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http://mediamatters.org/items/200902070003Limbaugh, Hannity, and the GOP: an iron triangle of stimulus misinformation On any given day during the current congressional debate over the economic recovery plan, chances are good that Rush Limbaugh or Sean Hannity will say something false about the administration's or congressional Democrats' efforts to pass a bill. And they do not promote these falsehoods in isolation; they are often promoted concurrently with each other and with Republican members of Congress. President Obama reportedly chastised congressional Republicans for "listen to Rush Limbaugh," and, as Media Matters for America has pointed out, Limbaugh has also demonstrated a proclivity for listening to -- and parroting -- congressional Republicans. For his part, in consecutive shows on January 30 and February 2, Hannity hosted Sens. Mitch McConnell, Tom Coburn and John McCain on his radio show, and on February 4 he hosted Rep. Mike Pence on Fox News. As a result, Hannity and Limbaugh have created an echo chamber of Republican talking points and misinformation criticizing the economic recovery plan. And given the acknowledgment by some national journalists that they pay attention to Limbaugh and Hannity, it follows that they care what the two are saying about the stimulus -- CNBC anchor Erin Burnett said as much about Limbaugh, touting his op-ed in The Wall Street Journal on that topic as "serious."
CLAIM: Corporate tax rate cuts and capital gains tax rate cuts would provide substantial stimulus
In a January 29 speech at the Heritage Foundation, Sen. Jim DeMint (R-SC) attacked the economic recovery plan and offered his own "Jobs Plan That Works," saying, in part: "Just as we cut taxes for families and small businesses, we need to cut them for corporations as well, from 35 percent to 25 percent. And we shouldn't be afraid to say so. Our corporate tax rate is one of the highest in the world, driving investment and jobs overseas. Lowering this key rate will unlock trillions of dollars to be invested in America instead of abroad." On the January 21 edition of Hannity's Fox News show, Michael Steele, now chairman of the Republican National Committee, said: "You want -- if you want to stimulate this economy, eliminate the capital gains tax for two years and see what happens. See what happens on Monday morning if you eliminate it today." Like DeMint and Steele, Limbaugh, in his January 29 Wall Street Journal op-ed on how best to stimulate the economy, wrote: "I say, cut the U.S. corporate tax rate -- at 35%, among the highest of all industrialized nations -- in half. Suspend the capital gains tax for a year to incentivize new investment, after which it would be reimposed at 10%." On the January 27 broadcast of his radio program, Hannity attacked the tax cuts in the recovery package as "anemic" because "They don't cut corporate tax rates. They don't cut capital gains tax rates."
However, as Media Matters has noted, many economists do not view corporate tax rate cuts and capital gains tax rate cuts as particularly effective methods for stimulating the economy. Mark Zandi -- the chief economist and co-founder of Moody's Economy.com, who was reportedly a McCain campaign economic adviser -- included in 2008 written congressional testimony a table stating that every dollar spent through a "Cut in Corporate Tax Rate" produces a GDP increase of only $0.30 -- the third least-efficient provision of the 13 he studied. A 2003 Congressional Research Service (CRS) report stated that a "capital gains tax cut appears the least likely of any permanent tax cut to stimulate the economy in the short run; a temporary capital gains tax cut is unlikely to provide any stimulus."
From Limbaugh's January 29 Wall Street Journal op-ed:
I say, cut the U.S. corporate tax rate -- at 35%, among the highest of all industrialized nations -- in half. Suspend the capital gains tax for a year to incentivize new investment, after which it would be reimposed at 10%. Then get out of the way! Once Wall Street starts ticking up 500 points a day, the rest of the private sector will follow. There's no reason to tell the American people their future is bleak. There's no reason, as the administration is doing, to depress their hopes. There's no reason to insist that recovery can't happen quickly, because it can.
From the January 27 broadcast of ABC Radio Networks' The Sean Hannity Show:
HANNITY: I look at this as smother the private sector, in terms of the stimulus package. I don't see this as a stimulus package. And when I look at the tax cuts -- as you point out have historically gotten us out of recessions -- in this plan they're anemic. They don't cut corporate tax rates. They don't cut capital gains tax rates. It's a lifeline that the private sector I think needs, you know -- that they need to stabilize. They need to invest. They need job growth. They're the ones that create jobs.
..much more..
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