CNN touted a study from the liberal Tax Policy Center claiming that Newt Gingrich's tax plan would increase the deficit. On Tuesday afternoon's The Situation Room, business correspondent Poppy Harlow simply labeled the Tax Policy Center "non-partisan" even though it is a joint venture of two liberal think tanks, the Urban Institute and the Brookings Institute.
CNN even reported the Gingrich campaign's claim that the study did not include "many details" of the plan because the campaign "does not recognize them as an independent arbiter of tax policy information." That bit of information was buried at the end of CNN's report, however. [Video below the break. Click here for audio.]
An ominous headline read "Gingrich Tax Plan A Windfall for Rich?" Poppy Harlow explained how the plan would be a "huge boon" for wealthy Americans and how it would add to the deficit, according to the analysis.
"Now what's also critical is that the Tax Policy Center says under the plan the government would take in $1.3 trillion less in revenue in the first year that this would be implemented," she declared, "So it's a huge decline in revenue that we would be taking in, Wolf."
Harlow added that the Gingrich campaign had dismissed the study. "So what they're saying basically is disregard this, this is not a fair analysis," she reported.
[Video below.]
A transcript of the segment, which aired on December 13 at 4:29 p.m. EST, is as follows:
WOLF BLITZER: Newt Gingrich's campaign is dismissing a new analysis of his tax plan. That analysis by the Tax Policy Center says Gingrich's proposals would provide huge tax breaks to the wealthiest Americans and increase the deficit. A Gingrich spokesman says the study doesn't take into account the economic growth and the new jobs his plan would create. Let's dig deeper right now. Poppy Harlow of CNNMoney.com. Poppy, what is Newt Gingrich proposing in this tax plan?
POPPY HARLOW, CNNMoney.com: Well it's interesting, Wolf. This isn't a new proposal. It came out in May from the Gingrich campaign, but because he is soaring in the polls – a Pew poll today showing him at 35 percent and topping that poll -- people are looking at this very carefully. That's exactly what the non-partisan Tax Policy Center has done.
Here's the crux of the plan. For you, your personal tax rate, you would have an optional flat tax of 15 percent. You would also get a $12,000 per person deduction, that's much more than we have right now. It would – and this is critical – eliminate the estate tax, and completely get rid of capital gains taxes. When you look at the corporate side, the corporate tax rate would decline significantly, from 35 percent to 12 and one-half percent. To give you some context, that would put the U.S. among the lowest tax rates among all industrialized countries. It would put the U.S. on par with Ireland, where you have a lot of corporations headquartering. You have a lot of pharmaceutical companies there for obvious tax reasons.
Now here's what the Tax Policy Center said about this plan. They said that it would mean that 70 percent of all Americans would pay lower taxes. And get this, for the wealthy Americans this is a huge boon. The Tax Policy Center says 99.9 percent of Americans that make more than a million dollars a year would pay lower taxes. Now they also said that when you take a look at millionaires under this plan, they would get about a 20 percent tax cut. If you look at regular folks, people making less than $100,000 a year, what the Tax Policy Center is estimating is the maximum tax cut they could see under this plan is about 3.1 percent.
Now what's also critical is that the Tax Policy Center says under the plan the government would take in $1.3 trillion less in revenue in the first year that this would be implemented. They're saying that would be 2015. When you look at that Wolf, and you look at the state of the economy and the massive deficit, it's a 35 percent reduction. So it's a huge decline in revenue that we would be taking in, Wolf.
BLITZER: What is Newt Gingrich's campaign, Poppy, saying about this analysis?
HARLOW: It's interesting. I talked to Peter Ferrara. He is Newt's economic policy advisor, he's not paid by the campaign, but he told me he's a longtime friend and advisor of Newt. He said, and this is a quote, "This plan is designed to maximize economic growth, jobs, wages, and incomes, not revenue neutrality."
This was also interesting. He went on to say look, the Tax Policy Center did not have the details of our plan. The campaign did not provide them with many details, because it does not recognize them as an independent arbiter of tax policy information. So what they're saying basically is disregard this, this is not a fair analysis. I asked Peter Ferrara for the details of the tax plan. He said they can't give them to us at this point in time, that the campaign will be releasing the details in a few weeks along with an independent analysis that they have underway. If you think about 9-9-9, Herman Cain's plan, they did a similar thing. They released an independent analysis, that's apparently what we're going to see from Newt's camp.
I do want to say one thing, Wolf. The person who led this analysis at the Tax Policy Center told our Charles Riley of CNNMoney that basically this is like Rick Perry's plan on steroids. Wolf?
