GLIMMERS: The mysteries of the Buffett Rule!

TUESDAY, APRIL 17, 2012

Did the New York Times ever explain: This morning, the New York Times reports the fact that the Buffett Rule got filibustered in the Senate.

The report even uses the term “filibuster,” though not until late in the exposition. The headline and the opening passages are a great deal less clear.

Just a guess: Many Times readers could not explain how this famous proposal failed. But as we read this morning’s report, we asked ourselves a different question:

If you read the New York Times every day in the past week, did you ever learn what the Buffett Rule actually is?

For us, the problem started last Wednesday (see THE DAILY HOWLER, 4/11/12). In an editorial, the editors explained the Buffett Rule one way. In a news report, Jackie Calmes explained it quite differently:
NEW YORK TIMES EDITORIAL (4/11/12): President Obama accomplished two things when he made the case on Tuesday for the so-called Buffett Rule, which would require millionaires to pay at least 30 percent of their income in taxes.

CALMES (4/11/12): The Buffett Rule would set a minimum tax rate of 30 percent for individuals on their annual income above $1 million.
Those formulations are vastly different. According to the editors, a person who earned $1 million would have to pay at least $300,000 in federal taxes under terms of the Buffett Rule. According to Calmes, the Buffett Rule wouldn’t affect the first million dollars of income at all.

If you read the New York Times, did you ever see this matter resolved? Today, you learn that the Buffett Rule went down to defeat. But what the heck was the Buffett Rule?

Did Times readers ever find out?

We’d have to say they did not. In today’s news report, these are the passages in which Jonathan Weisman explains, or tries to explain, what the Buffett Rule actually is:
WEISMAN (4/17/12): Senate Republicans on Monday blocked a move to open debate on the so-called Buffett Rule, ensuring that a measure pressed for months by President Obama and Senate Democrats to ensure that the superrich pay a tax rate of at least 30 percent will not come to a decisive vote.

[...]

Republicans say they like that contrast, and their language ahead of the vote on a motion just to take up the Buffett Rule was harsh and aimed squarely at Mr. Obama, who first proposed a 30-percent tax rate floor for anyone earning at least $1 million a year last September.

[...]

Democrats argued for more fairness in the tax code. Their legislation would establish a 30-percent floor for households earning $1 million a year.
Based on those passages, do you understand what the Buffett Rule was? To us, it sounds like anyone earning at least $1 million would have to pay at least 30 percent of his or her total income in federal taxes. But Weisman never quite got around to a clear, concise account. And for various reasons, we’d be surprised if anyone really proposed such a rule. (One reason: Such a rule would create a major incentive for many people to keep their incomes below $1 million.)

Searching through Nexis, we can find no report in the New York Times in the past week which explained this rule more clearly.

Are you surprised when your greatest newspaper never quite explains such a high-profile matter? Question: If the Times can’t or won’t explain something like this, what does it ever explain?

For the record, we linked last week to Andrew Leonard’s report in Salon, which explained the Buffett Rule quite differently. Are you surprised by what this means?

In our view, we should be surprised by the following fact: Explanation plays almost no role in a great deal of modern “press” culture.

50 comments:

  1. Ignorance on taxes has been profound for the many decades of my life. I have known people who used backdated checks to charities to inch their incomes below a new bracket thinking their entire income (instead of the actual few dollars at the top) would be hit by that higher bracket tax. But it was sweet to see the foolish lose money, the charity gain, but everyone happy.

    ReplyDelete
  2. Tuesday, April 12, 2012, and the subject of two Daily Howler posts is:

    What the The New York Times said.

    What Ed Schultz said.

    What Joan Walsh said.

    Clearly, the future of the republic is in jeopardy.

    ReplyDelete
    Replies
    1. "The Daily Howler" is a blog about media issues. This includes what The New York Times says, what Ed Schultz says, and what Joan Walsh says. And the state of the media does affect the future of the republic, in my opinion.

      Delete
    2. Sure it "includes" the New York Times, Ed Schultz and Joan Walsh.

      But forgive me if I as a reader would hope that Somerby would broaden his view of "the state of the media" beyond the New York Times and MSNBC.

      Delete
    3. Anon April 17: "I hate that Bob Somerby is repetitive in his subject matter." Anon April 16: "I hate that Bob Somerby is repetitive in his subject matter." Anon April 15: "I hate that Bob Somerby is repetitive in his subject matter." Anon April 14: "I hate that Bob Somerby is repetitive in his subject matter." Anon April 13: "I hate that Bob Somerby is repetitive in his subject matter." Anon April 12: "I hate that Bob Somerby is repetitive in his subject matter." Anon April 11: "I hate that Bob Somerby is repetitive in his subject matter." Anon April 10: "I hate that Bob Somerby is repetitive in his subject matter." Anon April 9: "I hate that Bob Somerby is repetitive in his subject matter." Anon April 8: "I hate that Bob Somerby is repetitive in his subject matter." Anon April 7: "I hate that Bob Somerby is repetitive in his subject matter." Anon April 6: "I hate that Bob Somerby is repetitive in his subject matter." Anon April 5: "I hate that Bob Somerby is repetitive in his subject matter." Anon April 4: "I hate that Bob Somerby is repetitive in his subject matter." Anon April 3: "I hate that Bob Somerby is repetitive in his subject matter." Anon April 2: "I hate that Bob Somerby is repetitive in his subject matter." Anon April 1: "I hate that Bob Somerby is repetitive in his subject matter."

      Delete
    4. Yeah, how rude it is for someone in a combox to point out that Somerby pretty much is down to writing the same posts day after day after day after day.

      Delete
    5. The NY Times is without question the most influential news outlet in the country. It plays a large role in setting media agendas and narratives around political issues. Many, many smaller newspapers carry its stories and editorial writers (for example, my local Podunk-Standard carries every NY Times opinion writer and has at least two NY Times news stories in it every day). It's influence should not be understated.

      Delete
    6. @Anon8:41

      It's not rude, it is ridiculously ironic.

      Delete
    7. Well, hardindr, maybe on the planet you and Somerby live on, what the New York Times does is instantly repeated in every news media across the U.S.A.

      But I also happen to think that the Boston Globe, the Chicago Tribune, the LA Times, the San Francisco Chronicle, the Denver Post, the Philadelphia Inquirer, the Atlanta Journal-Constitution, the Miami Herald, the Dallas Morning News, the Houston Chronicle, etc., etc., etc., are all fairly influential as well.

      And as far as TV news goes, maybe the ABC, CBS, and NBC nightly news casts still have a measure of influence, along with PBS, Fox, et al.

      But of course, it would take a lot more thinking and a whole lot of more work to include them in your media analysis, rather than lump the sins of all the media in the U.S. onto two convenient scapegoats.

      Delete
    8. I never said that the news organizations that you listed weren't influential to some extent, and I believe that Bob Somerby at some point in the last 14 years has criticized most of them, but it doesn't change the fact that the NY Times is still the most influential news organization in the US. When the NY Times speaks, people listen, particularly other news outlets. You are just knocking down strawmen.

      Delete
    9. So, a valid version of your complaint might be that it's too bad that Somerby's just one guy.

      Or you think he's but a part of a complete diet of media criticism (which should also include for example... well, you don't say.)

      But your simultaneously sarcastic and fatuous characterization ("what the New York Times does is instantly repeated in every news media across the U.S.A.") of hardindr's perfectly accurate statements and your repeated overblown attacks on Somerby for doing what he does rather than whatever it is you'd like...

      Well, rude is in fact the correct word. Useless and time-wasting are a couple of others...

      But be honest with us, Anonymous, you really just think anyone who listens thoughfully to anything Somerby says is just a sheep, who "needs someone to do their thinking for them," right?

      The right answer isn't that people can read Somerby *and* some other critics -- it's that Somerby should just shut up? Or that he should just get his marching orders from you?

      If you had anything to say, you'd probably say it. You're not shy. But you bring nothing, again.

      Delete
    10. And I never said the New York Times is without influence. I am only questioning the degree of influence the Times has that it would become virtually the sole print media scapegoat for Somerby. Heck, he used to throw in the Washington Post quite often, and he seldom does that now.

      Living in so-called "fly over" country, I suspect that Somerby is guilty of an East Coast bias that says if it doesn't happen in New York City, it simply doesn't happen.

      Delete
    11. Anon 9:17:

      I live in Boston. I used to read the Globe daily, now just occasionally. Do you know who owns the Boston Globe?

      Delete
    12. Swan, once again I am just saddened that this once very worthwhile blog has become indistinguishable from a whole bunch of other right-wing blogs in trolling just two sources for evidence of "liberal bias" in the media.

      This is something Somerby himself wrote against eloquently a few years ago in a brilliant takedown of Bernard Golberg's book.

      Now before you get all huffy and stompy-foot and demand that I stop reading and commenting on this blog, well son, you don't have that power.

      Delete
    13. Yes, Hypo, I do know who owns the Boston Globe. I also know that lots of newspapers are owned by conglomerates which are not the New York Times.

      Delete
    14. The NY Times may be influential, but whoever the idiot is who convinced Bob that the NY Times is the least bit "liberal" is much more influential in my eyes.
      Berto

      Delete
    15. Anon 9:48,

      By indistinguishable, do you mean that in a subset of posts he comes to a broadly similar conclusion (that a particular news organ is not doing their job well), but with different reasons from a completely different political foundation (anti-war, progressive taxation, anti-Fox News, etc.)?

      One of the differences between you and Bob, is that Bob exaggerates for rhetorical effect, but uses facts as evidence when constructing his arguments. You, on the other hand, often use your exaggerations as pillars in your reasoning. For example, you use "just two sources" as a premise for your conclusion that he is a hypocrite. An honest, clear mind doesn't use their own hyperbole as a premise in a deductive argument. This is very similar to a straw man construct.

      Delete
    16. By "indistinguishable" I mean "indistinguishable". Big word, I know, but not a hard one.

      As for "just two sources," I wish it were hyperbole on my part. But all you have to do is go into the "incomparable archives" to see how obsessed Somerby has become with MSNBC and the New York Times.

      Delete
    17. Anon 11:15,

      Things with the same conclusions, but differing ways of getting there are quite distinguishable from each other. If one were honest, and not so sad about someone else's blog.

      Delete
    18. And blogs that harp on "liberal bias" but can only come up with a few examples are quite indistinguishable, no matter what the author claims to be his ideology.

      Delete
    19. Not a "detail person," eh? Glad you're not my surgeon.

      Delete
    20. So let me see if I understand. When someone tells you they are liberal, then only writes about "liberal bias in the media" that is somehow different than when someone tells you they are conservative, then only writes about "liberal bias in the media."

      In other words, all somebody has to do to get a pass from you is to tell you he belongs to the same "tribe."

      Delete
    21. Anon 12:18,

      "only writes about 'liberal bias in the media'"

      This is just what I was writing about. You use this as a premise. This is obviously an exaggeration. Somerby writes about many other things. You have ignored it before when long, incomplete lists have been presented to you, so I will not do it again. Your logic is a mess.

      Delete
    22. Nice try, but completely dishonest.

      I have written, quite clearly and simply, that Somerby is stuck on "liberal bias" on MSNBC and in the New York Times to the point of obsession.

      But you, by all means, tune in tomorrow for another thrilling episode in the "Adventures of What MSNBC and the New York Times Got Wrong Yesterday."

      However will you ever know who is "misleading" you and how you are being so horribly "misled"?

      Delete
    23. I don't think Somerby has ever used the term "liberal bias" or has ever complained of "liberal bias". If you think media ineptitude and laziness serves your/(our) ideological interests, then I suggest you're sadly mistaken.

      Delete
    24. "...media ineptitude and laziness..."

      Follow the money. The media is the propaganda arm of corporations. They do not share my ideological interests, never mind serve them.

      Berto

      Delete
    25. It is correct that Somerby doesn't use the term "liberal bias." He's not quite honest enough to do that. Instead, in his obsession with MSNBC and the New York Times, he uses such terms as "tribe", "sweet hay", "pleasing tales" and "cattle."

      Incidentally, I don't think the purpose of the "media" is to serve my ideological interests. I wouldn't learn anything if it did, or if I stuck only with those particularly few "media" that did.

      But I will note that those who think the "media" got the Trayvon Martin case all wrong are getting their information to support that notion from . . . "the media."

      Delete
  3. A couple things. First, an average 30% rate would not create a MAJOR incentive to keep income below $1 million. And second, even if it did, why would that be a bad thing?

    As for the incentive. If you look at average tax rates here http://journals.democraticunderground.com/hfojvt/169
    The average rate in 2008 for those in the top .1% was 22.7%. So, if you imagine someone making $950,000 suddenly going up to $1 million, then, under that version of the Buffett rule, they would pay $84,350 in taxes on that last $50,000 in income. If, however, for example, they could "earn" up to $1.5 million, they would only pay $234,350 on that last $550,000 in income. A 43% marginal rate, but one that still puts them ahead by $315,650.

    If, for another example, they "earn" $5 million a year, then they pay (on average) an extra $1.28 million on that last $4.05 million in income. A mere 32% marginal rate, which is lower than the current top marginal tax rate.

    There is only a narrow zone, between about $900,000 and $1,200,000 where this type of rule would be a disincentive to grab more.

    ReplyDelete
    Replies
    1. Nice analysis.
      And why I spend more time reading blogs (and comments in blogs) than I do the "media."
      Honestly, how many "facts" (other than the sports pages) are in a newspaper???
      With the internet you can go and look up the law yourself, http://thomas.loc.gov/cgi-bin/query/z?c112:S.2230:
      and say, WTF does that mean!?
      And do your own analysis, like, "is there a reason it has to be so complicated?"
      and answer your self, "Why yes...how do you think these guys get campaign contributions? - by writing exceptions and caveats into the law that the AVERAGE voters can't understand. It is a feature, not a bug."
      fresno dan

      Delete
  4. Years ago, when I expected more from the New York Times, I recall being surprised to find that they hadn't analyzed the provisions of some bill in which I was interested. After it passed, they finally explained it.

    Later, I realized that this was their normal policy. Bills get scrutinized only after they become law. If the "Buffett Rule" had passed, the Times would have explained it then.

    Of course, not knowing what's in a bill makes it difficult for the average citizen to get involved before it passes, e.g., by contacting his Congressman. I think the Times doesn't want the ordinary citizen involved in legislation.

    Incidentally this New York Times editorial practice is consistent with Nancy Pelosi's infamous comment about the ObamaCare bill:

    But, we have to pass the bill so that you can find out what is in it.

    ReplyDelete
  5. Alas, this is how we do it in the US.

    We refuse to sign a petition because we don't know what it's about, or vote for a candidate because we don't know who he is.

    Then we wait till the election is over to see what we have wrought.

    We have perfect 20-20 hindsight.

    ReplyDelete
  6. Quaker in a BasementApril 17, 2012 at 1:25 PM

    Aw, c'mon Dave. The conservative excuse on the ACA was it was just too darn big to read. The same can't be said of the Buffett Rule bill. It's only a couple of pages long.

    Calmes has it right. The 30 percent tax rate applies to the taxpayer's AGI, not the excess over 1 million. High income earners would be able to deduct charitable contributions under existing rules.

    Is this a smart way to implement a minimum tax? I dunno. It seems to me that it would create counterproductive incentives for folks that have incomes right at $1 million. But I guess it's moot now.

    Anyway, no need to guess what's in the bill. You can look up S. 2230 without any help at all.

    ReplyDelete
    Replies
    1. Quaker in a BasementApril 17, 2012 at 1:31 PM

      Bah! It's Weisman, not Calmes, who has it right. The tax rate applies to total AGI, not the excess over $1 million.

      Delete
  7. Calmes may know the facts, but the way she phrased it would lead one to believe the 30% tax is on marginal income above $1M.

    "The Buffett Rule would set a minimum tax rate of 30 percent for individuals on their annual income above $1 million."

    ReplyDelete
  8. The Daily Show explained it as a total tax rate for people making over 1 million, which then got translated into creating an incentive to move all income over 1 million off shore or to stocks.

    I clicked the link to the bill's text itself and I couldn't parse that. Sorry, not an expert on legislative language. It would be nice if people could decide what the bill means.

    And, to the commenter upthread who said there'd be no incentive to hide income over 1 million, part of the brilliance of modern taxation is that, at no point in someone's income, does adding $1 more increase someone's tax burden by more than $1. If the Buffet rule does kick in at 1 million and it's an automatic 30%, then that would be a marginal tax rate of way over 100% for some people out there and they'd have an incentive to earn less. It'd be a silly system.

    Tax codes just plain aren't written that way in the modern world. So I find the Times's description hard to believe.

    ReplyDelete
    Replies
    1. Yes, this proposal was silly. Someone earning $999,999.99, entirely in qulified dividends, would pay federal income tax of $150,000 (at today's rates). But, if he earned one penny more, his tax bill would go up by $150,000.

      It's typical of some egotistical far left people, like Obama and my Governor Brown, to ignore traditional ways of doing things. There's a kind of euphoria that can affect people, making them think they can do things others couldn't or wouldn't have done.

      This attitude can cause a lot of problems. The traditional approach often has virtues that pols and their appointees don't know about. A combination of ignorance and arrogance can do a lot of damage.

      Delete
    2. Anyone who falls for the BS passed around by the deficit scolds is ignorant.
      BTW, scratch a deficit scold and find someone who waved off the criticism of GWB losing a $9 Billion palette of cash in Iraq with a remark about Bush Derangement Syndrome.

      Berto

      Delete
  9. From Glenn Kessler, in today's Washington Post. I'm with Bob. Not sure what THIS means either: ” The proposal — named after billionaire investor Warren Buffett, who said he paid a lower tax rate than his secretary — would impose a surcharge on people with gross adjusted income over $1 million, eventually reaching 30 percent. I'm probably just dense.

    ReplyDelete
  10. OK Bob, if you're so smart, you explain it - why shouldn't blogs explain things as well as the MSM?. Here's the text:

    http://www.govtrack.us/congress/bills/112/hr3903/text

    [I'll let you know if I figure it out].

    ReplyDelete
  11. Now I have studied the bill for countless minutes and can offer an absolutely definitive explanation (unless I am wrong).

    --The extra tax starts at $1M income and is phased in up to $2M. That is, someone with $1M income pays no extra tax, but someone with $2M income or over must pay at least 30% on the eligible income.

    --Eligible income is adjusted gross income less charitable contributions. So even if you make over $2M, if you put it all into tax-deferred retirement accounts and/or give it away to charity you could still pay no income tax (you would still be liable for payroll taxes, but that's chicken feed at that income).

    ReplyDelete
    Replies
    1. Thank you, Skeptonomist. That makes sense. In that case, it sounds as though an addition dollar wouldn't result in more than one dollar of additional tax, at least not in normal situations.

      Delete
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