The New York Times surveys the Buffett Rule!

WEDNESDAY, APRIL 11, 2012

So many ways to get played: For our money, the New York Times presents an astounding array of editorials today, including this classic High Manhattan groaner concerning Ozzie Guillen.

(It’s the requisite jibe at South Florida which made the analysts laugh. That and the editors’ subsequent absurd attempt to paraphrase what Guillen said.)

That said, the featured editorial, concerning the Buffett Rule, merits a longer look.

As they start, the editors seem to misstate the rule; they seem to feel required to do this. But early on, we were very much struck by this passage:

NEW YORK TIMES EDITORIAL (4/11/12): The Buffett Rule, which would raise an estimated $50 billion over 10 years, would not make an appreciable dent in the deficit or provide a lot more for essential programs. By comparison, letting the Bush-era tax cuts expire for taxpayers making more than $250,000 a year, as the president has also called for, would raise $800 billion over 10 years.

Wow. In terms of revenue enhancement and deficit reduction, $50 billion over 10 years is truly less than a drop in the bucket. Citizens might ask themselves if they’re getting played when their president makes such a big deal about an idea which involves such a tiny amount of revenue.

Don’t get us wrong—we support higher taxes on upper-end earners. But that brings us to our second point:

The editors reject the tiny amount the Buffett Rule would bring in. “By comparison,” they praise Obama’s proposal to let the Bush tax rates expire on those who earn more than 250 large.

This proposal would raise $800 billion over 10 years, the editors say—and they seem to regard this as a hefty amount. Later, they say this proposal “is not only fair, it is essential for raising substantial and much-needed revenue.”

We would support that proposal too. But given the size of projected deficits, is $800 billion over 10 years really a hefty amount? We’ll remind you of what Paul Krugman told Charlie Rose last year concerning the need for future revenue (see THE DAILY HOWLER, 7/26/11):

KRUGMAN (7/22/11): What the long-run solution to the U.S. budget problem is, is controlling health-care costs. It means more of the kinds of things that were already in the Affordable Care Act. A lot of serious, serious efforts to bring the rate of growth of health-care costs down, bending the curve—horrible metaphor, but bending the curve. Which we know can be done because other countries do it, and then we need revenue. In the end, we’re going to need three, four percent of GDP in additional revenue. You can get some of that by allowing the Bush tax cuts to expire, but we’re going to need more than that.

So in fact I have a prediction. If David [Brooks] and I are still around here 25 years from now, I predict that we will have a much more controlled health-care system that sort of matches the cost performance of other countries, and we’ll have something like a value-added tax to increase revenue. And that is how America will be solvent in the end.

Regarding the Bush tax cuts, Krugman didn’t specify whether he meant all the cuts or just those on income above $250,000. Whatever he meant, he said that wouldn’t provide enough extra revenue. This would mean that the editors’ proposal is inadequate.

Would $800 billion over 10 years be sufficient extra revenue? When the editors at the New York Times type, they treat this as the outer limit of imaginable tax increases. They don’t even consider a third framework—letting all the Bush tax rates expire. Their readers don’t even get to see a discussion of this possibility.

Our public discussions are very weak. The editors are very much part of that problem.

In closing, let’s discuss one more part of this editorial. At the start of their piece, the editors cite the fact that Mitt Romney only paid 14 percent federal tax on his mammoth income last year. If you watch The One True Liberal Channel, you will see various chimps chattering about this fact this week.

Lawrence O’Donnell is having great fun. Let’s consider an earlier candidate, one he hotly supported.

In 2004, Candidate Kerry and his wife, Teresa Heinz Kerry, filed separate tax returns, as is often the case when one spouse is very wealthy. Just for some context, the New York Times reported in October 2004 that Heinz Kerry had paid 12.3 percent federal tax in 2003 on $5.1 million in income. That was less than 14 percent!

Yes, that was Kerry's wife; it wasn't Kerry himself. But Lawrence didn’t fling poo about that! We support higher taxes on high earners. But then, we also support the need for honest brokers in high journalistic places.

O’Donnell has played a noxious role in at least two previous White House campaigns. He’s clowning around on your side this year.

Next time, who really knows? When we let clownish cultures develop, such cultures can come back to bite us.

As they have done in the past.

Obama’s formulation: How does Obama describe the Buffett Rule? Yesterday, he offered this formulation:

OBAMA (4/10/12): And Florida, I've told you where I stand. So now it's time for members of Congress to tell you where they stand.

In the next few weeks we're going to vote on something we call the Buffet Rule. Very simple. If you make more than a million dollars a year...then what the rule says is you should pay the same percentage of your income in taxes as middle class families do.

You shouldn't get special tax breaks. You shouldn't be able to get special loopholes.

And if we do that, then it makes it affordable for us to be able to say for those people who make under $250,000 a year, like 98 percent of American families do, then your taxes don't go up.

That’s a hazy formulation. (It’s “very simple,” the president correctly said.) The editors were more precise. So was Times reporter Jackie Calmes—and her formulation in today’s news report differs from that of the editors.

Her percentage is the same—30 percent. Her formulation is massively different. ("The Buffett Rule would set a minimum tax rate of 30 percent for individuals on their annual income above $1 million." Our emphasis.)

Classic Times! If it weren’t for contradictory accounts, would America’s greatest newspaper have any accounts at all?