Palin vs PolitiFact on tax-cut expirations

Sarah Palin recently appeared on Fox News Sunday with Chris Wallace to discuss the expiration of the tax cuts from 2001 and 2003 — and got into a fight with Politifact.  They gave her a “pants on fire” rating for this exchange, in which she noted that the expiration of the cuts would amount to a $3.8 trillion tax hike:

“Let’s turn to the Bush tax cuts, which are also becoming a big issue, the Bush tax cuts for the wealthy,” said host Chris Wallace. “The Obama White House is now saying end the tax cuts. And these are the tax cuts for the top 2 percent of all households in America. You can save $678 billion, and it won’t hurt the recovery. Governor, if you’re serious, as you say you are, about the deficit, don’t you have to do something?”

“To reduce deficit spending and our enormous debt, you rein in spending,” Palin replied. “You cut the budget. You don’t take more from the private sector and grow government with it. … The Obama administration and the Democrats in Congress — they’re all wet on this idea. It’s idiotic to think about increasing taxes at a time like this.”

Wallace: ” But you know, they would argue, ‘Look, the economy did just fine during the Clinton years. The rates on the top 2 percent would be restored to what they were during the Clinton years.’ The Republicans keep talking about being deficit hawks. This is $678 billion you’re not going to pay for. They’re saying you’re being hypocritical. I say ‘you’ — I’m talking about Republicans.”

Palin: “Yeah. No, this is going to result in the largest tax increase in U.S. history. And again, it’s idiotic. And my palm isn’t large enough to have written all my notes down on what this tax increase will result in. Let me just go through a couple of things that I want people to be aware of, because, you know, the spin coming from Gibbs and the White House — you’re never going to get the truth out of their messaging. But Democrats are poised now to cause this largest tax increase in U.S. history. It’s a tax increase of $3.8 trillion over the next 10 years, and it will have an effect on every single American who pays an income tax. Small businesses especially will be hit hardest. …”

Politifact pounced on these claims:

What caught our attention for fact-checking purposes was her claim that the Democratic plan would result in “the largest tax increase in history.”

Wallace’s question was about letting the Bush tax cuts for the wealthy expire. President Barack Obama’s plan would increase income taxes for individuals making more than $200,000 and for couples making more than $250,000, with indexing for inflation. Wallace mentions that the Republican proposal to retain the tax cuts for the wealthy is “$678 billion you’re not going to pay for.” That’s a reasonable estimate of how much increasing taxes on top earners would generate over 10 years.

Well, there’s a problem with this argument, which is that Palin never mentioned a “plan” at all in her interview.  Why?  Because one doesn’t exist, as Politifact themselves acknowledged further into their scolding:

There are no formal congressional proposals yet to keep the Bush tax cuts in place, so we don’t have precise estimates from official sources like the nonpartisan Congressional Budget Office. Still, there’s a good bit of consensus on what the tax increases would look like, both if lower rates expired only for high earners and also for all incomes.

And there’s a big problem with this argument, which is that “consensus” means nothing without passing a bill, and especially not without proposing one first.  Thanks to Democrats in 2001 and 2003, those bills cutting the tax rates have hard-and-fast sunset provisions that create an expiration date absent of any other action.  We are now less than four months away from that expiration date after seven years of seeing it coming, after more than 3 years of Democratic control of Congress, and after eighteen months of the Obama administration.  Democrats don’t even have a proposal on the table yet, and the legislative calendar is rapidly shrinking to take action before the expiration date hits.  Without action, we will see a $3.8 trillion tax hike across the entire spectrum of earners.

Palin hits back from her Facebook platform:

First of all, they claim that there are Democrat proposals which would “keep the tax cuts for individuals who make less than $200,000 and couples who make less than $250,000.”

Unfortunately for PolitiFact, no such proposal exists. They admit as much, by the way, when they state that “There are no formal congressional proposals yet to keep the Bush tax cuts in place, so we don’t have precise estimates from official sources like the nonpartisan Congressional Budget Office.” That doesn’t stop them, though, from claiming I “confuse the issue” by “using numbers that assume all the tax cuts are going away. That is not the Democratic plan nor is it President Obama’s plan.”

Plan? What plan? There is no plan. All we have is smoke and mirrors based on an old Obama campaign pledge that if elected, he would exempt families making less than $250,000 a year from “any form of tax increases.” But this pledge was already watered before he was even elected. First vice-presidential candidate Joe Biden lowered it to $150,000. Then campaign surrogate Gov. Bill Richardson lowered it even further to $120,000.

A few months after the inauguration, even that last promise disappeared in a puff of smoke. When asked to reaffirm the White House’s commitment to the campaign promise of no tax increases for families earning less than $250,000, Obama’s spin doctor David Axelrod declared the President had “no interest in drawing lines in the sand.”

The truth is that as of today, Democrats haven’t taken any action to extend any part of the 2001 and 2003 tax cuts for any income group – and in this case doing nothing equals hitting American taxpayers with a massive $3.8 trillion tax increase.

Politifact blew this one.  They misleadingly claimed that Palin was discussing a specific plan, when none exists anyway, and which she was not, in fact, debating.  They used the nonexistent plan to claim that she was mischaracterizing it, which is an impressive feat of sophistry.  What Palin was doing was warning people of a massive tax hike that Democrats so far have passively led the US to the brink of realizing — and which will shortly become reality unless Congress takes action quickly to avoid.

When Democrats produce an actual plan, we’ll be glad to debate it.  Until then, the only item on the table is the comprehensive expiration of the cuts, which will produce the effect Palin accurately described.

Update: I wrote “sunshine” provisions, when I meant “sunset” provisions. I’ve made the correction above.

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