Fox’s Own On-Screen Graphic Debunks Cavuto’s Theory That Low Corporate Tax Rates Are Good For Markets

Yesterday on his Fox Business show, host Neil Cavuto was overjoyed at the news that the stock market had gained on 2011′s first day of trading. Of course, Cavuto linked the bull market to the tax cut extension Congress passed last month. “As we start off a new year, it’s time to recognize a familiar historic fact,” Cavuto boasted with glee. “When you cut taxes, good things happen.”

During the ensuing segment, two on-screen graphics appeared showing countries’ corporate tax rates and corresponding stock performance in 2010. One graphic illustrated that the stock markets in countries with lower corporate tax rates than the U.S. — Canada, Russia, Turkey, and South Korea — all improved in 2010. Cavuto then explained:

CAVUTO: Alright, I should just explain to our viewers what we’re showing, top corporate rates across the globe here. Some of that may be a little bit of a misnomer for a lot of folks watching at home. In Russia for example, some of these other countries, they’ve been drastically cutting those top rates so it isn’t all it appears to be. The trend is what decides things, so the trend for you, when [the corporate tax rate] is down means markets and economies go up.

The other graphic appeared again, with the chyron reading “taxes down, stocks are up,” but the accompanying information clearly doesn’t support that claim nor does it back up Cavuto’s corporate tax rate theory:

Watch it:

So according to the facts — and the information provided by Cavuto’s own graphics — the U.S. has the highest corporate tax rate among any of the eight countries listed (even though the effective tax rate is much lower), yet the U.S. stock performance increased 11 percent in 2010. Meanwhile, Italy’s corporate rate was lower than the American rate in 2010, yet its stock market declined 13 percent in 2010. But according to Cavuto, lower corporate tax rates equals increased market performance.