Al Franken distorts Bush tax cuts
When George W. Bush ran for president in 2000, he proposed a number of tax cuts. These included such favorites as increasing the child tax credit, applying the child tax credit to the alternative minimum tax, expanding the limit on education savings accounts, expanding the federal charitable deduction to include non-itemizers, reducing the marriage penalty for two-earner couples and lowering the marginal rate.
According to Franken, Bush lied about his tax cuts.
For example, Franken accuses Bush of citing income tax statistics but making his audience think he’s talking about all taxes, including payroll taxes. Franken, of course, is lying. Here’s the quote Franken offers where Bush is supposedly trying to fool us:
It is a plan that significantly reduces taxes for people at the bottom end of the economic ladder. If you’re a family of four making $35,000, you’ll receive 100 percent tax cut. It’s an average tax relief for families of $1,600. The Yahng family under the plan I submit will receive actually more than that. They now pay $2,000 in taxes to the federal government. If this plan is enacted by the United States Congress, they’ll end up paying $150 of taxes.
According to Franken:
The President could have told the truth by saying, one hundred percent income tax cut.
Actually, Bush explained exactly what he was referring to. Franken just left it out. This is what Bush went on to say but Franken didn’t quote:
The reason this family will receive the tax relief they’re going to get is because we’ve dropped the bottom rate from 15 percent to 10 percent, and doubled the child credit from $500 to $1,000 per child.
There was no reason for anyone to think that Bush was promising to eliminate their payroll tax, sales tax (cigarettes) or any other tax. But if for any reason they assumed that, it was cleared up when Bush specifically told his audience the taxes to which he was referring.
Franken also complains that Bush’s tax cuts were not focused heavily enough on families with incomes between $35,000 and $70,000.
Needless to say, Bush had a hard time finding families in that income range that would receive more tax benefit from his plan than from Gores plan. A couple making $70,000 with a retirement savings plan but with no children would receive lots of help from Gore. A couple making $70,000 with 5 children would receive lots of help from Bush. So Bush helped those who were struggling to live the American dream, Gore helped those who were well on their way. Or as Franken sarcastically quipped about who Bush’s plan helped:
No children in college? No one in night school? No children under one? No savings? Talk about living the American dream!
But that was the point of Bush’s tax proposal; to focus the help on those who needed it most, not those who were living the American dream.
Franken continued:
These highly selective criteria eliminated 85% of all couples in the income range. The 85 percent would have done better under the Gore tax plan. We can fairly conclude that a “vast majority” if not “by far a vast majority” of middle-income American families of four would be paying less taxes today if Gore had been inaugurated.
But Bush never claimed that all middle-income families would receive special benefits under his plan. What Bush said was that everyone who paid taxes would get a reduction in their marginal rate and the majority of his other tax cuts would go to those who needed it the most. So the 85% that didn’t get as much under Bush’s plan, the average Joe which Franken is referring to, is not who needed it the most.
If you look close, Franken is inadvertently confirming Bush’s claim while at the same time calling Bush a liar.
According to Franken,
Rather than offering up an illuminating case of Mr. and Mrs. Joe Average, the Bush campaign was casting a political freak show in order to present a tiny minority as the norm.
In reality, Bush had made it very clear that he had designed his tax cuts to offer disproportionate aid to those with the most need. Mr. and Mrs. Joe Average did get a marginal rate reduction under Bush’s plan, which certainly counts for a lot, but by far the vast majority of the help went to those at the bottom end of the economic ladder. These people may have lots of children and might not have as much education and savings as Al Franken and his family, but that does not make them a cast in a “political freak show” as Franken calls them.
Franken argues that families making between $350,000 and $700,000 all got a bigger tax cut under Bush than under Gore. These are people who are well within the top 1%. These people pay huge amounts of taxes, so any kind of tax cut is going to end up returning them more money. It might not seem fair that everyone should get something back, even the rich. But its right. Its about valuing freedom instead of envy.
At no point did Bush mislead about offering a tax cut to everyone—including people who were well off.
Being free means that there will be good people and there will be bad people. There will be people who use their freedom to give to others; there will be those who do not. Bush understood this, so one of his proposed tax cuts increased the amount of money a rich person could donate to charity without paying taxes on it. That counts as a tax cut for the rich, but like the vast majority of his tax cuts, Bush designed it to aid the poor.
The results bear out claims of helping the poor. Bush based his tax plan on need, not on total income; nevertheless, either standard lowers the overall share carried by the poor.
Millions of people with hungry little mouths to feed have been taken off the income tax rolls altogether. These are millions of US families that used to have an income tax burden, some of them in the thousands of dollars each year, but now have none. Although most of these families are in the “top 50%”, (which simply means they make over $29,019) they definitely fall into the category of need. The 1,000-dollar per-child credit has helped these middle-class working families enormously. (The Washington Times, Stephen Dinan) While those who were taken off the tax rolls benefited the most, the top half of those remaining shoulder a higher percent of the load than what was formerly the top 50%. Accordingly, the percentage of the load carried by the bottom half has gone down.
That is help going to the bottom.
Franken claims Bush promised to give the bottom half between 85%-90% of all the money coming back from his tax cuts. That’s about nine times more money than the top half. In other words, those who earn more than $29,019 would be getting nine times less money from Bush’s tax cuts than those who earn less than $29,019. According to my calculations, that would give them more money than the total of what they earn. Since that did not happen, Franken says Bush lied.
What Bush actually said was that the vast majority of the tax cuts he was proposing would help those who needed it most. He was not talking about the dollar amount that would go to a group of people; he was defending his plan against those who claimed it only helped the rich. The context of Bush’s statement bears that out:
by far the vast majority of my tax cuts go to the bottom end of the spectrum. And this language about Governor Bush’s only has tax cuts for the rich, sounds exactly like Al Gore
(Bold added)
The problem with the Franken interpretation, aside from the fact that it falls flat on its face to begin with, is that it ignores context. Not only did Bush say, “by far the vast majority of my tax cuts go to the bottom end of the spectrum,” he also explained the details of his tax cuts.
In fact, moments before the above quote, Bush said that, for someone making $1 million a year, the marginal rate “goes from 39.6 to 33 percent.” When Al Franken heard that, he should have thought, “Okay, Bush is spelling out the details of his proposal. I better pay attention so I’ll know what it is he’s promising to do.” Instead, Franken acts as though the details spelled out by Bush are perfectly in harmony with what he claims Bush said—that poor people would get nine times more money back than rich people would—a mathematical impossibility.
In addition, moments before Bush described the rate drop for the wealthy, he had explained what his tax plan would do to the lower marginal rate. Bush said:
I’ve reduced the lower rate from 15 percent to 10 percent.
(the transcript inaccurately attributes this to McCain, but it was Bush who said it)
What Bush said about the marginal rate alone was more than enough to tell us Franken was full of bunk. Nevertheless, Franken calls this a “fair parsing”:
I’m going to say that “by far the vast majority of my tax cuts go to those at the bottom” would mean that the poorest 50 percent were getting somewhere in the neighborhood of 85 to 88 percent of Bush’s tax cut.
That’s fair, right? That’s a fair parsing.
It is a good thing Bush offered plenty of context. Here’s what Bush said his tax cuts would do:
First presidential debate, 10-03-2000:
After my tax plan is in place, the poorest of Americans, six million families, won’t pay any tax at all
New Hampshire, 1-25-2000:
I believe it is important to drop the top rate from 39.6 to 33 percent to encourage entrepreneurship.
Bob Jones University, 2-02-2000:
The biggest percentage tax cuts in my plan will go to the lowest income men and women.
Barnstorm for reform tour 10-22-2000
We will reform the tax code – to make it fairer and simpler. Here’s my plan: If you pay income taxes, you get a tax cut. If you are a low or moderate income worker, you get the biggest percentage tax cut. (Bold added)
12-06-99 Arizona debate:
my tax plan drops the rates from 15 percent to 10 percent and allows for $1,000 per child credit for working people, and all people
Iowa debate 12-13-99:
my plan, John, says to the single mom with two children making $40,000 a year, you get a 53 percent tax cut.
Michigan debate 1-10-2000:
BUSH: Thank you. I believe everybody ought to get a tax cut. I believe it’s important to cut the top rates. I think it’s important to drop the 39.6 to 33 percent. I also know it’s important to make sure people who are on the outskirts of poverty get a tax cut as well. And my plan does both.
New Hampshire Women’s Forum Dinner 12/20/1999:
Here’s my plan. I believe we should simplify the tax code by changing the rate structure to 33 percent for the top rate. I think we need to have a 25 percent rate, a 15 percent rate, and a bottom rate no longer of 15 percent, but 10 percent. I think we need to increase the child credit from $500 per child to $1,000 per child. I know we need to get rid of the death tax in America. And the earnings test for social security recipients. And I know we need to mitigate the marriage penalty.
Republican Presidential Debate 01/10/2000:
I believe everybody ought to get a tax cut. I believe it’s important to cut the top rates. I think it’s important to drop the 39.6 to 33 percent. I also know it’s important to make sure people who are on the outskirts of poverty get a tax cut as well. And my plan does both.
New Hampshire 01/13/2000:
If you’re a family of four under my plan making $50,000 a year in the state of New Hampshire you get a 50 percent tax cut, 50 percent tax cut. If you’re making 75,000 a family of four, a 25 percent tax cut.
Political Action Conference 01/22/2000:
We’ll eliminate the Social Security earnings test for our seniors, expand education savings accounts to cover K through 12, and allow the 70 percent of taxpayers who don’t itemize to deduct charitable contributions.
New Hampshire 01/25/2000:
I’ve laid out a plan that cuts the rates on everybody, not only dropping the top rate from 39 to 33 percent.
Bush wasn’t shy in spelling out the specific details of what he was promising to do. So how did Franken get it so wrong?