Thursday, March 4, 2021

Facebook post misleads about tax bill breakdown

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If Your Time is short

• The claim leaves out a lot of necessary detail about the hypothetical taxpayer and his or her tax bill, including status and number of dependents.

• Experts say there is no clear definition of “corporate subsidies.”

A social media post that has been shared thousands of times claims to have a revealing handle on how the government spends American tax dollars.

“So, you say you hate socialism?” the post begins. “If you make $50,000/year, $36 of your taxes goes to food stamps. $4,000 goes to corporate subsidies. If the $36 upsets you more than the $4,000, then you just hate poor people — not socialism.”

The post was flagged as part of Facebook’s efforts to combat false news and misinformation on its News Feed. (Read more about our partnership with Facebook.)

Is this breakdown of how taxpayer money is spent accurate? PolitiFact consulted experts, and it’s not that simple.

Origin of the claim

The food stamp portion of the claim appears to date back to a July 2012 article that broke down how much a married person who made $50,000 a year and who had one child would pay in federal taxes.

After taking into account tax dollars allocated to Medicare and Social Security, the individual’s remaining tax dollars were split among “programs administrated by the federal government,” according to the article, which provided a White House website as its evidence.

The author of the article concluded that $36.82 of the hypothetical individual’s tax bill went toward funding “food and nutrition assistance.” That category presumably refers to the Supplemental Nutrition Assistance Plan, which replaced the Food Stamp Act of 1997 back in 2008.

The calculations were based on numbers from years ago. Since then, federal spending on programs has changed and so have federal income tax brackets, meaning these numbers are outdated.

The article doesn’t touch on “corporate subsidies” at all, nor is there a line for them on the 2013 White House Federal Taxpayer Receipt, which sought to break down how individuals’ taxes are spent by the government. PolitiFact was unable to find a source for the claim that $4,000 worth of taxes paid by a person earning $50,000 would fund “corporate subsidies.”

Experts weigh in

Experts say analyzing this claim isn’t easy because the post lacks necessary details.

Matt Gardner, a senior fellow at the Institute on Taxation and Economic Policy, said the post is missing critical information needed to make an accurate comparison — including whether federal and state taxes are being considered.

Beyond that, he pointed out the post also doesn’t specify “what kind of family you’re talking about, whether ‘food stamps’ includes both the direct cost and the administrative cost, and above all what ‘corporate subsidies’ means.”

For example, he said, a married couple with two children “could very easily owe zero federal income taxes” at a yearly income of $50,000.

“It’s virtually impossible to fact-check,” Gardner said. “It’s just too vague.”

Richard Winchester, tax policy expert and law professor at Seton Hall Law School, said the claim made an “unusual comparison” and noted that the post “oversimplifies and misleads.”

First, Winchester said it was unclear what would be considered a “corporate subsidy,” per the post’s claim. He said it was possible the post was referring to tax expenditures — also known as revenue “the government is passing up by not taxing” certain things.

But Winchester pointed out that it’s not as if a person’s tax money would “go to” corporate tax expenditures the way the post claims.

“It’s one thing to say, ‘alright, the federal government actually writes a check […] to fund SNAP,’” Winchester said. “But corporate tax expenditures — it’s not writing a check. It’s really forgoing revenue.

Winchester said it was also possible that the “corporate subsidies” in the post referred to money the government gives directly to some businesses, but it’s simply not clear.

Neil Buchanan is a law professor at the University of Florida’s Levin College of Law and an expert on tax policy. He echoed the concern that there’s no single definition of corporate subsidy.

“Is the entire Pentagon budget a corporate subsidy?” he said. “Is the CDC’s budget a corporate subsidy, because businesses benefit from the research that CDC produces? Again, that term means nothing.”

Further, Buchanan said “there are so many moving parts to the budget picture that it’s possible to cherry-pick numbers to present almost any picture you want,” with these types of claims.

Even taking into account the lack of information, Buchanan concluded there was no possible way that the post could be making an accurate claim:

“The highest amount in federal income taxes that a person with $50,000 in gross income in 2020 would pay is $4,314, and he would pay $3,825 in payroll taxes, for a total of $8,139. Social Security, Medicare, interest on the national debt, and military spending combine for 72% of spending, so if we (meaninglessly) multiply that by our $50,000 earner’s federal tax total, that is $5,860, leaving only $2,279 for everything else. How would we get $4,000 for corporate subsidies out of $2,279?”

Gardner said there might be a “kernel of truth” to the post in that the U.S. spends more on corporate subsidies than on SNAP benefits.

But, he also used a hypothetical situation with the “most aggressive scenario possible in terms of federal income tax — a single person, all wages, no itemized deductions, no kids” and estimated the person’s total tax bill would be about $4,100.

This would mean that after SNAP benefits and “corporate subsidies” were taken out of that tax bill, there would be just $64 left for other federal programs.

“Since we obviously fund a lot of things other than food stamps and corporate subsidies, the dollar value of those numbers seems clearly wrong,” Gardner concluded.

Our rating

A post claims, “If you make $50,000/year, $36 of your taxes goes to food stamps. $4,000 goes to corporate subsidies.”

Experts say the post does not provide enough information to break down if a person’s tax dollars are being spent in this way. However, even when experts considered the most extreme hypothetical tax situations, they concluded these numbers were not possible.

We rate this claim False.

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