ABC's Tapper joins media advancing small business falsehood

Original Link: http://mediamatters.org/items/200902270005

Summary: ABC News' Jake Tapper, CNN's Dana Bash, and Fox News' Sean Hannity advanced the falsehood that President Obama's plan to allow the Bush tax cuts to expire for wealthy taxpayers would cause a large percentage of small businesses to pay higher taxes. In fact, according to the Tax Policy Center, just 2 percent of tax returns that reported small business income in 2007 are in the top two income tax brackets, which include all filers with taxable incomes that would be affected.

After President Barack Obama released his budget, which includes provisions allowing the Bush tax cuts to expire for wealthy taxpayers, ABC News' Jake Tapper, CNN's Dana Bash, and Fox News' Sean Hannity advanced the falsehood that those provisions would cause a large percentage of small businesses to pay higher taxes. In fact, according to the Tax Policy Center's table of 2007 tax returns that reported small business income, 481,000 of those returns -- about 2 percent -- are in the top two income tax brackets, which include all filers with taxable incomes that would be affected.

During the February 26 edition of ABC's World News, Tapper reported, "Almost $1 trillion of the spending, $989 billion, comes from new taxes over the course of the next 10 years, starting in 2011 -- most of them targeted at families earning more than $250,000 a year." Tapper later reported that "President Obama would push an additional $353 billion in new tax hikes on businesses," and aired Sen. Judd Gregg's (R-NH) assertion that, "So, if you've got a restaurant or you have a small business, then you're getting hit now with a tax rate that's gonna jump from 35 percent up to 41 percent," suggesting that all small businesses would face a tax increase under Obama's proposal to let the top marginal income tax rate increase from 35 percent to 39.6 percent as scheduled.

During the February 26 edition of CNN's Lou Dobbs Tonight, Bash uncritically reported that "couples making $250,000 a year and individuals making $200,000 will see their tax rate go up from 36 percent to 39.6 percent" and that "Republicans standing on the other side of a deep philosophical divide argue it will cripple small business owners."

During the February 26 edition of his Fox News show, Hannity claimed that "when [Obama] talks about this top 2 percent that he's gonna tax, well, that's 80 percent of small business owners in America."
In fact, as Media Matters for America has repeatedly documented, the Tax Policy Center has estimated that a mere 2 percent of tax returns reporting small business income in 2007 earned enough income to be affected by the expiration of the Bush tax cuts on individuals earning more than $200,000 per year and families earning more than $250,000 per year -- not 80 percent. Neither Tapper nor Bash noted the percentage of small business owners earning enough income to be affected in their reports.

From the February 26 broadcast of ABC's World News with Charles Gibson:

OBAMA: I don't think that we can continue on our current course. I work for the American people, and I'm determined to bring the change that the people voted for last November.

TAPPER: That change begins with new priorities, such as $770 billion in tax cuts over the next 10 years for the middle class, $150 billion for alternative energy sources, and $634 billion for a health-care reserve fund to pay for whatever health reform Congress devises.

HOUSE SPEAKER NANCY PELOSI (D-CA): You're never going to reach the place you need to be in terms of fiscal responsibility unless you reform health care.

TAPPER: Much of the spending is being done with money the government does not have, creating a $1.75 trillion deficit next year alone.

HOUSE MINORITY LEADER JOHN BOEHNER (R-OH): The president's beginning to make President Bush look like a piker when it comes to spending.

TAPPER: Almost $1 trillion of the spending, $989 billion, comes from new taxes over the course of the next 10 years, starting in 2011 -- most of them targeted at families earning more than $250,000 a year. These individuals face $636 billion in new taxes.

That includes $338 billion from letting the Bush income tax cuts expire, but also an increase in the capital gains tax and a lowering of the deduction for charitable giving -- a tax hike budget director Peter Orszag disagreed would discourage giving.

ORSZAG: The recovery itself will provide a strong boost not only to charities, but to the overall economy and to the people who contribute to charities.

TAPPER: President Obama would push an additional $353 billion in new tax hikes on businesses.

ROBERT GIBBS (White House press secretary): The president doesn't believe that the changes that are being made would hinder economic growth.

TAPPER: On Capitol Hill, President Obama's former commerce secretary nominee, New Hampshire Republican Senator Judd Gregg, disagreed.

GREGG: So, if you've got a restaurant or you have a small business, then you're getting hit now with a tax rate that's gonna jump from 35 percent up to 41 percent. Well, where do you pay for that? You lay people off.

[end video clip]

TAPPER: One other interesting note: The budget has what the administration calls a placeholder for additional funds to bail out banks or financial institutions, up to $750 billion worth, Charlie. Just in case.

From the February 26 edition of CNN's Lou Dobbs Tonight:

BASH: Congressional Democrats are especially eager to fulfill a major campaign promise: pay for their priorities by repealing President Bush's tax cuts for the wealthiest Americans. For example, couples making $250,000 a year and individuals making $200,000 will see their tax rate go up from 36 percent to 39.6 percent. That would get the government an estimated $310 billion.

PELOSI [video clip]: It's about ending a tax -- a cut that should not have been there in the first place -- that contributed enormously to our deficit.

BASH: But Republicans standing on the other side of a deep philosophical divide argue it will cripple small business owners.

REP. PAUL RYAN (R-WI) [video clip]: The notion that you raise taxes on the people who are most likely to create jobs in a recession -- it just boggles our mind that they would actually try and pursue this sort of an economic agenda at this very time.

BASH: Republicans are also blasting the president's budget for not doing enough to cut spending.

From the February 26 edition of Fox News' Hannity:

HANNITY: What do you make of this aspect though of it, Governor, and that is that when he talks about this top 2 percent that he's gonna tax, well, that's 80 percent of small business owners in America. Eighty percent -- the top 2 percent -- that's 80 percent of businesspeople. How is that going to impact them, and how does that impact jobs?

MITT ROMNEY (Former Massachusetts governor): Well, I think there's a general misunderstanding on the part of some people in Washington. They presume that jobs just happen, that the economy just happens, that businesses just grow and thrive on their own. But they have to have an environment where that's possible.

—J.H.