Fox Business attacks measure that would repeal News Corp’s massive tax loophole
The Fox Business Network ran a negative report on a California ballot initiative that its parent company, Rupert Murdoch’s News Corporation, has spent over a million dollars to defeat, according to New York Times.
As part of an ongoing report entitled “The War on Business,” Fox business correspondent Adam Shapiro repeatedly stated that Proposition 24, also known as the Tax Fairness Act, could drive small businesses out of California.
His five hour report took place at a furniture manufacturing facility in Gardena, California where he interviewed owner Ben Nielsen, who was also interviewed by the group “No on 24.”
If passed, Proposition 24 would repeal $1.7 billion in corporate tax breaks passed in late 2008.
Those supporting the repeal of the corporate tax breaks claim it is draining state revenue while those in favor of the tax breaks say it allows employers to expand their business.
Fox interviewed no one supporting Proposition 24, according to the Times report.
“The state government estimates that if [the legislation] went into effect, the short run cost would be $700 million in reduced tax collections,” Charles Swenson, professor at the Marshall School of Business, told the Daily Trojan. “However, in the long run, it would attract more businesses to California, creating more jobs and expanding the tax base.”
“By 2014, after the breaks take hold, corporations would only account for 9.4 percent of tax collections,” counters David A. Sanchez, President of the California Teacher Association. “To say this would hurt businesses is misleading, because 98 percent of California’s businesses — especially small businesses — would get virtually no benefit from the tax breaks. These tax breaks unfairly benefit less than 2 percent of California’s businesses, and they are the state’s wealthiest multistate and multinational corporations.”
The proposition comes during an election season where California faces a $19 billion budget deficit.
Tracy Byrnes, an anchor for the Fox Business report, said that the proposition “was setting up businesses to be destroyed, quite frankly.”
News Corporation, Fox Business Network’s parent company, has donated nearly $1.3 million to groups opposing the proposition.
News Corporation is one of ten corporations that have donated over a million dollars to defeat Proposition 24. The other corporations are the Walt Disney Company, Time Warner, Viacom, CBS, General Electric, NBC, Cisco, Genentech and Qualcomm.
The report by Fox Business did not disclose News Corporation’s donations or include interviews of supporters of the proposition, such as the California Teacher Association.
Kevin Magee, executive vice president at Fox Business, told the New York Times he did not know of his parent company’s donation, but claims if he had known of it beforehand, he would have made sure it was disclosed.
“There’s a trust between you and your audience, no matter what the medium is,” Kevin Z. Smith, former president of the Society of Professional Journalists told the New York Times. “Not disclosing conflicts, to me, severely undermines your credibility.”