payroll taxes account for 34 percent of federal revenues. They only apply to income earned on the job – not income from capital gains on investments, which make up a much greater share of the income of the top 10 percent. And payroll taxes for Social Security are capped at $106,800.
– For both of these reasons, wealthier Americans face a disproportionately lower burden from payroll taxes. According to the independent, non-partisan Congressional Budget Office, the wealthiest 10 percent only pay 25 percent of all payroll taxes.
– Counting both payroll and income taxes, the top 10 percent only pay about 50 percent of that tax burden – not much larger than their share of our nation’s income (around 42 percent).
Claim: The 1 percent of households with the highest incomes pay 38 percent of federal income taxes.
Fact: This statistic again ignores the payroll taxes that every working American pays, and the fact that incomes of the top 1 percent have increased rapidly in recent years.
– As with calculations about the tax burden of the top 10 percent, this claim ignores payroll taxes that every American worker pays, but fall much less on the highest earners.
– In fact, the top 1 percent of all Americans only pay 4.1 percent of the nation’s payroll taxes. Overall, they pay about one-quarter of federal income and payroll taxes.
– While the top 1 percent pays about one-quarter of our federal income and payroll tax, they also earn 19 percent of our nation’s income.
Claim: 46 percent of households pay no federal income tax at all.
Fact: Around 82 percent of Americans pay income or payroll taxes, and those who don’t are mostly elderly people.
Ignoring payroll taxes presents a particularly misleading picture for middle income taxpayers. In fact, according to the independent, non-partisan Tax Policy Center, around 82 percent of Americans pay income or payroll taxes.
Fox News has become the primary propagator of the myth that nearly half of Americans don’t pay taxes, and Chris Wallace was trying to make the ridiculous argument that the rich shouldn’t have to pay more, even though they make more money. Fox News has been trying for months to turn the fairness argument on its ear in order to defend the polices of the last decade that caused the tax burden to trickle down and crush 98% of the American people.
The current rate of taxation is unfair to everyone who is not rich. The American people were promised prosperity if the wealthy were given special treatment, but a decade has passed and prosperity has never come around our corner. It is good to see the White House taking on the media mouthpiece of privilege and entitlement. The Obama administration has had good messages on a variety of issues, but sometimes struggled to communicate them in a simple and effective manner.
On the issues of jobs and taxes the administration now has a simple message that it is taking to the American people. They are also excelling at countering the distortions and misinformation coming from the right. As nice as it is to see the White House mixing it up with Fox News, more importantly, they are winning the message war on jobs and taxes.
The Obama message on taxes is the same as it was in December. The difference is that the White House is now presenting taxation as a moral issue, and this approach has connected with the American people.
The battle for 2012 is on, and it looks like the White House is no longer going to let Fox News roam unchecked