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Video: FactChecking Virginia Race

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In a segment that appeared on NBC4 in Washington, D.C., FactCheck.org Director Eugene Kiely discusses TV ads in the Virginia governor’s race that criticize Lt. Gov. Ralph Northam for his role on a state economic development board.

The ads say Northam missed 58 percent of the Virginia Economic Development Partnership meetings, but ignores the fact that Northam sent a representative to the board meetings when he did not attend. Northam was an ex officio member of the board and sits on 13 other boards.

The ads also say Northam “helped lead Virginia’s economic development agency that gave $1.4 million to a Chinese company with a fake website.” However, the board does not approve grants, which are recommended by the agency’s professional staff and approved by the governor.

This video is part of FactCheck.org’s partnership with NBCUniversal Owned Television Stations, a division of NBCUniversal, to produce fact-checking segments for local NBC stations. Our stories about the Virginia governor’s race can be found on our website. These ads were aired by the campaign of Republican candidate Ed Gillespie.

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Trump Exaggerates ‘Small Business’ Tax Cuts

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President Donald Trump exaggerates when he describes a reduction in the top marginal rate for pass-through business income as a boost to small businesses and truckers.

  • The president claimed that “more than 30 million” small-business owners would get “a 40 percent cut in their marginal tax rate.” But only 670,000 taxpayers who report business income would earn enough to get that rate reduction.
  • Trump said “many American truckers who file taxes as sole-proprietors, S corporations or partnerships” will pay a “substantially lower” top tax rate. Truck drivers, or any other business owner, would have to earn more than $91,900 in taxable income to get a lower top tax rate, and more than $418,400 to see the kind of benefit Trump described.

Trump has made his claim about 30 million small businesses several times, including in a speech at the Heritage Foundation on Oct. 17. And he made claims about both small businesses and truck drivers in an Oct. 11 speech in Harrisburg, Pennsylvania, to a crowd that included workers in the trucking industry.

Trump, Oct. 17: And for small businesses that file taxes as sole proprietors, S corporations, or partnerships, we will cap the top tax rate at a maximum of 25 percent. … For the more than 30 million American small businesses in America, our plan cuts their top marginal rate by about 40 percent.

Trump, Oct. 11: For the many American truckers who file taxes as sole-proprietors, S corporations or partnerships, we will cap your top tax rate at a maximum of 25 percent — substantially lower than what you’re paying now. The more than 30 million Americans who have small businesses will see — listen to this — a 40 percent cut in their marginal tax rate — 40 percent. I wouldn’t want to be a politician against that. They’re going to have a long, hard winter.

Lowering the top tax rate for pass-through business income to 25 percent is part of the Republican tax framework that the White House and GOP leaders negotiated.

Businesses that are organized as sole proprietorships, limited liability companies or S corporations don’t pay corporate income tax. Instead, the business income is “passed-through” to the owners or partners, who pay individual income taxes on the earnings.

The top individual income tax rate is 39.6 percent, so capping the rate at 25 percent for those paying pass-through taxes on their businesses’ income would be a substantial savings for some — a reduction in the top rate of 37 percent. But as the Tax Foundation said in a fact sheet on this issue, lowering the top rate “would only benefit pass-through business owners in the highest tax brackets.”

And there are nowhere near 30 million pass-through business owners in the highest tax brackets.

Trump also made the false claim that small businesses would be getting “a 40 percent tax cut,” when he used the talking point on Oct. 18 before a White House meeting with the Senate finance committee. It’s a cut in the top marginal rate, as he has phrased it before, not a 40 percent drop in the amount of taxes paid.

How Many Small Businesses Get a Cut?

Most businesses in the United States are organized as pass-through entities. A 2012 Congressional Budget Office report shows that about 70 percent of businesses were sole proprietorships and 20 percent were partnerships, LLCs and S corporations in 2007. Only 6 percent were C corporations, paying corporate income taxes.

And as of 2011, pass-through entities earned most of the business income — 54.2 percent of it, a 2015 paper by several experts with the Treasury Department and National Bureau of Economic Research found.

But relatively few with pass-through business income could get the 40 percent rate cut the president touted.

We asked the White House press office for the source of Trump’s 30 million figure for “small businesses,” and we did not get a response. But 30 million would be every business in the country, according to the Small Business Administration.

Trump’s claim fits a pattern of politicians making claims about “small businesses” and using broad and exaggerated numbers.

The SBA says in a 2016 fact sheet that there are 28.8 million total “small businesses.” The SBA’s definition of small business is any business with fewer than 500 employees. So the 28.8 million figure is actually 99.7 percent of all businesses in the country, the SBA says.

Most of those small businesses are indeed small: Twenty-three million are nonemployer firms, meaning they have no paid employees. But nonemployer firms include any reporting $1,000 in business income or more. That would include an unknown number of people who earn some business income on the side or from hobbies.

Many taxpayers reporting some business income “don’t have businesses at all,” Frank Sammartino, a senior fellow at the Tax Policy Center, wrote this year in a brief on this issue. “Rather, they may receive occasional income from the rental of a vacation home, or from the sale of odds and ends on eBay, that they report as business income. A 2011 Treasury study estimated that only about half of those who filed a sole proprietorship tax return really ran a business.”

According to the SBA, most of the self-employed don’t earn anywhere near the $418,400 and more needed to get a 40 percent tax rate cut. The SBA says that the median income for the self-employed at incorporated businesses was $49,204 in 2014. For those at unincorporated firms, the median income was $22,209.

How many “small-business” owners earn enough to fall in the top marginal tax bracket and get that 40 percent rate cut? It’s difficult to say precisely, but the figure for 2017 would be at most 670,000 taxpayers — a fraction of the 30 million Trump claimed.

Overall, there are 38 million taxpayers reporting some kind of business income, but 86 percent of them are in the 25 percent tax bracket or below, according to a table on the distribution of pass-through business income from the nonpartisan Tax Policy Center.

In the top tax bracket for 2017, there would be 670,000 taxpayers with business income. That’s most, or 72.8 percent, of all taxpayers in the top bracket. But not all of them are “small businesses.”

Only 30 percent of the taxpayers in that bracket would report business income that makes up more than half of their adjusted gross income. Pass-through business income reported on individual tax returns includes consultancy work someone might do on the side, book royalties or income from renting a house to tenants — as well as pass-through income from actual brick-and-mortar shops. So not all taxpayers reporting business income are what one might think of as a small business, as Sammartino explained.

Upper-income taxpayers report most of the pass-through business income.

“Households making $200,000 or more account for nearly 80 percent of business income reported on individual income tax returns, and those making $500,000 or more account for 60 percent,” Sammartino wrote. “Among those making $1 million or more, 80 percent report business income averaging more than $810,000, and more than 25 percent generate at least half their adjusted gross income that way.”

Trump’s claim about a 40 percent rate cut applies only to those in the top income tax bracket, and they don’t number even 1 million, let alone 30 million.

Marginal Tax Rates

What about the “many American truckers who file taxes as sole-proprietors, S corporations or partnerships”? Would a 25 percent rate be “substantially lower” than what they’re paying now, as Trump said?

That depends on their income. There may be trucking company owners or other high-paid positions that could benefit from a 25 percent pass-through rate. But most truck drivers already fall in the 25 percent bracket, or below, according to median income figures.

Here are the individual income tax brackets for 2017 for a single person and a married couple filing jointly, as set by the IRS. (These are marginal rates, meaning the first $9,325 of any single person’s taxable income is taxed at 10 percent, with income above that taxed at the corresponding marginal rate. Also note that taxable income would be gross income minus standard or itemized deductions.)

The median pay of heavy and tractor-trailer truck drivers in 2016 nationwide was $41,340, according to the Bureau of Labor Statistics. That means half made under that amount and half made more. The high-end pay was $63,140 — that’s the start of the top 10 percent of earners for truck drivers.

But those statistics come from a survey of employers, and they don’t include the self-employed.

We contacted the Owner-Operator Independent Drivers Association, which was founded in the early 1970s and says it has more than 150,000 members. The group conducts surveys of its members by mail and typically gets about 1,000 responses, Norita Taylor, director of public relations and marketing, told us. Eighty-five percent of respondents say they are sole proprietors, LLCs or partnerships. The average net income, after taxes, has been $43,320, Taylor said, according to the surveys from 1998 to 2016.

That would put the pretax average income above the BLS figures. But even a doubling of that net figure still falls within the current 25 percent tax bracket.

A truck driver, or other worker in the trucking industry, would have to earn more than $91,900, or $153,100 as a married couple, in taxable income to have any income taxed at a higher rate.

Some in the industry likely do earn more. Back in 2011, CNN Money did a story on “surprise six-figure salaries” that included a 37-year-old semi-truck mover earning $160,000 in Duluth. A single person earning that today would be in the 28 percent marginal tax bracket.

The American Trucking Associations, a national trade group that joined Trump in Harrisburg and backs his tax plan, sent us driver compensation figures showing that median pay varied based on the type of vehicle. The group’s compensation survey showed median pay for 2013 at about $56,000 for a refrigerated truck and about $73,000 for a private van, the highest figure on the chart. Those median figures don’t rise above the 25 percent tax bracket.

ATA says that about two-thirds of trucking firms pay pass-through taxes. And, of course, some could be among those 670,000 taxpayers in the top bracket, or the 300,000 taxpayers in the 33 percent or 35 percent brackets, reporting business income. A 25 percent top marginal rate would be “substantially lower” than what those taxpayers are paying now.

But the data on truck drivers’ income show most wouldn’t see a cut in their top marginal tax rate, despite Trump’s claim that “many American truckers” will.

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San Juan Mayor Wasn’t Impeached

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Q: Has Carmen Yulín Cruz, the mayor of San Juan, Puerto Rico, been impeached?

A: No. That claim was made by a self-described “satirical publication.”


San Juan Mayor Carmen Yulín Cruz, who has had a public feud with President Donald Trump over the federal response to Hurricane Maria, is not being impeached.

A website called Daily Feed News published a story with the headline: “San Juan City Council Votes Unanimously to Impeach Trump-Hating Mayor.” The story claims that Cruz was to blame for problems with the distribution of hurricane relief supplies to the rest of the island, and was being removed from office because of it.

That’s not true. Daily Feed News describes itself as a “satirical publication,” and says in a disclaimer: “We present fiction as fact and our sources don’t actually exist.”

That didn’t stop other websites — like libertyinfo.net and anews-24.com — from posting the same story as though it were real news, regardless of the fact that its claims can’t be substantiated.

For example, the story says that the city council in San Juan held an emergency meeting on Oct. 12 to “initiate impeachment proceedings which begin on Monday.” But no such meeting was noted on the council’s calendar, and nothing was scheduled for Oct. 16, when the proceedings were alleged to start.

There wouldn’t even be a need for a meeting of the city council, since, according to the law that governs how Puerto Rico’s 78 municipalities operate, anyone can file charges to remove a mayor from office with the Commission to Air Municipal Complaints, a state agency.

The story, which was flagged by Facebook users as being potentially fabricated, also falsely says that the U.S. isn’t required to provide Puerto Rico with disaster relief.

Puerto Rico has been a U.S. commonwealth since its constitution was approved in 1952, and people born there have been U.S. citizens since President Woodrow Wilson signed the Jones-Shafroth Act in 1917.

Plus, the Stafford Act, which regulates the administration of disaster relief, treats Puerto Rico — along with the District of Columbia, Guam, the Virgin Islands, American Samoa and the Northern Mariana Islands — the same as the 50 U.S. states.

Editor’s note: FactCheck.org is one of several organizations working with Facebook to help identify and label viral fake news stories flagged by readers on the social media network.


Trump, Donald. Tweet. 30 Sep 2017.

San Juan City Council Votes Unanimously to Impeach Trump-Hating Mayor.” DailyFeed.News. 12 Oct 2017.

Disclaimer. DailyFeed.News. Accessed 16 Oct 2017.

San Juan Municipal Legislature. Calendar. Accessed 16 Oct 2017.

Autonomous Municipalities Act of the Commonwealth of Puerto Rico. 30 Aug 1991.

Joint Resolution approving the the Constitution of the Commonwealth of Puerto Rico. U.S. Government Publishing Office. 3 Jul 1952.

Jones Act. Library of Congress. Accessed 17 Oct 2017.

Robert T. Stafford Disaster Relief and Emergency Assistance Act. Federal Emergency Management Agency. Accessed 17 Oct 2017.

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Seahawks Players Didn’t Burn Flag

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Q: Did players for the Seattle Seahawks burn the American flag?

A: No. A widely circulated picture was altered to make it look that way.


Seattle Seahawks — Did they burn the American flag?


False stories claiming that Seattle Seahawks players burned the American flag surfaced online after President Donald Trump called on National Football League team owners to fire players who don’t stand during the national anthem before games.

One story Facebook users flagged as potentially fake news says that Seahawks defensive end Michael Bennett “was captured on camera burning an American flag” while the team remained in the locker room for the national anthem prior to a game against the Tennessee Titans on Sept. 24. A headline on another post says that another Seahawk, “NFL Player Richard Sherman, Who Burned U.S Flag, Has Been Thrown Out From The Team.”

The Bennett story was based on a photo that was altered to show him holding a burning U.S. flag in a locker room as his teammates, including Sherman, looked on.

Sherman has not been released from the team. In fact, he was recently featured in an Oct. 13 post on the Seahawks’ website about him visiting a young fan in the hospital.

The fake image of Bennett was first shared on the Facebook page of Vets for Trump in late September. The post, which the group took down, was up for two days and was shared 10,000 times, Vladimir Lemets, the social media director for Vets for Trump, told FactCheck.org.

The group later shared a link to an article admitting that the picture wasn’t real, but arguing that it “was an accurate metaphor for what the NFL is doing to America.”

Weeks after the bogus photo went viral, our readers are still asking about it.

For the record, the Seahawks posted the original, unedited picture on the team’s official Twitter account on Jan. 3, 2016. It shows Sherman (No. 25) and other Seattle players and coaches watching as Bennett does “a now-traditional post-victory dance” after a win against the Arizona Cardinals. There was no flag involved in the celebration.

Bennett is among several players who has silently demonstrated at games during the national anthem. He said at the start of the current NFL season that he would sit for the anthem in order to raise awareness about racism and intolerance.

Sherman, on the other hand, has said that he doesn’t agree with Bennett and other players who don’t stand during the anthem. Sherman said their message is important, but it is getting lost in the controversy over the anthem.

Editor’s note: FactCheck.org is one of several organizations working with Facebook to help identify and label viral fake news stories flagged by readers on the social media network.


Washington Post. “Trump’s full speech in support of Luther Strange in Alabama.” YouTube video. 26 Sep 2017.


Vets for Trump. Facebook.com. Accessed 13 Oct 2017.

Dillingham, Thomas. “The Image Is Photo-shopped, But Veterans Agree, It Is An Accurate Metaphor For What The NFL Is Doing To America.” NationOneNews.com. 10 Oct 2017.

Seattle Seahawks Twitter feed. 3 Jan 2016.

Wyche, Steve. “Michael Bennett on why he will continue to sit during anthem.” NFL.com. 14 Aug 2017.

Wisniewski, Lindsey. “All Seahawks players stand during the national anthem against Rams.” USA Today. 8 Oct 2017.

BREAKING: NFL Player Richard Sherman, Who Burned U.S. Flag, Has Been Thrown Out From The Team. Do You Support This?” StateFort.com. Accessed 16 Oct 2017.

Condotta, Bob. “‘It’s bigger than sports:’ Why the Seahawks decided to stay in the locker room during Sunday’s anthem.” Seattle Times. 24 Sep 2017.

Lyles, Jr, Harry. “Richard Sherman stands up for Colin Kaepernick, despite disagreeing with how he protested.” SBNation.com. 6 Sep 2017.

Drovetto, Tony. “Friday Round-Up: Seahawks Cornerback Richard Sherman Visits Local Hospital.” Seahawks.com. 13 Oct 2017.

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Trump on Iran’s ‘Multiple Violations’

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In refusing to certify the Iran nuclear deal, President Donald Trump said Iran “has committed multiple violations of the agreement.” But that’s not the finding of the International Atomic Energy Agency.

The IAEA has issued eight reports since the agreement was implemented in January 2016, and all eight have found Iran is implementing the agreement — most recently on Aug. 31.

Trump himself has certified to Congress on two occasions that Iran has complied with the nuclear deal known as the Joint Comprehensive Plan of Action, or JCPOA. The president must issue a certification every 90 days.

On Oct. 13, Trump announced that he would not once again certify Iran’s compliance with the JCPOA. His decision “gives Congress the option to introduce legislation reimposing U.S. sanctions waived or suspended under the JCPOA on an expedited schedule,” the Arms Control Association says.

Trump said Iran committed “multiple violations” of the JCPOA, which was negotiated by the U.S., China, France, Germany, Russia and the United Kingdom, as well as representatives of the European Union and Iran.

Trump, Oct. 13: Iranian regime has committed multiple violations of the agreement. For example, on two separate occasions, they have exceeded the limit of 130 metric tons of heavy water. Until recently, the Iranian regime has also failed to meet our expectations in its operation of advanced centrifuges.

The Iranian regime has also intimidated international inspectors into not using the full inspection authorities that the agreement calls for. Iranian officials and military leaders have repeatedly claimed they will not allow inspectors onto military sites, even though the international community suspects some of those sites were part of Iran’s clandestine nuclear weapons program.

Let’s take a look at each of the three issues Trump raised, beginning with the limits on heavy water.

Under the agreement, Iran is limited to 130 metric tons of heavy water — which is a concern to nuclear arms inspectors, as the Associated Press explains, because it is “used to cool reactors that can produce substantial amounts of plutonium,” which “can be applied to making the fissile core of nuclear warheads.”

On two occasions, Iran has slightly exceeded the limits. The first time was in February 2016, a month after the agreement was implemented, and again in November. So Trump is right, although he was aware of these violations when he agreed twice before to certify Iran’s compliance.

Iran also is now in compliance with the heavy water limits, according to the eighth and most recent IAEA report. “Throughout the reporting period, Iran had no more than 130 metric tonnes of heavy water,” the report says.

“Iran exceeded the heavy water limits briefly but is now in compliance,” Daryl G. Kimball, executive director of the Arms Control Association, told us in an email. “It is important to note that the heavy water is now useless for Iran given that its heavy water reactor at Arak has been reconfigured so that it cannot produce plutonium.”

Iran filled the core of the heavy-water reactor at Arak with concrete in January 2016.

Kelsey Davenport, director for nonproliferation policy at the Arms Control Association, told us that there was a misunderstanding about the 130 metric tons.

Iran “interpreted language in the deal setting the cap differently than” the other countries, believing that the “130 ton limit was an estimate, not a hard cap.” But that difference has been resolved, and there have been no violations since.

As for Trump’s concern about advanced centrifuges, David Albright, an IAEA weapons inspector in Iraq during the 1990s and founder of the Institute for Science and International Security, said that issue has been resolved.

“The issue is the number of advanced centrifuges Iran had,” said Albright. “I would call it a violation that has been corrected, inadvertently I would add. The extra ones broke.”

Trump’s reference to inspections at military sites refers to the Parchin military site, which has been the site of past activity that the IAEA has suspected was connected to nuclear weapons development.

Under the JCPOA, the IAEA has daily access to declared nuclear sites for 15 years and continuous electronic monitoring of those sites for at least 15 years, as explained in a 67-page guidebook published by the Belfer Center for Science and International Affairs at Harvard University. But inspections at Parchin are handled differently. Those are covered by a separate confidential agreement — which critics have claimed amounts to self-inspections, a claim that the IAEA has denied, as we have written before.

“This is the most egregious of Trump’s claims,” Davenport, of the Arms Control Association, told us. “The IAEA clearly stated that Iran has granted inspectors all of the access the agency has requested. If Iran had blocked access, the P5+1, including the United States, would not have been able to say that Iran is complying with the accord.”

In a statement issued in response to Trump’s speech, IAEA Director General Yukiya Amano said that “the IAEA has had access to all locations it needed to visit.”

“As I have reported to the Board of Governors, the nuclear-related commitments undertaken by Iran under the JCPOA are being implemented,” Amano said in his statement.

Albright, who agrees with the president that Iran is “not in full compliance,” says the IAEA has not asked for access to the military sites for fear it would “bring down the entire deal.”

“The IAEA can ask to go and if Iran refuses, the JCPOA contains a mechanism to allow one party to snapback all sanctions,” Albright said. “But the IAEA is not likely to want to bring down the entire deal by asking to go to a military site.”

He said the issue of access to military sites “will be a centerpiece of fixing the JCPOA.”

We take no position on Trump’s desire to renegotiate aspects of the Iran deal that he does not like. The issue, though, is whether Iran has complied with the existing agreement, and even those within his own administration have said that Iran is in compliance.

In September, Secretary of State Rex Tillerson said Iran is in “technical compliance” with the deal, and Gen. Joseph Dunford, chairman of the Joint Chiefs of Staff, told Congress that “Iran is adhering to its JCPOA obligations,” and the agreement is working as intended.

“The JCPOA,” Dunford said, “has delayed Iran’s development of nuclear weapons.”

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Trump Muddles Economic Indicators

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In a news interview and a speech in Pennsylvania, President Donald Trump misleadingly suggested that rising stock value could reduce the national debt. One budget expert told us that notion was “just silly.”

In an interview with Sean Hannity of Fox News, Trump noted that the country’s debt rose by $10 trillion under President Barack Obama and that since he took office, stock values have increased by $5.2 trillion. So, he said, “maybe in a sense we’re reducing debt.”

Trump on Fox News, Oct. 11: The country — we took it over and owed over 20 trillion. As you know the last eight years, they borrowed more than it did in the whole history of our country. So they borrowed more than $10 trillion, right? And yet, we picked up 5.2 trillion just in the stock market. Possibly picked up the whole thing in terms of the first nine months, in terms of value. So you could say, in one sense, we’re really increasing values. And maybe in a sense we’re reducing debt. But we’re very honored by it. And we’re very, very happy with what’s happening on Wall Street.

Trump made similar comments during a speech on tax reform in Harrisburg, Pennsylvania, that same day.

Trump in Harrisburg, Oct. 11: And very proudly, just in the stock market alone, we have increased our economic worth by $5.2 trillion dollars. That’s right since Election Day — $5.2 trillion.

Think about that. That’s a quarter of the $20 trillion that we owe. So we’ve already — but listen to this because we’ve doubled — in the last eight years of the previous administration, the debt doubled, so that in eight years our debt — literally hundreds of years of debt — doubled in eight years to $20 trillion.

But since the election on November 8th, I’ve increased the value of your U.S. assets by more than the $20 trillion that we currently owe. You haven’t heard those numbers.

Trump is right that the federal debt increased under Obama.

Total public debt outstanding rose from $10.6 trillion to $19.9 trillion, an increase of $9.3 trillion. That includes all the money that the government owes to itself, including the Social Security trust funds. Under Obama, the federal debt held by the public grew from $6.3 trillion to $14.4 trillion, an $8.1 trillion increase, or a little more than 128 percent over Obama’s eight years.

The debt continues to rise under Trump. The debt held by the public is now at $14.7 trillion, and the total debt is at $20.4 trillion.

It’s also true that the stock market has been making steady gains.

Since Trump took office, the Dow Jones Industrial Average has climbed 15.9 percent to 22,872 at the close on Oct. 11. Trump takes credit for the rise in the stock market dating back to his election last November — and an argument can be made for a “Trump Rally” that many attribute at least partly to investor optimism that the president-elect would, once in office, cut taxes and regulation as promised. The Standard & Poor’s 500-stock average rose nearly 6 percent between Election Day and Obama’s last day in office.

The White House said Trump arrived at the $5.2 trillion figure by looking at the Wilshire 5000 Total Market Index. (A single point in the Wilshire 5000 represents about $1.15 billion in index market value, and the Wilshire index grew by 4,439 between Nov. 8, 2016, and Oct. 12. That translates to $5.1 trillion growth in market value since Election Day.)

But Trump’s suggestion that stock value somehow reduces the national debt is misleading.

“It’s nonsense,” Marc Goldwein, senior policy director at the Committee for a Responsible Federal Government, told us.

“There is no relationship between the national debt and the value of the stock market, which is the total value of a selection of stocks owned by individuals and being held abroad,” Goldwein said. “It’s just silly. They are totally different economic indicators.”

Those sentiments were echoed by political economist Greg Valliere of Horizon Investments to CNNMoney.

“The stock market’s gains have virtually nothing to do with the size of the national debt, which continues to rise because government spending far exceeds government receipts,” Valliere said. “A higher stock market encourages consumers and companies to spend more, which helps the overall economy. But it’s absurd to contend that the national debt has fallen because of this.”

Indeed, if Trump’s premise were accurate, the debt would have fallen significantly under Obama — because the rise in stock market value didn’t start with Trump’s election.

The S&P 500 index more than doubled — rising by 166 percent — under Obama. The Dow Jones Industrial Average rose 138 percent. And yet, as we said earlier, debt soared under Obama.

The White House referred us to an Oct. 12 interview that White House Legislative Director Marc Short gave to CNN’s Wolf Blitzer.

Short was asked whether a booming stock market would reduce the national debt, as the president suggested. He said it would, because a “booming stock market means that people are continuing to pay more taxes and dividends, so there are additional resources coming in to the Treasury.”

Short added that the country needs to “address its spending habit” but that “the booming stock market does help generate more revenue that can help pay down the debt.”

High stock values can be an indicator of faster economic growth, Goldwein of the Committee for a Responsible Federal Budget told us, but not always.

And higher stock value should translate to moderately higher revenues from capital gains taxes and retirement account withdrawals, he said, but those increased revenues would never be equivalent to the debt. For starters, only 20 to 25 cents of every dollar from capital gains is taxed, Goldwein said. And, it is only taxed when the stocks are sold, not when they are held. So the amount of tax revenue the government gets from that is a tiny fraction of the overall value of stocks.

In its own fact-check of Trump’s comments, the Committee for a Responsible Federal Budget notes: “Last year, capital gains taxes accounted for only 4 percent of total federal revenue – even a record jump in capital gains next year would only reduce further borrowing by about $50 billion, which is less than a tenth of what we are projected to borrow next year.”

And, Goldwein said, those increased revenues are already accounted for in the Congressional Budget Office’s deficit projections.

The CBO reported that the federal government ran a budget deficit of $668 billion in fiscal year 2017, which ended Sept. 30. That was about $25 billion less than the CBO projected in June, “largely because outlays were less than CBO anticipated.”

A CBO analysis of Trump’s proposed budget for fiscal year 2018 estimated that while Trump proposed significant spending cuts, the cumulative deficit over the 2018 to 2027 period would total $6.8 trillion (even as the deficits would decline as a percentage of GDP from 3.6 percent in 2017 to 2.6 percent at the end of the period).

In other words, the debt under Trump’s proposed budget would not be as high as projected under current law, but it would still grow. (We should note that Congress has not yet passed a spending plan for fiscal 2018.)

That Trump budget plan includes $1.9 trillion less in spending on health care in anticipation of a repeal and replace of the Affordable Care Act — which hasn’t happened yet.

The president’s budget also assumes deficit neutral tax reform, which the Trump administration and Republican leaders are not proposing. An analysis by the Committee for a Responsible Federal Budget, for example, concluded the latest iteration of the tax plan would add $2.2 trillion to the debt.

White House budget chief Mick Mulvaney told CNN, “If we simply look at this as being deficit-neutral [tax plan], you’re never going to get the type of tax reform and tax reductions that you need to get to sustain 3 percent economic growth.”

Trump is right that the stock market has been soaring — a trend that began several years ago, but that has been even more pronounced since Trump’s election. But those stock gains are not reducing the ever-growing national debt. At best, the additional tax revenues may contribute to slowing the debt’s growth.

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