WaPo gives Biden 4 Pinocchios

The Washington Post Fact Checker gave former Vice President Joe Biden four Pinocchios for claiming that only the rich got the Trump tax cuts.

“There’s a $2 trillion tax cut last year. Did you feel it? Did you get anything from it? Of course not. Of course not. All of it went to folks at the top and corporations.” — Biden, in a campaign rally in Pittsburgh, 29 April 2019

That may be effective on the campaign trail, but the Post notes that it is blatantly false.

Technically, the tax cut signed into law by Trump had an estimated revenue loss of a little under $1.5 trillion over 10 years. So Biden is rounding up here, though one could get the figure up to $2 trillion if you include the cost of additional interest on the national debt or the cost of extending tax cuts that expire (more on that later).

But the biggest problem is Biden’s sweeping declaration that “all of it went to folks at the top and corporations that pay no taxes.”

That’s simply wrong.

As we have explained before, any broad-based tax cut is going to mostly benefit the wealthy because they already pay a large share of income taxes. According to Treasury Department data, the top 20% of income earners paid 95.2% of individual income taxes in 2017. The top 10% paid 81%. The top 0.1% paid an astonishing 24.1% of taxes.

Because there are far more people in the middle class, there are fewer dollars to share per taxpayer when the savings from a tax cut are divvied up. The nonpartisan Joint Committee of Taxation estimates that 572,000 taxpayers will file returns with an income category of more than $1 million, compared with more than 27 million in the $50,000 to $75,000 category and almost 70 million in the under-$50,000 category.

If the wealthy end up with more money because they pay more in taxes, that’s not necessarily a fair way to look at tax legislation. The top 1% in 2014 earned 20% of adjusted gross income and paid nearly 40% of federal taxes, according to the Tax Foundation. The Tax Policy Center estimates that in 2018, the top 1% would get 20.5% of the tax cuts.

Moreover, when both the Joint Tax Committee and the Tax Policy Center looked at the impact of the tax bill, they concluded that in 2018, most people would see an overall reduction in taxes. The Tax Policy Center found that 80.4% of all taxpayers would have a tax cut, compared with about 5% experiencing a tax increase. In the middle quintile, 91% would get a tax cut, averaging about $1,090, with 7.3% facing a tax increase averaging about $910.

In terms of just individual tax cuts — which we should consider given that Biden was addressing union workers and other campaign supporters — the Tax Policy Center found 65% of taxpayers would get tax cuts. In the $50,000 to $75,000 range, 82% would get tax cuts, with people who got a tax cut ending up with an average of almost $1,000.

About 80% making more than $1 million would receive an average $75,000 tax cut, according to the Tax Policy Center, but as we noted they already pay a lot in taxes. (And 20% of that group ended up with an average tax hike of almost $100,000.)

One of the misperceptions of the tax cut is that because tax refunds have been relatively flat when compared to last year that most people didn’t get a tax cut without taking into consideration the adjustment in the tax withholding tables which added roughly $25 per week to the average paycheck — a point the media rarely mentions.

The Post contacted the Biden campaign and received the standard line about the tax cuts being a giveaway for the wealthy and big corporations and gave Biden the maximum four Pinocchios for misstating the facts.

“As he told the Teamsters Local 249 yesterday, Joe Biden is committed to reversing the Republican tax plan because it is overwhelmingly a giveaway to the wealthy and big corporations that hard-working families can’t afford,” said spokesman Andrew Bates. “Forty percent of Americans can’t withstand a $400 emergency and 60% of our largest corporations are paying no taxes at all, which is exactly why Joe Biden is fighting to rebuild the middle class and ensure that we reward work — not just wealth.”

This is a good example of how precise words and context matter in a fact check. We’ve previously given Democrats and Republicans two Pinocchios for failing to make clear whether they are talking about the long-term or short-term tax-cut estimates for the law. But Biden, with his loose language, ends up in the four-Pinocchio territory. He asserts that no Americans but those at the top received any tax cut in 2018, which is clearly false.

Most Americans received a tax cut. They may not have noticed it, but that’s no excuse for saying they never got one.

The Post wasn’t the only one calling out Biden for his false claim. CNN’s Jake Tapper working with FactCheck.org also concluded that most people received tax cuts.

From the AIM Syndicate, 4455 Connecticut Ave., N.W., Ste. 330, Washington, DC 20008; www.aim.org