Issues ››› Taxes
  • Fox & Friends Misleads On Trump And Clinton Budget Figures While Praising Tax Cuts For The Rich

    Blog ››› ››› ALEX MORASH

    Fox & Friends berated Democratic presidential nominee Hillary Clinton for her tax and economic policy agenda, arguing it wouldn’t do enough to curtail future spending, while giving Republican nominee Donald Trump a pass for his supposed pro-growth tax cuts that are projected to explode the national debt over the next decade.

    Fox Business host Stuart Varney joined the cast of Fox & Friends on October 21 to attack Clinton for claiming during the final presidential debate that her tax plan “will not add a penny to the debt.” Varney contended that Clinton’s statement was false because current federal spending is on track to accumulate roughly $9 trillion in debt over the next decade. During his critique, which cited the Committee for a Responsible Federal Budget (CRFB) as its source on screen, Varney neglected to mention that, according to the CRFB, Clinton’s tax and spending plans would only add about $200 billion in new debt accumulation to the $9 trillion already baked into continuing federal spending. After accounting for the roughly $275 billion of new revenue that Clinton estimates her proposed business tax reforms will generate, her proposals are more or less balanced.

    Even though Varney seems to be a deficit scold, when Fox & Friends co-host Ainsley Earhardt asked him which candidate had the better economic plan, Varney chose Trump’s plan, which the CRFB projects would add $5.3 trillion to the national debt on top of current spending. When CRFB compared the two plans side by side, Clinton’s left projected debt levels virtually unchanged while Trump’s contribution resulted in a doubling of the national debt over the next decade:

    Varney claimed Trump’s budget-busting plan would be better for the economy because of the debunked trickle-down economic “theory” that lowering taxes in the way Trump has proposed will generate 4 percent economic growth annually. Co-host Pete Hegseth agreed with Varney, claiming that tax cuts for the rich creating economic activity nationwide “has played out in reality in the past” as Varney cited the Reagan tax cuts of the 1980s and the Bush tax cuts of 2001 as examples.

    Varney’s misleading claim that previous tax cuts instituted by Republican presidents have led to increased economic growth has been a central theme of his repeated appearances on Fox & Friends. On October 11, Varney appeared on the show and claimed that Trump’s plan would get the American economy to “4 percent growth within a couple of years.” He admitted that the plan would “initially” increase the federal deficit before speculating that “over the longer term, the deficit, I think, comes down.” Varney also appeared on September 28 when he defended Trump’s tax cuts for the rich and claimed a huge tax cut for the wealthiest Americans is “how we grow the economy.”

    The assertion that the Reagan tax cuts of 1981 and the Bush tax cuts of 2001 created an economic boom is unsubstantiated by the facts. According to The Washington Post, the Bush tax cuts increased the deficit and income inequality, and, according to a review by CBS News, they did not positively impact economic growth. Economist Austan Goolsbee stated as much on the October 20 edition of Fox News' Happening Now, arguing that the Bush tax cuts “didn't get growth” that was promised and that Trump proposing an even larger tax cut “makes no sense.” The Reagan tax cuts did no better; PolitiFact rated claims that the Reagan tax cuts led to “exponential growth” as “mostly false,” and Nobel Prize-winning economist Paul Krugman labeled the Reagan tax cuts “a one-hit wonder” where “the rich got much richer” while there was also an increase in poverty.

    According to a September 2014 report from the Brookings Institution, tax cuts do not always create economic growth and can even discourage growth by undermining economic incentives to invest. A September 2012 report by the Congressional Research Service (CRS) similarly concluded that reducing top income tax rates does not correlate with increased economic growth, but lowering top rates does "appear to be associated with the increasing concentration of income at the top of the income distribution."

    Right-wing media consistently attack Democratic politicians for their supposedly irresponsible approach to deficit spending, while ignoring Republican tax plans that would explode deficits by an even greater amount. This kind of misleading equivalency was even a feature of Fox News host Chris Wallace’s questioning during the October 19 presidential debate. The fact remains that if right-wing media really care about the debt and deficit, they have to start caring about the budget-busting tax plans pushed by conservative politicians.

    Watch the full segment from Fox & Friends here:

  • Seven Pressing Debate Questions We Never Heard

    Blog ››› ››› PAM VOGEL

    Presidential debate season is officially over, and critical policy questions that directly impact millions of Americans remain unasked just 19 days before the election.

    Democratic nominee Hillary Clinton and Republican nominee Donald Trump met last night in Las Vegas, Nevada for the final presidential debate, which was likely the last chance for the candidates to discuss specific policy issues face-to-face before November 8. Just as in the previous two presidential debates this year, moderator Chris Wallace chose to focus questions on a handful of familiar topics. Even within the context of six pre-announced debate topics, Wallace could have asked questions on major policy issues that deserve thoughtful and substantive prime-time discussion from the presidential candidates, like affordable health care, climate change, or tax plans.

    But that didn’t happen. When debate discussions did manage to turn to policy specifics on critical topics like reproductive rights or gun violence prevention, Wallace didn’t ask necessary follow-up questions or offer clarifications on the facts. (Prior to the debate, Wallace announced his intention to be a debate timekeeper rather than fact-checker.)

    All in all, last night’s debate largely covered the same ground as the previous two debates, both in topics discussed and in tone. If any of the three debates had focused more aggressively on what’s truly at stake -- what voters have said they wanted asked, what people actually believe is most important for their own families and communities -- the questions in this debate cycle would have looked very different. And the answers could speak for themselves.

    Let’s explore just how hard the moderators dropped the ball.

    This year, the United States began the process of resettling its first climate refugees. A bipartisan group of top military experts warned that climate change presents a “strategically-significant risk to U.S. national security and international security.” While Clinton wants to build on President Obama’s climate change accomplishments, Trump wants to “cancel” the historic Paris climate agreement, “rescind” the Obama administration’s Climate Action Plan, and dismantle the Environmental Protection Agency -- and he’s even called global warming a hoax perpetrated by the Chinese.

    Moderators did not ask a single question about the effects of climate change in any of the three presidential debates or the vice presidential debate.

    Several tragic mass shootings -- including the single deadliest mass shooting in U.S. history, at the LGBT nightclub Pulse in Orlando, FL, in June -- have shaken the nation since the beginning of the election season. Gun deaths in the United States, both in instances of mass shootings and in more common day-to-day violence, vastly outnumber gun deaths in other Western democracies -- so much so that the American Medical Association has declared gun violence a public health crisis. And Americans are overwhelmingly ready for lawmakers to take action. Seventy-two percent of voters say gun policy is “very important” in determining their vote this year, and an astonishing 90 percent of voters -- representing both Democrats and Republicans -- think that strengthening background check requirements for firearm purchases is a good place to start, as does Clinton. Trump recently told the National Rifle Association -- which has endorsed him  -- that he opposes expanding background checks. 

    Moderators failed to ask a single question about specific policies for gun violence prevention in the first two presidential debates, and they failed to ask a question about background check policies specifically in any debate. In the final debate, Wallace asked about gun policies in the context of the Supreme Court’s 2008 District of Columbia v. Heller decision about the scope of the Second Amendment, but he failed to follow up when Trump skirted questions about the case and about his specific positions on several gun policies like his opposition to an assault weapons ban and his oft-repeated false claim that "gun-free" zones are responsible for public mass shootings. The entire exchange lasted just under five minutes.

    Though seven in 10 Americans support legal abortion and one in three American women report having had an abortion procedure, states have enacted 288 anti-choice laws since 2010. These laws are creating a crisis by preventing women from low-income families -- many already parents who are struggling to keep families afloat -- from receiving the health care services they need. Some evidence even suggests greater numbers of women are contemplating dangerous self-induced abortions due to a lack of access to care. Trump has espoused support for these types of restrictive laws, and his running mate, Indiana Gov. Mike Pence (R), wants to “send Roe v. Wade to the ash heap of history.”

    But moderators did not ask a question about the candidates’ stances on reproductive rights until the final debate -- when Chris Wallace asked about Roe v. Wade. Again, Trump repeatedly lied about abortion policy, and the misinformation was left hanging as Wallace pivoted to a new topic after about five minutes of discussion.

    How about tax policies? Tax rates are a critical issue that directly affect all Americans, and the candidates’ respective tax policy proposals could not differ more. Clinton’s plan would benefit low- and middle-income families most and hike tax rates only for the wealthiest earners and for corporations. Trump’s plan has been called “a multitrillion-dollar gift to the rich” that “screws the middle class,” and has been panned even by conservative economists and The Wall Street Journal. One analysis concluded that Clinton’s plan  “trims deficits,” while Trump’s plan could add $6.2 trillion to the national debt. These numbers directly impact  the short-term and long-term financial health of families and communities, and 84 percent of voters say the economy is “very important” in deciding their vote in 2016.

    Substantive questions about the candidates’ specific tax plans were missing from the debates, though Trump still managed to lie about his tax proposals on several occasions. When the candidates mentioned their tax plans briefly in the final debate when asked about the economy, Wallace again lived up to his promise not to fact-check.

    A record number of anti-LGBT bills have been introduced in state legislatures this year, and LGBT students face significantly more violence than their peers, but the debates did not include a single question about policy positions related to LGBT equality.

    About 70 percent of today’s college graduates leave school with student loans, and more than 43 million Americans currently have student debt. This economic squeeze is changing how Americans plan their families, buy homes, and spend their money. Clinton has responded by making college affordability a signature issue of her campaign, while Trump’s newly described plan could “explode the student debt crisis.” Neither candidate was asked to address this issue either.

    The United States has the highest incarceration rate in the world -- we account for 5 percent of the world’s population but a whopping 25 percent of the world’s prison population. Inmate organizers recently launched what could be the nation’s largest prison strike to draw attention to deplorable prison conditions. The majority of Americans want to see changes to a federal prison system they believe is “too large, too expensive, and too often incarcerating the wrong people.” Moderators didn’t ask about criminal justice reform policies at all.

    The presidential debates instead largely focused on statements made on the campaign trail, whichever offensive comments Trump had made most recently, and -- again, always -- Hillary Clinton’s email use as secretary of state. Viewers might now  know a lot about these topics  -- or at least what each candidate has to say about them -- while still having very little information on the candidates’ starkly contrasting policy positions on issues with direct and immediate consequences to citizens’ daily lives.

    Americans relied on moderators to raise the questions they think about every day, to help them understand how the next president can help ensure that their families are safe, secure, and set up to thrive. It’s a shame the debates did not deliver. 

  • Fox’s Chris Wallace Pushes Candidates To Accept GOP Budget Priorities During Debate

    Moderator Falsely Claims Social Security And Medicare Are “Going To Run Out Of Money” Without Major Benefit Cuts

    Blog ››› ››› CRAIG HARRINGTON

    Fox News host and 2016 presidential debate moderator Chris Wallace used the last question of the presidential debate to push both the Democratic and Republican nominees into accepting a past GOP proposal -- harmful cuts to vital entitlement programs as part of a national debt-reducing “grand bargain.”

    Wallace opened his question by falsely claiming that “the biggest driver of our debt is entitlements” like Social Security and Medicare while falsely equating the nonpartisan Committee for a Responsible Federal Budget (CRFB) analyses of Donald Trump’s and Hillary Clinton’s tax and economic policy proposals. Wallace claimed that the CRFB “has looked at both” the Trump and Clinton tax plans and concluded “neither of [them] has a serious plan” to address “the fact” that Medicare and Social Security are going to run out of money in the next two decades: 

    CHRIS WALLACE: The one last area that I want to get into with you in this debate is the fact that the biggest driver of our debt is entitlements, which is 60 percent of all federal spending. Now the Committee for a Responsible Federal Budget has looked at both of your plans and they say neither of you has a serious plan that is going to solve the fact that Medicare is going to run out of money in the 2020s, Social Security is going to run out of money in the 2030s, and at that time recipients are going to take huge cuts in their benefits. So, in effect, the final question I want to ask you in this regard is, and let me start with you, Mr. Trump. Would President Trump make a deal to save Medicare and Social Security that included both tax increases and benefit cuts -- in effect, in effect a grand bargain on entitlements?


    WALLACE: Secretary Clinton, same question, because at this point Social Security and Medicare are going to run out -- the trust funds are going to run out of money. Will you as president entertain -- will you consider a grand bargain, a deal, that includes both tax increases and benefit cuts to try to save both programs?

    Wallace’s question ignores three important points.

    First, the CRFB did not score the Clinton and Trump tax plans as roughly equivalent in terms of their impact on the debt and deficit. According to a September 22 analysis from the organization, Trump’s economic agenda will create $5.3 trillion in new debt accumulation over the next decade -- more than 25 times more new debt that Clinton’s more balanced plan. University of Michigan economist and New York Times columnist Justin Wolfers tweeted a chart from CRFB showing how Trump’s plan would “explode” the national debt beyond current projections, whereas Clinton’s proposal leaves it “basically unchanged”:

    Second, as economist Jared Bernstein of the Center on Budget and Policy Priorities wrote on Twitter, Medicare and Social Security “DO NOT run out of money!!” because they are paid for by secured trust funds and specific permanent tax provisions. Bernstein also noted that the Affordable Care Act, which Trump vowed to repeal during the debate, has actually extended Medicare “solvency by 11 years.” Economist Dean Baker of the Center for Economic and Policy Research added that, because the program can only spend money from a protected trust fund, “Social Security can’t legally drive the debt.”

    Third, Wallace’s supposed solution to avoid benefit cuts for Social Security and Medicare recipients in the 2030s is to start implementing those cuts today. As New York Times columnist and Nobel Prize-winning economist Paul Krugman has noted many times, “these proposals would be really bad public policy” and would harshly impact low-income Americans who rely on the programs for retirement security. The only reason Social Security faces a long-term revenue shortfall is because the payroll tax that funds it is only applied to the first $118,500 of individual earnings. If the payroll tax cap was lifted to include more taxable earnings, the program could bring in more revenue and be funded through the end of the century. As Krugman notes, “while most Americans love Social Security, the wealthy don’t. Two years ago a pioneering study of the policy preferences of the very wealthy found many contrasts with the views of the general public; as you might expect, the rich are politically different from you and me. But nowhere are they as different as they are on the matter of Social Security.”

    Wallace’s decision to relitigate the failed “grand bargain” from 2011 wasn’t the only example of the Fox News host using the debate as a forum to push a conservative policy agenda. However, his specific fearmongering and misleading framing of the debt and entitlements does vindicate economic policy experts’ many concerns about him moderating the debate in the first place.

  • NY Times Columnist Urges Fox News Moderator To Discuss “Budget Reality” During Final Debate


    New York Times columnist David Leonhardt called on Fox News host Chris Wallace to base “his questions on budget reality” during the “debt and entitlements” portion of the third and final presidential debate that he will moderate tonight -- the first general election debate ever moderated by a Fox personality. Given Wallace’s track record of parroting right-wing media budget hysteria from his anchor desk at Fox News, it is possible that the moderator will fall short of what Leonhardt characterized as his “reputation as a serious journalist.”

  • Fox & Friends Defends Trump’s Infeasible “Trickle-Down” Tax Plan

    Fox Staunchly Defending Myth That Tax Cuts Create Economic Growth

    Blog ››› ››› ALEX MORASH

    Fox & Friends attempted to defend Republican nominee Donald Trump's budget-busting tax plan by pushing the discredited claim that his proposed tax cuts for the rich and for corporations would stimulate economic growth.

    On October 11, Fox & Friends was joined by Fox Business host Stuart Varney to discuss Trump’s tax cuts, which, according to Varney, will “get 4 percent growth within a couple of years.” After Fox & Friends co-host Brian Kilmeade pressed Varney about criticism of how much additional debt would be incurred under Trump’s “trickle-down” tax plan, Varney admitted it would “initially” increase federal deficit before speculating that, “over the longer term, the deficit, I think, comes down.” Varney also claimed Trump’s plan “is cutting taxes across the board” -- failing to mention that his cuts overwhelmingly benefit the top 1 percent of taxpayers, with almost nothing for working- and middle-class Americans. From the October 11 edition of Fox News’ Fox & Friends:

    Fox & Friends has hosted Varney before to push Trump’s “trickle-down” economic policies; on September 28, the show invited Varney to defend Trump’s tax cuts for the rich. He decried Clinton’s assertion at the September 26 presidential debate that Trump’s tax cuts are "Trumped-up trickle-down economics" and claimed Trump’s huge tax cut for the wealthiest of Americans is “how we grow the economy.” Varney continued his defense of Trump’s economic policies on his Fox Business program Varney & Co. later that morning, claiming that, economically speaking, “we are in a mess [and] the only way out is to stimulate private enterprise by tax cuts.”

    Fox’s desperate attempt to shore up Trump’s right-wing tax policy comes after economists, experts, and journalists have lampooned the plan’s many flaws. During the September 15 edition of CNN’s The Lead, Moody’s chief economist Mark Zandi noted that the job creation and economic growth Trump has promised are “not feasible” without a significant increase of net immigration over the next decade, which Trump vehemently opposes. CNN global economic analyst Rana Foroohar derided Trump’s reliance on tax cuts to boost economic growth as “magical thinking,” and noted that economists now have “20 years of evidence that this sort of trickle-down theory is not working.” The idea of tax cuts as a means for creating growth has even been debunked by economists on Fox -- including on Varney’s own show. Economist Austan Goolsbee scolded Varney on the April 25 edition of Varney & Co., reminding the Fox host that cutting taxes would not increase growth and arguing instead that they would “choke off the money that you needed to make the investments that are critical to your future grow[th].”

    According to a September 2014 report from the Brookings Institution, tax cuts do not always create economic growth and can even discourage growth by undermining economic incentives to invest. A September 2012 report by the Congressional Research Service (CRS) similarly concluded that reducing top income tax rates does not correlate to increased economic growth, but lowering top rates does "appear to be associated with the increasing concentration of income at the top of the income distribution."

    Varney has attempted to rewrite history before to claim tax cuts created “gigantic” increases in revenue during previous Republican administrations, and Fox has repeatedly pushed debunked trickle-down economic claims. The fact remains that tax cuts for the wealthy guarantee only one thing: lost revenue that could be spent on vital investments that improve the lives of every American.

  • Tax Experts: Trump Surrogates’ Defense Of His Tax Avoidance Is “Silly” And “Nonsense”

    Blog ››› ››› JOE STRUPP

    After The New York Times published tax documents from 1995 revealing that Republican presidential nominee Donald Trump lost nearly a billion dollars and could as a result have avoided paying any federal income tax for “up to 18 years,” Trump and his campaign surrogates have claimed he had a “fiduciary responsibility” to reduce his personal tax liability to the smallest amount possible under law. Veteran tax law experts tell Media Matters this explanation is “silly,” “complete nonsense,” and “almost incomprehensibly incoherent.”

    In a front page Sunday article, the Times reported, “The 1995 tax records, never before disclosed, reveal the extraordinary tax benefits that Mr. Trump, the Republican presidential nominee, derived from the financial wreckage he left behind in the early 1990s through mismanagement of three Atlantic City casinos, his ill-fated foray into the airline business and his ill-timed purchase of the Plaza Hotel in Manhattan.”

    The Trump campaign issued a statement in response that said, among other things, that Trump “has a fiduciary responsibility to his business, his family and his employees to pay no more tax than legally required." Leading campaign surrogates including former New York City Mayor Rudy Giuliani have made similar claims during media appearances. Giuliani told CNN, "If you have a set of laws, you live by those laws. And the reality is, you are ignoring completely the fiduciary obligation he has to all the people around him to run his business at the lowest possible expense."

    But respected tax attorneys and others who teach tax law said this defense doesn’t pass the smell test.

    “That’s nonsense,” said Rutheford B Campbell, a corporate law professor at the University of Kentucky College of Law. “He has a fiduciary responsibility to reduce the corporation’s tax liability. … The notion that somehow he owes an obligation to the corporation to reduce his own taxes doesn’t make sense.”

    Jeff Scroggin, a tax attorney with Scroggin & Co., P.C. of Roswell, GA., agreed.

    “I don’t see that as a legitimate argument,” said Scroggin. “The only way I can see that argument working is to say he is going to take the dollars he saves and invest them back in the business and I doubt seriously he is doing that. I doubt seriously anyone is expecting him to do that, take the savings and put them back in the business.”

    He later added, “If you lose a billion dollars can you really be a successful businessman? It has to raise questions about the viability of what he’s been doing over those years.”

    Martin McMahon, co-author of law school textbook Federal Income Taxation of Individuals, said having the responsibility to pay as little corporate taxes as possible does not extend to personal taxes.

    “I’ve never heard of any legal principle that the owner of a business has an obligation to the employees of the business or the directors to minimize the owner’s personal tax liability,” McMahon said, calling it, “complete nonsense, there is absolutely no legal principle to support that.”

    Edward Kleinbard, a tax law professor at the University of Southern California Gould School of Law, echoed that view.

    “He owes no fiduciary duty to anyone else not to pay personal income tax. It is an almost incomprehensibly incoherent argument,” Kleinbard said via email. “No, it’s just plain silly. No one is under a fiduciary duty to lose nearly $1 billion of other people’s money. He made very bad investment decisions, he skirted with bankruptcy, his lenders forced him to unload several of his properties at pennies on the dollar, and as a result he claimed a $900+ million tax loss attributable to losing his lenders’ money. What’s hard about that?”

    Roberton Williams, a senior fellow at The Tax Policy Center, a joint venture of the Urban Institute and the Brookings Institution, called Trump’s claim “kind of odd.”

    “It is his own tax return, he is the one who personally benefits from it,” Williams said. “He has this other income that normally people would have to pay tax on.”