CNN: 'Is It Time for the GOP to Blink When It Comes to Tax Hikes?'

According to a USA Today analysis, Americans are paying a lower percentage of income tax rates now than in the 1970s-1990s - and CNN's Jack Cafferty used this fact Monday to ask if raising taxes should be the first priority in Congress's deficit reduction plan. He hinted that the Treasury could use the extra revenue from higher taxes.

Then on Tuesday, CNN Anchor Carol Costello continued the talking points on the 10 a.m. and 12 p.m. EDT news hours, asking if it is time "for the GOP to blink" on the tax hike standoff. "[Obama] toppled Osama bin Laden. But can he slay the budget dragon? Not without striking a deal with this guy, House Speaker John Boehner," Costello ominously declared.

In his coverage of the tax debate, Jack Cafferty reported that if the older tax rates were re-established, the increased revenue would amount to $500 billion. He hinted that the extra money could help the country in its deficit dilemma, regardless of what the two sides of the argument say. "Either way, you gotta wonder what this country could do with an extra $500 billion right about now," he mused.

Cafferty also made sure to separate "conservative groups" from "deficit reduction advocates" in the debate, as though the two groups cannot be interchangeable.

On Tuesday, Carol Costello tried to paint the Republicans into a corner on the issue. She referenced "many economists" who don't believe tax hikes necessarily hurt job creation, and proposed that Republians won't raise taxes because they are haunted by President George H. W. Bush's broken promise of "no new taxes." She added "But that was then and this is now."

Regardless, CNN's coverage leaves out a significant fact, one that could have been drawn from the same newspaper as the analysis reported by Cafferty. A 2010 USA Today article reported that nearly half of American households paid no income taxes for 2009. Other sources report the same for this past April 15.

Due to credits, reductions and exemptions in tax laws, 45 percent of households paid no income tax for 2010, and for 2009 47 percent of households paid no income taxes.

All eyes are on tax hikes for the wealthy brackets as a source of revenue to pay down the deficit. The majority of Americans favor such a policy. But the number of households exempt from paying federal income taxes is largely unnoticed in the debate, as well as the possible revenue increase that could result if they pay taxes.

"Tax cuts enacted in the past decade have been generous to wealthy taxpayers too, making them a target for President Barack Obama and Democrats in Congress. Less noticed were tax cuts for low- and middle-income families, which were expanded when Obama signed the massive economic recovery package last year," reported the USA Today in 2010.

A transcript of the segments is as follows:



5:15 p.m. EDT

JACK CAFFERTY, CNN contributor: Wolf, Americans are paying the smallest share of their income in taxes since 1958, 23.6 percent, according to an analysis that was done for USA Today. During the 1970s, 1980s and 1990s, Americans spent about 27 percent of their income on taxes. If we were paying that amount now, $500 billion in additional taxes would be collected each year - $500 billion. That's about a third of this year's projected federal deficit.

Now, conservative groups are quick to point out that this fall in tax revenue is due to a weak economy and not just lower tax rates or tax breaks, and they have a point, to a point. Deficit reduction advocates disagree, though. Either way, you do have to wonder what the country might be able to do with an extra $500 billion right about now. The report comes as President Obama plans to meet with Democrats and Republicans separately over the next few weeks to talk about reducing the deficit. Senate Democrats are due to go to the White House this Wednesday, Republicans follow on Thursday. House Democrats and Republicans will go in the next few weeks. Last December, a Deficit Reduction Committee created by President Obama recommended cutting spending and eliminating tax breaks in order to trim nearly $4 trillion from the deficit over the next decade. So far, all of their recommendations have been ignored.

President Obama came out with his own plan last month that calls for $2 in spending cuts for every $1 in tax increases. Republican Congressman Paul Ryan came up with a 10-year, $4.4 trillion plan, calling for spending cuts and the overhaul of Medicare but doesn't mention raising taxes, at all. We're still waiting for a third deficit reduction plan from the so-called gang of six, a bipartisan group of six senators. We're still not sure what that's going to look like.

So, the question is this, should raising taxes be more of a priority than cutting spending? Go to and post a comment on my blog.

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11:06 a.m. EDT

DREW GRIFFIN, CNN anchor: Well, here's your chance to "Talk Back" on one of the big stories of the day. Today's question: Should the GOP reconsider their stand on raising taxes?

Carol Costello joins us with more in D.C. - Carol.


CAROL COSTELLO, CNN correspondent: Oh, maybe it is time. President Obama did the unthinkable. He toppled Osama bin Laden. But can he slay the budget dragon? Not without striking a deal with this guy, House Speaker John Boehner.


REP. JOHN BOEHNER (R-Ohio), House Speaker: The mere threat of tax hikes creates more uncertainty for job creators and more uncertainty that results in less risk-taking and fewer jobs. So we're serious about balancing the budget and getting our economy back to creating jobs. Tax hikes should be off the table.


COSTELLO: Many economists say tax hikes don't necessarily hurt job creation. History shows job creation depends on a variety of economic factors. So why isn't there some wiggle room on raising taxes then? Could it be because of this-


GEORGE H. W. BUSH, President of the United States: Read my lips: no new taxes.


COSTELLO: That cost George H. W. Bush a second term, possibly, but that was then and this is now, as they say. A recent poll shows some 70 percent favor tax hikes on wealthy Americans to help cut the deficit, including a majority of Republicans.

Still, Speaker Boehner is talking tough. Norm Ornstein of the American Enterprise Institute calls it a risky strategy, appealing to GOP hard-liners, but making it harder to reach a deal.

So, the "Talk Back" question today: Is it time for the GOP to blink when it comes to tax hikes?

- Matt Hadro is a News Analyst at the Media Research Center.