A Project of The Annenberg Public Policy Center

Not Pelosi’s Windfall Tax


Q: Did Pelosi advocate taxing “windfall” stock profits at 100%?

A: No. A widely circulated e-mail quoting her is a fraud.

FULL QUESTION

Are these quotes attributed to Speaker Pelosi really hers? If so, how accurate are they?

You aren’t going to believe this.

Madam speaker Nancy Pelosi wants to put a Windfall Tax on all stock market profits (including Retirement fund, 401Ks and Mutual Funds!) Alas, it is true – all to help the 12 Million Illegal Immigrants and other unemployed minorities!

Boy, are we in trouble! This woman is frightening. Take special note of the last paragraph. Is she really this whacked out?

Nancy Pelosi condemned the new record highs of the stock market as “just another example of Bush policies helping the rich get richer. First Bush cut taxes for the rich and the economy has rebounded with new record low unemployment rates, which only means wealthy employers are getting even wealthier at the expense of the underpaid working class.”

She went on to say “Despite the billions of dollars being spent in Iraq, our economy is still strong and government tax revenues are at all time highs. What this really means is that business is exploiting the war effort and working Americans, just to put money in their own pockets.”

When questioned about recent stock market highs she responded “Only the rich benefit from these record highs. Working Americans, welfare recipients, the unemployed and minorities are not sharing in these obscene record highs. There is no question these windfall profits and income created by the Bush administration need to be taxed at 100% rate and those dollars redistributed to the poor and working class. Profits from the stock market do not reward the hard work of our working class who, by their hard work, are responsible for generating these corporate profits that create stock market profits for the rich. We in congress will need to address this issue to either tax these profits or to control the stock market to prevent this unearned income to flow to the rich.”

When asked about the fact that over 80% of all Americans have investments in mutual funds, retirement funds, 401Ks, and the stock market she replied: “That may be true, but probably only 5% account for 90% of all these investment dollars. That’s just more ‘trickle down’ economics claiming that if a corporation is successful that everyone from the CEO to the floor sweeper benefit from higher wages and job security which is ridiculous. How much of this ‘trickle down’ ever gets to the unemployed and minorities in our county? None, and that’s the tragedy of these stock market highs.”

“We democrats are going to address this issue after the election when we take control of the congress. We will return to the 60% to 80% tax rates on the rich and we will be able to take at least 30% of all current lower income tax payers off the rolls and increase government income substantially. We need to work toward the goal of equalizing income in our country and at the same time limiting the amount the rich can invest.”

When asked how these new tax dollars would be spent, she replied: “We need to raise the standard of living of our poor, unemployed and minorities. For example, we have an estimated 12 million illegal immigrants in our country who need our help along with millions of unemployed minorities. Stock market windfall profits taxes could go a long ways to guarantee these people the standard of living they would like to have as ‘Americans’.”

Send it on to your brilliant friends. I just did!!

FULL ANSWER

Given the number of times we’ve been asked about this particular bit of bunk, a lot of gullible people are indeed sending it on to their friends. But those who are truly “brilliant,” or even half-bright, will treat it with skepticism. The urban legend site Snopes.com has already looked into this e-mail and proclaimed it to be false. We find ourselves in total agreement. It’s a fraud.

For starters, the e-mail has been in circulation since late 2006 – that is, right around the mid-term elections that resulted in control of Congress shifting to the Democrats. The earliest version of the e-mail attributed the claims to a bylined article by Walt Bogdanich and Gretchen Morgenson dated Oct. 22, 2006. Bogdanich and Morgenson are in fact real reporters with the New York Times. And they did in fact publish a piece together on October 22, 2006. Its headline: “S.E.C. Inquiry On Hedge Fund Draws Scrutiny.” However, Rep. Nancy Pelosi isn’t mentioned in that article.

Further proof that the e-mail is made up: None of the supposed Pelosi quotes appears in any news source we were able to find in an extensive search of news databases, nor do they show up in archives of mainstream conservative commentators. Had Pelosi really advocated taxing the retirement accounts of thousands of American workers and giving the proceeds to “illegal immigrants,” one would imagine that Rush Limbaugh might have mentioned that.

What Pelosi did advocate at around the same time was cutting tax breaks for oil and other energy companies. As CNNMoney.com reported at the time:

CNNMoney.com, Nov. 28, 2006: Holding a slim majority, Democrats will instead attempt to eliminate tax breaks for energy companies and raise royalty payments for oil and gas drilled on federal land, according to a spokesman for House speaker-to-be Rep. Nancy Pelosi.

The measures are expected to add $33 billion to federal coffers over the next 25 years, which Democrats say they’ll channel into renewable energy.

Pelosi’s spokesman said $20 billion is expected to come from eliminating royalty relief.

Raising taxes on oil companies is quite different from a 100 percent tax on all stock gains. As far as we can determine, no one in Congress has called for a 100 percent stock-profit tax on even the richest Americans, nor has anyone proposed raiding anyone’s 401(k) to fund “illegal immigrants.”

This one totally fails the FactCheck.org test. It’s a malicious fabrication.

Sources

Bogdanich, Walt and Gretchen Morgenson. “S.E.C. Inquiry on Hedge Fund Draws Scrutiny.” New York Times, 22 Oct. 2006.

Hargreaves, Steve. “Dems versus oil, part 2.” CNNMoney.com, 28 Nov. 2006.