Here we go again. Just as with 2001-2003 coverage of Bush's tax cuts which gave the greatest percent cut to those in the lowest income tax bracket (going from 15 down to 10 percent, a 33 percent reduction), ABC's George Stephanopoulos on Sunday chose to undermine the fairness of John McCain's proposed tax plan (and illustrate the media hostility sure to greet McCain whenever he takes a conservative position) by citing estimated dollar cuts by income level, as if it's unfair for someone earning more to get a larger dollar amount tax cut than someone making less.
Citing the Tax Policy Center, a project of two left of center organizations -- the Urban Institute and Brookings Institution -- Stephanopoulos reminded This Week guest Tim Pawlenty, the Republican Governor of Minnesota, how “your trademark has been that the Republican Party has to be the party of Sam's Club, not just the country club.” Stephanopoulos, who failed to hit his other guest, Democratic Congressman Rahm Emmanuel with any numbers critical of Obama's tax plan, pounced on Pawlenty:
The Tax Policy Institute [actually, Center] has crunched the numbers on John McCain's tax plan. I want to put some of them up there right now. It shows that if you're making under $60,000 a year about, the bottom 60 percent will get about $150. The top one percent of people, making about $600,000 a year, get $45,000. The top 0.1 percent -- that's approaching $3 million a year -- get almost $270,000. How do you sell that as a plan that targets Sam's Club more than the country club?
Demonstrating the liberal appeal of the Tax Policy Center's analysis based on dollars instead of percent cuts, as a guest on Fox News Sunday Democratic Pennsylvania Governor Ed Rendell cited the same Tax Policy Center report as did Stephanopoulos.
Picking up on the Tax Policy Center's raw numbers, the right of center Tax Foundation crunched them and discovered a trend the media rarely discuss:
Obama's plan would greatly accelerate the decades-long trend toward a federal government that depends for tax revenue almost exclusively on a few high-income people.
This contrasts starkly with the McCain plan, according to [Tax Foundation President Scott] Hodge, which would give every taxpayer a cut and leave the current tax burden distribution approximately where it is.
An excerpt from the Tax Foundation's June 26 press release:
"Under the Obama plan for 2009," explains Hodge, "more than $131 billion would be redistributed from the top 1 percent of taxpayers to all other taxpayers."
As a result, the top 1 percent of households would pay more federal taxes of all kinds than the bottom 80 percent of households. That lopsided distribution under Obama does include payroll taxes and other federal taxes, but it excludes the new payroll tax hike that Obama plans to levy on people making more than $250,000 because details about that plan are currently unclear.
"In other words," says Hodge, "it is at this point a cautious estimate to say that in 2009, under Obama's plan, 1.13 million Americans would pay more in all federal taxes than 128 million of their fellow citizens combined."
To put the Obama plan in historical context, Hodge cites various statistics that show the U.S. tax system evolving into one where a majority of Americans pay little or nothing:
* Between 1999 and 2006, the number of tax filers who had no income tax liability after taking advantage of their credits and deductions grew from 30 million to nearly 44 million.
* Looking at all federal taxes combined, the CBO says that between 1990 and 2005, the tax share of the bottom 80 percent of households dropped from 42 percent of the total to 31 percent. Meanwhile, the tax share of the top 1 percent of households rose from 16 percent to 28 percent.
* In 2004, the nation's tax and spending policies redistributed more than $1 trillion in income from the top 40 percent of American households to the bottom 60 percent of households.
The Tax Foundation's full report: “Hard Numbers on Obama's Redistribution Plan.”
The full question from Stephanopoulos on the June 29 This Week, as provided by the MRC's Brad Wilmouth who also got the screen shots for me:
Summary page
for the Tax Policy Center's report released on June 24: “A Preliminary Analysis of the 2008 Presidential Candidates' Tax Plans.” PDF of the full report.
