12 things for state legislators to do
From time to time I have been accused of only ever offering criticisms of what is wrong with Minnesota’s economy and the state’s economic policy and of failing to offer…
One of the new media fashions is to put the phrase ‘Fact Check’ or some variation of it into the title of a piece. This is meant to tell you that you are getting the pure, unadulterated facts. But, too often, these ‘Facts Checks’ are nothing of the kind. Rather, they are opinion pieces — sometimes wrong — masquerading as the pure, unadulterated facts. Minnesota’s media provided two examples of this recently.
FOX 9 ran an item last Friday titled ‘Fact check: $740 billion climate and health bill will raise taxes, just not as GOP says.’ What is the fact being checked here?
Democrats pay for their climate initiatives through two tax increases on businesses. This week, U.S. Rep. Tom Emmer of Minnesota referred to the tax hikes as a “shell game” that will hurt working people.
“The average American doesn’t need a college education, doesn’t need a PhD or a masters to understand you’re talking about taxing a corporation which will pass that right on to you, the consumer,” Emmer said on a University of Minnesota forum. “Everybody [making] over $30,000, $30,000 and over, is going to pay more taxes because of what they’re doing.”
Not so, say the impartial fact checkers at FOX 9: “The bill does not raise individual income taxes – on anyone making $30,000 or otherwise.”
On Monday, KARE 11 ran an item titled ‘No, the Inflation Reduction Act does not raise taxes on the middle class‘ which repeated much the same talking points:
The bill raises taxes on corporations in a couple of big ways. But it does not raise taxes on individuals. Nowhere in the text does it mention income tax or any other kind of tax assessed on people, just companies.
This is both correct and misleading at the same time.
While it is true that the Inflation Reduction Act — and it is telling that FOX 9 has adopted the Democrats’ re-branding of this as a ‘climate and health bill’ — doesn’t increase individual income taxes it does increase corporate taxes and research finds that workers bear between 50% and 100% of the burden of the corporate income tax, with 70% or higher the most likely outcome. Indeed, even the Minnesota Department of Revenue finds that for state corporate tax hikes:
…46% of the burden of this increase falls on Minnesota’s consumers in the form of higher prices and 27% falls on our state’s workers in the form of lower wages and employment opportunities. None of the burden falls on capital in the form of lower dividends.
Nobody thinks that hikes in cigarette taxes are swallowed by cigarette companies: they are, instead, passed onto smokers in the form of higher prices (which is exactly why the Minnesota Department of Revenue finds such hikes regressive). The same is true for corporate tax hikes.
This is why, as I wrote recently:
The nonpartisan Joint Committee on Taxation estimates the bill will hike taxes for every income bracket, with more than half of the tax increases on people making less than $400,000 per year – the very people President Biden has repeatedly said he won’t raise taxes on. Indeed, the Inflation Reduction Act – which won’t reduce inflation, remember – will increase taxes by over $16.7 billion in 2023 for households with income under $200,000.
It is why, as the New York Post reports:
An analysis by the [Congressional Budget Office] estimates those earning less than $400,000 — the group on which Biden promised not to raise taxes — will pay an estimated $20 billion more in taxes over the next decade as a result of the Democrat-pushed $740 billion package, which also sets aside $80 billion to hire 87,000 IRS agents.
Strangely, those claiming to offer the pure, unadulterated facts make no mention of these analyses whatsoever.
Rep. Emmer is right, the Inflation Reduction Act will raise middle class taxes — without reducing inflation — and FOX 9’s ‘Fact Check’ is wrong, as is KARE 11’s. They should apologize.
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