Media's Tax Bias: All About Spreading Wealth, Not Expanding Pie



Media's Tax Bias: All About Spreading Wealth, Not Expanding Pie

On Monday's Good Morning America, in a fact check of John
McCain's statement that Barack Obama "gives away your tax dollars to
those who don't pay taxes," reporter Jake Tapper cited the Tax Policy
Center's analysis of the McCain and Obama tax cuts to stamp McCain's
charge "false." Tapper: "Obama's tax cuts only go to people who work,
so by definition, it's not welfare. Some working people eligible for
Obama's tax cut make so little, they do not pay income taxes. But they
do pay payroll taxes and other taxes."

In other words, McCain would have been accurate if he'd said
"gives an income tax cut to those who don't pay income taxes -- and
pays for it by raising income taxes on those who are already
shouldering more than half of the nation's income tax burden." See:

But Monday's piece illustrated the liberal media's penchant for
analyzing tax proposals according to a liberal yardstick -- who gets
how big a check from the government -- rather than by analyzing how
the rival tax policies will contribute to greater prosperity (by
helping or hurting economic growth, rewarding or punishing job
creation, etc.).

[This item, by the MRC's Rich Noyes, was posted Monday afternoon
on the MRC's blog, ]

While the media are always checking to see how the candidates
"spread the wealth," they seem not to care if a candidate will help
expand the economic pie and make us all wealthier in the long run.

It also marked the fifth time in five months that Good Morning
America has cited the liberal Tax Policy Center (an offshoot of two
liberal think tanks, the Brookings Institution and the Urban
Institute), while conservative tax experts at the Heritage Foundation
have never been cited.

Tax Policy Center:

Yet last Wednesday, October 15, the Heritage Foundation released
a detailed comparison of the Obama and McCain tax plans, and concluded
McCain's proposal does a better job of enhancing prosperity:

Senator McCain's plan is substantially better at spurring economic
growth than Senator Obama's. This is not surprising, since Senator
McCain focuses on economic growth and job creation, while Senator
Obama focuses on redistribution of income....Each presidential
candidate achieves his stated goal, with Senator McCain generating the
most new jobs, growth, and additional income for individuals. Senator
Obama's plan drives up the tax rate for individuals with annual
incomes above $250,000 and redistributes money to workers with lower


Wouldn't it be fair to have the conservative analysis appear at
least once alongside the liberal analysis of who gets what?

Here's more from Jake Tapper's "Fact Check" from the October 20
Good Morning America, as transcribed by the MRC's Scott Whitlock:

JAKE TAPPER: How about this charge from McCain?
SENATOR JOHN MCCAIN: His plan gives away your tax dollars to
those who don't pay taxes. That's not a tax cut. That's welfare.
TAPPER [Big red "FALSE" stamp appears onscreen]: That's false.
Obama's tax cuts only go to people who work, so by definition, it's
not welfare. Some working people eligible for Obama's tax cut make so
little, they do not pay income taxes. But they do pay payroll taxes
and other taxes.
Here are some tax facts. [Onscreen graphic for source: Tax Policy
Center analysis of candidates' plans based on public statements.] If
you make up to $18,725, McCain will give you a tax cut of $65, while
Obama will give you $567. If you make between $37,000 and $66,000,
McCain would give you half of what Obama would. $66,000 to about
$110,000 a year, McCain gives you a $1,487 tax cut. Obama will give
But here's where the starkest differences come in. If you're in
the top one percent, making between $602,000, to $2.8 million, McCain
gives you a $109,214 tax cut on average. Obama would raise your taxes
on average by $121,689. Those figures are for 2009 and, of course,
they're just generalities. We have more detailed information at

As he promised viewers, Tapper offered a bit of further
explanation at his ABC News blog, "Political Punch." See: LINK:

Now, some of the key findings of the Heritage Foundation analysis
of the two tax plans, authored by William Beach, Karen Campbell, Rea
S. Hederman, Jr., and Guinivere Nell and released Wednesday. The
quotes are all directly from the report, but I've re-arranged the
paragraphs and added headings so that the McCain and Obama proposals
can be more easily compared.

My summary of their findings: Compared to Obama, McCain's plan
adds an extra $100 billion to GDP over the next ten years, more than
one million additional jobs, much higher disposable income for a
family of four, and a far greater personal savings rate.


MCCAIN PLAN: GDP will be, on average, $283.7 billion higher over
the 2009 to 2018 horizon. Real (inflation-adjusted) GDP growth is
between 0.2 and 0.5 percent higher than the baseline. The expansion in
the U.S. economy is largely due to the incentives to save and invest
in productive capital and technology through reductions in capital
gains and dividend taxes, and accelerated expensing of depreciation
for capital purchases. These incentives are enhanced by a substantial
reduction in the tax rate on corporate income, which lowers consumer
costs and allows corporations to expand their investments.

OBAMA PLAN: GDP grows due to increased consumption. The level of
output in the economy as measured by the GDP jumps by an average of
$101.7 billion (after inflation) in Obama's plan. By 2018, the
difference between baseline and the forecast is $187.2 billion in
additional output, or about a 1.2 percent increase in the level of
GDP. Nearly all of this increase stems from personal consumption
expenditures. The consumption of households grows by an average of
$146.9 billion, and government consumption expands by $6.6 billion.
Indeed, household consumption outlays jump by $235.2 billion above
baseline in 2018, and over the entire 10-year period average $146.9
billion above what they would have been without Senator Obama's plan.
Net exports, however, fall by an average of $59 billion, indicating
that imports (which subtract from GDP) grow more rapidly than exports
did in his plan. Gross private domestic investment increases by an
average of $4.2 billion.

For a chart showing the projected difference in GDP growth under
the two plans:


MCCAIN PLAN: Total employment increases an average of 2.13
million jobs over the next 10 years. Peak job increases over the
baseline are 3.4 million additional jobs in 2018. The difference
between the number of jobs Under the McCain plan and the baseline
increases each year. The corporate income tax reductions and the
incentives for saving and investment allow business owners to expand
their operations and increase their investment in new equipment.
Investment leads to expanded output that, in turn, increases personal
incomes and employment.

OBAMA PLAN: Employment grows modestly. The Obama plan encourages
job growth principally through boosting consumption. Average job
increases equal 915,800 over the 10-year period. Private-sector
employment averages 814,700 additional jobs. The difference between
the two results equals public-sector employment growth above the
baseline, or an average of 101,100 new government jobs per year. These
numbers would have been bigger had the Senator not raised tax rates on
upper-income taxpayers.


MCCAIN PLAN: The McCain tax plan is projected to increase a
person's disposable income as much as $2,438 above the baseline. A
family of four is projected to have $9,750 more disposable income than
the current baseline and an average of $5,138 more after-tax income
than the baseline over the next 10 years.

OBAMA PLAN: Senator Obama's plan extends the Bush tax reductions
for taxpayers with adjusted gross incomes below $250,000 a year, and
this "hold harmless" provision in his plan causes higher after-tax
incomes. For a family of four, disposable income (after inflation)
rises by an average of $3,631 over the forecast horizon. By 2018,
after-tax income has increased by $5,620.


MCCAIN PLAN: McCain's tax plan provides support for greater
levels of personal savings, a particularly important development given
the tsunami of entitlement spending expected over the next five
decades. The personal savings rate is 2.5 times higher than the
baseline. In 2018, for instance, the baseline requires a personal
savings rate of 2 percent of income. The McCain plan raises the rate
to 4.9 percent of personal income. That increase in the rate
translates to substantial increases in total savings. The baseline
forecast requires an annual average level of personal savings of $3.1
billion (after inflation). The McCain plan raises that annual average
to $212 billion, or a 68-fold increase over baseline levels.

OBAMA PLAN: The modest boosts to income stemming from the
extension of the Bush tax reductions in Obama's plan lead to increased
savings. Personal savings increase by an average $135 billion (after
inflation) between 2009 and 2018.


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