MSNBC Sells False Idea Taxes are Lowest in 60 Years

Do you think you're paying less in federal income taxes than you ever have in your entire life?

If you watched Chris Matthews, Ed Schultz, or Cenk Uygur on MSNBC Tuesday, you might believe that (video follows with transcripts and lots of commentary):

CHRIS MATTHEWS, "HARDBALL": Time for tonight’s "Big Number." Federal tax rates, we’re not talking state and local here, of course, but they’re at an historic low, the federal rates are. If you measure taxes as a share the economy, when was the last time federal taxes were this low? 1950. That’s right. Americans are paying less in federal taxes now as a percentage of the economy than in 19 -- oh, in 1950, 60 years ago.

That’s tonight’s historic "Big Number," although nobody seems to be feeling it.

Matthews was followed by Keith Olbermann's defacto replacement Cenk Uygur at 6PM:

CENK UYGUR, "MSNBC LIVE": Americans are paying less in federal taxes than they did under President Bush. We’re going to expose the Republican on taxes tonight. [...]

UYGUR: Now, let’s take a look at what is really going on with taxes. I love doing this show, because I get to give you the real facts. For the third year in a row, Americans are paying less in federal taxes than they did under George W. Bush. Pause. Did you get that? You’re paying less taxes under Obama than Bush.

Income tax payments this year will be almost 13 percent lower than in 2008. Corporate taxes will be down by a third. In fact, as a percentage of the economy, taxes are at their lowers level since -- wait for it -- 1950. I don’t know if you know this, but that was 61 years ago. And taxes over the past couple of decades are nothing compared to what they were throughout most of the 20th century.

Today, the top marginal tax rate in America is 35 percent. Now, let’s put that in some sort of historical perspective. In 1944, the top tax rate was 94 percent, and it stayed at 91 percent or higher for a 13-year stretch from 1950 to 1963. Now, remember those are the years that a lot of people, including the conservatives, believe were the Golden Age of America. Now, even by the time Ronald Reagan was elected, the top tax rate was still at 70 percent.

Now, am I saying that I want taxes to be at 70 percent or 94 percent? No, I’m not saying that. Look, it hurts me to pay taxes, too. It hurts everybody. Nobody likes to do it, but we need some sort of balance here.

We can’t be at a 61-year low, and we also can’t be at 94 percent. But they don’t listen to reason. They’re like, no, cut it, cut it!

We’re at record lows. Should we stop cutting now? No, cut it!

OK. Come on. Balance the reason. Balance the reason.

That’s what we try to explain on this show. It hasn’t gotten through to the Republicans yet, but we’re going to keep trying.

Uygur then brought out America's only admitted socialist Senator Bernie Sanders of Vermont to predictably blame the declining tax revenues on the so-called rich not paying their “fair share.”

Unfortunately, neither Uygur nor Sanders explained exactly what this decline was - meaning that it was the combination of all federal income taxes paid by individuals and corporations as well as Social Security taxes as a percentage of the Gross Domestic Product - nor did they mention the drop was almost exclusively caused by a weak economy and high unemployment.

At 10PM came Ed Schultz:

ED SCHULTZ: Americans are paying less taxes than at any time since the ‘50s, but President Obama is still under attack for being a tax-and-spend liberal and for redistributing the wealth in America. [...]

SCHULTZ: This is the story that has me fired up. Tonight, we lead it of just reminding you: don’t ever let any Republican lie to you about President Obama. He is not a tax-and-spend liberal. Income tax payments are at a 60- year low and conservatives won’t give President Obama an ounce of credit, any credit at all. See? They want to defeat him.

The Republicans have created a tax narrative around this president right from the beginning.

(BEGIN VIDEO CLIPS)

SARAH PALIN (R), FORMER ALASKA GOVERNOR: He’s hiding his real agenda of redistributing your hard-earned money.

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: The American people are asking the question, where are the jobs? They’re not raising their hand and asking the question, can I pay higher taxes?

SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER: I think it is outrageous to suggest that raising taxes in the middle of a recession is a good idea.

NEWT GINGRICH (R), FORMER HOUSE SPEAKER: Raising taxes on the people who create jobs kills jobs and the American people know it even if the president doesn’t.

RUSH LIMBAUGH, RADIO HOST: He really believes his job is to return the nation’s wealth to its rightful, quote-unquote, "rightful" owners. And that means that he believes the people who have wealth have stolen it from those who have no wealth. It’s been unfairly achieved and accrued, and it’s his job to take it and redistribute it.

(END VIDEO CLIPS)

SCHULTZ: So, do you think they’re all on the same page? Let’s see. I started out saying that tax payments are at a 60-year low in this country. It’s the age of sacrifice. We just don’t want to make any sacrifices.

What those folks were saying right there, nothing could be further from the truth. Conservatives, listen very closely -- for the third year in a row -- in a row -- Americans will be paying less in taxes. 2010 federal revenues were 14 percent smaller than in 2008. Individual income tax revenues were 27 percent less in 2010 than in 2001, the first year of the Bush administration.

Now, individual income taxes as a percentage GDP have dropped from 9.7 percent in 2001 to 6.2 percent in 2010. Folks, that’s a 36 percent drop. Numbers haven’t been that low since World War II.

Now, to be fair, many of those numbers really are low due to the economy and the recovery and the record job losses that we’ve seen in this country, but President Obama has also made a habit out of cutting taxes, just what they wanted all along.

Add it all up, and in four of the six hours of MSNBC's extended prime time programming Tuesday, viewers were being badly misled about the taxes they're paying, assuming they pay any federal income taxes at all.

Let's be clear: total federal tax collections aren't really lower than they were in 1950. Americans are projected to pay $2.567 trillion in 2011 compared to only $39.4 billion in 1950.

Sound lower to you?

Now consider that if tax receipts had only grown at the rate of inflation over the last 60 years, we would have taken in only $356 billion last year, or 86 percent less. Put another way, tax receipts in the last 60 years have grown at greater than 6 times the rate of inflation.

Sound lower to you?

In reality, all this nonsense began with an Associated Press article published earlier in the day entitled "By One Measure, Federal Taxes Lowest Since 1950." See how much you recognize from the above transcripts (emphasis added):

Taxes too high?

Actually, as a share of the nation's economy, Uncle Sam's take this year will be the lowest since 1950, when the Korean War was just getting under way.

And for the third straight year, American families and businesses will pay less in federal taxes than they did under former President George W. Bush, thanks to a weak economy and a growing number of tax breaks for the wealthy and poor alike.

Income tax payments this year will be nearly 13 percent lower than they were in 2008, the last full year of the Bush presidency. Corporate taxes will be lower by a third, according to projections by the nonpartisan Congressional Budget Office.

The poor economy is largely to blame, with corporate profits down and unemployment up.

Notice that in the first five paragraphs, the AP mentioned the weak economy as being the culprit twice as well as high unemployment. Only Schultz addressed the economy and unemployment on Tuesday although largely as an aside.

But that's not all Matthews, Schultz, and Uygur missed, for the AP was far more honest with its report on this matter than these commentators (emphasis added):

In the next few years, many can expect to pay more in taxes. Some increases were enacted as part of President Barack Obama's health care overhaul. And many states have raised taxes because — unlike the federal government — they have to balance their budgets each year. State tax receipts are projected to increase in all but seven states this year, according to the National Council of State Legislatures.

But in the third year of Obama's presidency, federal taxes are at historic lows. Tax receipts dropped sharply in 2009 as the economy sank into recession. They have since stabilized and are expected to grow by 3 percent this year. But federal tax revenues won't rebound to pre-recession levels until next year, according to CBO projections.

In the current budget year, federal tax receipts will be equal to 14.8 percent of the Gross Domestic Product, or GDP, the lowest level since Harry Truman was president. In Bush's last year in office, tax receipts were 17.5 percent of GDP, just below their 40-year average.

The lack of revenue, combined with big increases in spending, means the federal government will have to borrow 40 cents for every dollar it spends this year. The annual federal budget deficit is projected to reach a record $1.5 trillion.

Not one of the MSNBC commentators explained all this. Not even close.

In fact, they completely ignored the spending side of the equation as well as the deficit, for that wouldn't have made the President they love so dearly look anywhere near as fiscally adroit.

Consider that total federal outlays in FY 2010 were 25.4 percent of GDP, the highest since 1945 while America was still fighting World War II as well as mired in the Depression. Our FY 2010 deficit was 10.6 percent of GDP, also the highest since 1945.

Also ignored by the MSNBC shills was that almost 50 percent of people in America don't pay any federal income taxes whatsoever. As AP reported last April:

Tax Day is a dreaded deadline for millions, but for nearly half of U.S. households it's simply somebody else's problem.

About 47 percent will pay no federal income taxes at all for 2009. Either their incomes were too low, or they qualified for enough credits, deductions and exemptions to eliminate their liability. [...]

In recent years, credits for low- and middle-income families have grown so much that a family of four making as much as $50,000 will owe no federal income tax for 2009, as long as there are two children younger than 17, according to a separate analysis by the consulting firm Deloitte Tax. [...]

The result is a tax system that exempts almost half the country from paying for programs that benefit everyone, including national defense, public safety, infrastructure and education. It is a system in which the top 10 percent of earners -- households making an average of $366,400 in 2006 -- paid about 73 percent of the income taxes collected by the federal government.

The bottom 40 percent, on average, make a profit from the federal income tax, meaning they get more money in tax credits than they would otherwise owe in taxes. For those people, the government sends them a payment.

It's of course not at all surprising MSNBCers didn't share this in their reports last night, especially Schultz and Uygur who predictably blamed the problem on supposed tax cuts for the rich. As the AP pointed out last year, "The bottom 40 percent, on average, make a profit from the federal income tax, meaning they get more money in tax credits than they would otherwise owe in taxes. For those people, the government sends them a payment."

This is why looking at total tax receipts as a percentage of GDP is misleading, for so many people today are not only not paying taxes, but are actually getting credits.

As such, for the small majority that are paying federal taxes for everyone's government to function - or dysfunction depending on how you look at it! - it's certainly no solace that the total of taxes received is lower as a percentage of GDP than it was 60 years ago especially given a 9 percent unemployment rate.

Let's be clear: although there were indeed some tax cuts - or, really, additional credits, deductions, and exemptions - that were implemented as part of 2009's stimulus package, the overwhelming majority of the decline in receipts from FY 2007 are due to a struggling economy and the number of people out of work thereby not paying into the system.

To suggest otherwise is either the height of stupidity or the height of dishonesty - or both.

In the end, it's this kind of negligent reporting that would get people suspended or fired if MSNBC executives weren't on board with the deception.

Maybe things will change as the new owners at Comcast take a better look at one of the divisions they just bought.

We can only hope.

Noel Sheppard
Noel Sheppard
Noel Sheppard, Associate Editor of NewsBusters, passed away in March of 2014.