Part 4—The New York Times doesn’t do taxes: What the heck did Paul Ryan propose concerning federal taxes?
If you read the New York Times, you have little idea. Yesterday, the Times spilled over with news reporting about a random Etch a Sketch comment. But for the second consecutive day, our greatest newspaper had little to say about Ryan’s tax proposals. See THE DAILY HOWLER, 3/22/12.
Years ago, Leona Helmsley told the world that taxes were for “the little people.” Who knows? Perhaps that view prevails even today at the New York Times! But then, it may have been for the best when the Times took a pass on Paul Ryan’s proposals.
Consider what happens when the New York Times does try to discuss federal taxes.
Since one day after the dawn of time, federal taxes have played a central role in our national politics. On March 14, Eduardo Porter devoted his weekly Economic Scene column to one part of federal tax practice.
Porter discussed the way “tax expenditures” (tax loopholes, tax breaks) tend to favor higher earners. A great deal of our public discussion concerns those parts of federal policy which favor lower earners, with conservatives making invidious claims about all the freeloading that is involved. For that reason, Porter had chosen a highly worthwhile, if somewhat challenging, topic.
That said, does the Times know how to talk taxes, even after all these years? Porter had a worthy subject. But quickly, this text appeared:
PORTER (3/14/12): At first glance the budget does seem heavily tilted to take from the rich and redistribute to the rest. Taxpayers in the top fifth of the population shoulder three-quarters of the federal tax burden and receive only about 10 percent of entitlement spending, according to calculations by the Urban Institute and the Brookings Institution’s Tax Policy Center, and the Center on Budget and Policy Priorities.Yikes! Were the highlighted claims correct? Is it true that “taxpayers in the top fifth of the population shoulder three-quarters of the federal tax burden?” More strikingly: Is it true that “families in the bottom 40 percent of the income distribution pay less than 1 percent of taxes?”
Families in the bottom 40 percent of the income distribution pay less than 1 percent of taxes and receive about 60 percent of entitlements.
Frankly, we weren’t sure. Beyond that, we weren’t even sure we knew what Porter meant!
When Porter referred to “the federal tax burden,” which federal taxes did he mean? Presumably, he meant all federal taxes, including so-called “payroll taxes.” But he didn’t specify what he meant, and trust us—Times readers had no idea.
We were even more puzzled as Porter continued. When he said that the bottom 40 percent “pay less than 1 percent of taxes,” we assumed he meant “less than 1 percent of federal taxes.” But once again, he didn’t specify that—and if he meant “less than 1 percent of federal taxes,” did that include federal payroll taxes?
To our ear, “less than one percent of all federal taxes” sounded rather low. But then again, we didn’t know—and things got a bit more confusing as Porter continued.
Later in his report, Porter explained what percent of their income “the bottom 20 percent” would pay “in all federal taxes.” This represented a third construction concerning what taxes were being discussed.
To this confusion, let us add two glaring typos in our hard-copy Times, only one of which has been corrected on-line.
Outcome: We were left with a presentation which we found rather confusing.
Can we talk? This seems like a very careless way to discuss such major issues. As everybody understands, claims that lower earners don’t pay their fair share represent a major part of right-wing propaganda. Just for the sake of clarity, journalists should be very careful how they approach such topics.
Concerning that bottom 40 percent: Before you tell us what percentage of “taxes” they pay, it’s always a good idea to let us know what percentage of national income they receive. In many instances, amazing statistics get less amazing real fast when this fact is included.
In this case, we still weren’t sure what kinds of “taxes” Porter actually meant. Once again, is it really true? Do families in the bottom 40 percent of the income distribution really pay less than 1 percent of all federal taxes? Is that what Porter meant?
To this day, we simply don’t know. Therein lies a major problem, one which eclipses the Times.
Are we self-impressed human beings really “the rational animals?” If that were the case, you’d think we’d have an accessible way to answer these questions by now. Questions like these have driven our politics for the past many years. If we lived in a slightly rational world, accessible data bases would exist where such basic information was available.
Question: Do you know where you can go to answer such basic questions? Frankly, we do not. In the case of Porter’s column, we spent more than an hour googling around trying to answer our basic question: What percentage of all federal taxes are paid by the lower 40 percent of earners?
Based on our googling, we’re fairly sure it’s more than one percent. We’ll guess that Porter’s statistic referred to that group’s share of federal income taxes. But we still can’t say for sure. Eventually, we stopped looking.
(What percentage of income is earned by the bottom forty percent? Do you know where to go to find the answer?)
Question: What kind of society functions this way, decade after decade? The Hannitys pimp their invidious claims, convincing listeners that “those people” are failing to pay their fair share. But our biggest newspapers take a slacker approach to such questions—and no one gets around to creating a digest of basic information.
The information is available somewhere, of course. We’ll guess that Kevin Drum knows where to find it. But where do we the average folk turn? And in what kind of world is such basic information so maddeningly hard to find?
Let’s be clear. We aren’t suggesting that Porter was trying to reinforce Hannity’s claims. As a general matter, the thrust of his column went in the other direction. But we were struck by the slacker approach he took to such basic questions, with editors’ consent.
In what kind of society do we all live? Was it constructed by rational animals?
Why do progressives put up with this shit? And does the soul of Leona Helmsley live on at the New York Times?
Next week: Professors and corporate-picked liberals
I agree that the Times should have made it clear that they were addressing personal federal income taxes only, i.e., not wage taxes and not corporate income tax.ReplyDelete
Here's some figures for personal FIT from 2009:
The top 1% paid 36.7% of the total amount; the bottom 50% paid only 2.3% of the total amount.
The average tax rate was 24.01% for the top 1% vs. 1.85% for the bottom 50%.
Under the data you found at taxfoundation.org is what they call "important facts" about the data, one of which is:Delete
"The only tax analyzed here is the federal individual income tax, which is responsible for about 25 percent of the nation's taxes paid (at all levels of government). Federal income taxes are much more progressive than payroll taxes, which are responsible for about 20 percent of all taxes paid (at all levels of government), and are more progressive than most state and local taxes (depending upon the economic assumption made about property taxes and corporate income taxes)."
So, a back-of-the-envelope calculation regarding all tax liabilities in the USA:
(average FIT for all) / (% of total taxes) = (total tax rate)
11.06 / 0.25 = 44.24
(total tax rate) - (average FIT) = (average non-FIT rate)
44.24 - 11.06 = 33.18
Assuming other tax rates are flat across income groups (I believe they are actually regressive - the 20% that is payroll taxes certainly are), we get total tax rates of:
24.01 + 33.18 = 57.19
1.85 + 33.18 = 35.03
Now would you put a 57.19 to 35.03 ratio in bold?
That's a good job, Anonymous. You may be right that other taxes are on average flat across income groups. State income tax isn't flat. OTOH sales tax is regressive. It also depends on how one treats taxes not directly paid by individuals, such state and federal corporate income tax, property tax paid by landlords, employer portion of payroll taxes, etc.Delete
Anon, you produced one figure that deserves to be highlighted. Government, at all levels, took 44.24% of personal income in taxes in 2009. That's a lot. Furthermore, here in CA there are moves afoot to raise local and state taxes. Federal income tax will go up when the Bush tax cuts expire. I foresee the average tax rate here exceeding 50% in a few years. IMHO when the average Californian is working more for the government than for himself and his family, something is wrong.
44.24% average for *all* taxes is not a lot. It pays for the roads. It pays for the schools. It pays for water. It pays for sewage. It pays for clean air. It pays for the trash to be collected. It pays for the fire department. It pays for the police. It pays for the space program. It pays for international aid. It pays for the state and national parks. It should pay for health care. I'm glad that I live in a place that, by and large, understands that pooling resources for the greater good is almost always seen as progress.Delete
Bob, as you've been commenting on this sad state for several years, perhaps it would be good if your team threw in the towel and actually found a site that explained the figures or worked it up from LexisNexis yourselves - how much income and SS receipts, tax, government expenses, percentages, etc.ReplyDelete
A single page of pie charts and tables should do it, maybe even half a page, though explaining how SS payments are used now vs. not just locked away as non-entitlements, might be tricky.
I know you're not the NY Times - yet - but this might be your turning point.
I totally agree: it is hard to find well-explained data on the totality of your federal tax burden. Everybody with an agenda selectively quotes only part of the data. And most reporters without an agenda haven't a clue, they just pick up some version of the selectively-reported data.ReplyDelete
I recommend the Congressional Budget Office, which publishes comprehensive and well-explained tables every few years. This is the data that pretty much every other honest analysis starts from, before applying their own tweaks.
The CBO looks at four different ways in which we pay federal taxes:
1. Income tax, including refundable tax credits (meaning that the bottom tranches have a negative tax rate)
2. Payroll tax, including paid on your behalf by your employer
3. Excise tax, such as gasoline or telephone tax
4. Corporate tax, which is counted as if the stock holders (more exactly, the dividend receivers) paid it.
I think you can quibble with some of the CBO's methods. But I also think this is far and away the clearest and most complete no axe to grind explication.
Emmanuel Saez, Professor of Economics at UC Berkeley, has some useful information here: http://elsa.berkeley.edu/~saez/ReplyDelete
If you've heard me say this before, please stop me.ReplyDelete
Journalist or media could construct graphics for half a dozen or a dozen theoretical individuals &/or families showing raw dollars and percentages for income, expenses, taxes, etc. A reader could self-identify their composite. These theoretical families could be reference points for the effects of any proposal. Aside: At one time, I though TIME had a great graphics department that made sense out of complicated news.
I mainly agree with your point that we don't communicate our points real well, but it was remarkably easy to find the distribution of income in the U.S. I simply googled "percentage of income U.S and came up with this: http://www.google.com/search?client=safari&rls=en&q=percetage+of+income&ie=UTF-8&oe=UTF-8#hl=en&client=safari&rls=en&sclient=psy-ab&q=percetage+of+income+us&oq=percetage+of+income+us&aq=f&aqi=g-l4&aql=1&gs_l=serp.3..0i13l4.2831l3567l0l3608l3l3l0l0l0l0l325l459l0j1j0j1l2l0.efis.1.&pbx=1&bav=on.2,or.r_gc.r_pw.r_cp.r_qf.,cf.osb&fp=32a0db2695f1626c&biw=1171&bih=680ReplyDelete
Clicking on the first link, I found this wikipedia entry: http://en.wikipedia.org/wiki/Household_income_in_the_United_States
The 40th percentile make an average of $35,000 to $37,499 (assuming this was your question.
No, the average person will not look for this info, but it is readily available.
Well Bob, I tried to create one source of some basic tax data http://journals.democraticunderground.com/hfojvt/169ReplyDelete
but did not cover that question. I have spreadsheets though where I can look it up for various years from IRS stats. Bob at CTJ has done great work too, of course. His fact sheet on the "tax compromise" of December 2010 answers another part of those questions. Based on the percent they get of the payroll tax cut (which is straight 2%) tells me the percent of payroll taxes paid by various groups. 1 - (lowest quintile) pays 3.8%, 2 (second quintile) pays 8.3%, 3 - pays 15%, 4 - pays 26.3%, and 5 - pays 46.4%. The top 1% pays 3% of payroll taxes, the top 5% pays 14.1% and the top 10% pays 26.7%
Citizens for Tax Justice CTJ.orgReplyDelete
If you want info about taxes they're the people to ask.
You seem like me recently. You really should find a person to speak with the IRS for your benefit. Trust me; it actually helps you save time and expense. Presently, you will find a website that gives this all facts about tax relief companies influenced by their unique investigation. I wish it had been around just last year, because they definitely show which companies are questionable and which companies are truly worth investigating. This is the web address - http://www.consumertaxreports.org . You may even ask that they research a corporation that's not in their website up to this point.ReplyDelete
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