Fox News' Sean Hannity falsely claimed that President-elect Barack Obama's economic plan gives money to "people that don't pay any taxes," echoing the oft-repeated myth from the presidential campaign that Obama's proposed tax cuts would go to people who don't pay taxes. In fact, Obama has proposed giving the tax credit to "working families," which means they do pay Social Security and Medicare taxes.
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On the January 9 edition of Fox News' Hannity & Colmes, co-host Sean Hannity asked Fox News contributor Lanny Davis: "[H]ow is it that people that don't pay any taxes are going to get what's called a tax cut under the Obama plan?" adding, "[E]xplain to me how that's not welfare." Numerous Fox News hosts and contributors previously claimed that people who don't pay taxes would be eligible for an individual tax credit included in President-elect Barack Obama's proposed economic recovery plan. In fact, Obama has proposed giving the tax credit to "working families," which means they pay Social Security and Medicare taxes under the Federal Insurance Contributions Act. Additionally, The New York Times reported in a January 4 article that Obama's proposals "include about $300 billion in tax cuts for workers and businesses."
In a January 8 speech, Obama stated that his proposed tax credit will go to working Americans, saying, "To get people spending again, 95% of working families will receive a $1,000 tax cut -- the first stage of a middle-class tax cut that I promised during the campaign and will include in our next budget."
Indeed, the "Making Work Pay" tax credit Obama included in his economic proposal during the presidential race would provide a "tax credit of up to $500 per person, or $1,000 per working family":
This refundable income tax credit will provide direct relief to American families who face the regressive payroll tax system. It will offset the payroll tax on the first $8,100 of their earnings while still preserving the important principle of a dedicated revenue source for Social Security. The "Making Work Pay" tax credit will completely eliminate income taxes for 10 million Americans. The tax credit will also provide relief to self-employed small business owners who struggle to pay both the employee and employer portion of the payroll tax. The "Making Work Pay" tax credit offsets some of this selfemployment tax as well.
Additionally, consumers in the United States are required to pay federal excise taxes, including 18.4 cents per gallon of gasoline. U.S. residents are also subject to state taxes, such as sales, income, and property taxes.
As Media Matters for America documented, Fox News anchors and contributors -- including Shepard Smith, Megyn Kelly, Trace Gallagher, Gretchen Carlson, and Cheryl Casone -- as well as Washington deputy managing editor Bill Sammon, have all promulgated the falsehood, which echoes the often-repeated myth from the 2008 presidential campaign that Obama's proposed tax cuts would go to people who don't pay taxes.
From the January 9 edition of Fox News' Hannity & Colmes:
HANNITY: Explain this to me, 'cause I'm a conservative, and maybe I just don't understand spread-the-wealth socialism, and I want you to help me. Because, Lanny, how is it that people that don't pay any taxes are going to get what's called a tax cut under the Obama plan? How is -- explain to me how that's not welfare. I'm having a hard time with this new economics, and I know you can simplify it for me. So how is that not welfare, and how is that a tax cut?
DAVIS: Well, an awful lot of people think that welfare is giving tax subsidies to big corporations and wealthy people --
HANNITY: No, no, no, no.
DAVIS: -- who don't pay their fair share.
HANNITY: Focus on my question, though. Focus on my --
DAVIS: So there is some -- no, there's some subsidy involved in giving people who don't pay taxes some cash to help revive the economy.
HANNITY: So is it welfare --
DAVIS: So you could call it --
HANNITY: -- or is a tax cut?
DAVIS: Well, welfare was a program that was a continuing program for poor people. This is a temporary injection --
HANNITY: All right.
DAVIS: -- of cash into our bloodstream.
HANNITY: John Kasich --
DAVIS: But you should be as offended by wealthy people getting that money just as you are by poor people getting it.
HANNITY: All right, Mark Steyn is laughing. Mark, go ahead.