We’re just asking: On the front page of our hard-copy paper, the New York Times is reporting the news:
Yesterday, Rick Santorum didn’t wear a sweater vest. In San Juan!
On the rare occasion, columnists may discuss real news in the Times. Yesterday, Eduardo Porter discussed a very significant topic in his Economic Scene column.
We’ll discuss his column more next week. For today, consider these highlighted claims, which appear early on:
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.Take a look at those highlighted claims. Three questions:
Families in the bottom 40 percent of the income distribution pay less than 1 percent of taxes and receive about 60 percent of entitlements.
Do those claims seem accurate to you? Do you know which “taxes” Porter includes?
Do know where to go to fact-check those claims?
Information is rarely allowed in the Times. When information does appear, we’ll admit it—we’re sometimes confused.
Do those claims seem accurate to you? Yes
ReplyDeleteDo you know which “taxes” Porter includes? Personal income tax, but not corporate income tax nor Social Security/Medicare assessments.
Do know where to go to fact-check those claims?
It's pretty easy to find distribution of income tax paid by income level with various break points. E.g., this shows that the bottom 50% of earners pay 2.3% of total individual income tax. That figure seems consistent with the bottom 40% paying 1% of the total.
A fourth question Bob might have asked is: Which sorts of entitlement spending is the Times referring to. I would assume that they're not including Social Security and Medicare benefits.
However, I only know these things because I'm a wonk. The Times should have specifically said which type of taxes and which types of entitlement spending their figures related to.
Do those claims seem accurate to you? No. He needs to state explicitly that he is talking about federal income taxes.
DeleteDo know where to go to fact-check those claims? No It's not easy to find this information, especially the distribution.
Overall the reporter is parroting a misleading statistic; single point statistics are almost always misleading. Top 20% pay 75% of all [federal income] taxes...well, they also garner about 100% of all disposable income.
The link I provided above shows that the top 25% earn 65.8% of Adjusted Gross Income and pay 87.3% of federal income tax. The top 1% earn 16.9% of AGI and pay 36.7% of FIT.
DeleteThese statistics are not misleading. The rich really do pay the preponderance of FIT. The bottom half of earners are nearly getting a free ride, as far as FIT is concerned.
The bottom 50% earn 13.5% of AGI but pay only 2.3% of FIT. Furthermore, these figures don't reflect all the benefits the bottom 50% receive: welfare, Medicaid, food stamps, SCHIP, and many, many other special programs. OTOH I suspect that these figures do include the Earned Income Tax Credit. I.e., the tax paid by the bottom 50% probably includes a reduction for those who pay a negative income tax. Also, the bottom 50% do pay a substantial percentage for Social Security and Medicare.
The Times is a very liberal paper pointing out the facts. Entitlements are flowing to those at the bottom who pay no taxes. That is what Santorum is saying.
ReplyDeleteTV commentators on liberal channels like CNN and MSNBC have said this over and over. Even liberals like Anderson Cooper pointed out at a GOP debate that over half the country doesn't pay taxes. He's rich so he pays a lot. But the rich pay most of the taxes but don't get the entitlements as the Times says.
Bob didn't challenge what the Times reporter says so it must be correct. If there's no counterargument why wouldn't it be true?
The rich in this country are being short-sighted. In an unencumbered free market, the money flows toward the rich (the players with the capital are able to create products that they sell, for a profit, to individuals on the bottom of the pyramid, so the wealth travels upward). So in order to keep the economy heathy, there *must* be a mechanism to redistribute back to the less rich so they can keep buying products. Smart owners realize that high wages to your work force increases the wealth of the rich by keeping the demand up. Henry Ford learned this early in his assembly line days. He wasn't successful until he paid his workers enough so that they could afford cars.
DeleteSo it is actually not a moral imperative but a practical one that demands a redistribution of wealth downward. The rich of this nation are engaging in class warfare by bringing up a moral issue of whether poor people deserve to receive "entitlements." The current American upper class think that they can be the first to undo the economic law of noblesse oblige. Unfortunately, we are all riding on Icarus' back, up toward the sun.
I'm sorry but you use the term "liberal" (pardon the pun) a little too liberally. The New York Times can not currently be considered "very liberal" by any stretch of the imagination.
DeleteHoser
Also, I wouldn't consider Anderson Cooper an expert, or even knowledgeable on the subject. As Bob has pointed out in the past, your statement that "over half the country doesn't pay taxes" is a fallacy.
DeleteHoser
Excuse me, but everyone pays taxes.
DeleteEvery person who gets a paycheck pays wage taxes. Every person who buys something at the grocery store pays sales taxes. Are these not, in fact, taxes? Is the word "tax" that appears on my grocery store receipt a figment of my imagination?
To pretend that these forms of regressive taxes don't exist simply because these are the taxes paid by those at the bottom is class warfare.
The rich don't benefit directly from entitlements because they are rich. Big duh. What do they get for their money? The world's most powerful military to fight wars of choice to enrich their bottom lines and keep their access to oil flowing. A compliant government that picks the winners and losers in the marketplace and makes sure they don't have to take their losses, instead bailing them out of their bad financial decisions and setting them free again to run up new ones. Mouthpieces in the government to push their pet projects and ideologies. Militarized police forces to keep the rabble down. And yes, entitlement programs, which don't put money directly into their pockets but which smooth a band-aid over societal inequalities to ensure that the rabble are less inclined to pick up their pitchforks and mete out some French Revolution-style justice.
ReplyDeleteYes, I'd say the rich get a great ROI.
You're making an argument from a liberal position. But you didn't challenge the basic facts. Nobody is challenging the fact that the rich people pay most of the taxes. They don't get the entitlements.
DeleteEven liberal hosts of the debates don't challenge this. Where are the facts to bolster your argument? This is why the rich are saying no more tax increases. They are paying more than their share. They want the taxes cut. They want the spending to be under control. They want the country to go back to the levels of 2007.
If you have facts, please show them. David in Cal points to links and charts. The liberal hosts agree things are out of whack. Even Anderson Cooper does.
@Anonymous 11:44
DeleteWhat "basic facts" would you like challenged? Shall we start with these:
1) Since all working poor are subject to payroll taxes (over 7% directly out of the paycheck, and another 6%+ from the employer, which of course comes out of employee compensation, one way or another), and since these taxes fund SS and Medicare, the "fact" that the working poor don't fund entitlements is flatly incorrect.
2) Similarly, the notion that the rich don't benefit from entitlements if also plainly false -- just ask any rich retiree collecting SS and on Medicare. There are loads of them.
If you want to claim that the rich pay far more than the poor do in Federal taxes, you're quite right. But one needs to add here that since 47% or so of the public is stuck at subsistence wages, while the rich reap the vast majority of the benefits of living in the U.S., there isn't much alternative -- unless we want tax folks earning subsistence wages into starvation and impoverish children in this country beyond our already shameful levels.
As for "even liberal hosts of the debates don't challenge this", dear me. Which "liberal hosts" did you have in mind?
And "even" Anderson Cooper? You consider Anderson Cooper a leftist? You really need your own comedy show.
Anon and Anon -- You both make some good points. I agree that the rich in this country have a great ROI, as do all Americans. Almost all of us have a better life here than if our ancesters has remained in Ireland, Poland, Africa, India, China, or wherever.
ReplyDeleteTwo disagreements:
1. Please don't blame the rich for bringing up entitlements. The current class warfare was started by Obama and the Occupy Wall Street group,, with their attacks on the "top 1%." The rich are just defending themselves.
2. You don't need to start with money to become rich in America. And, plenty of people who start with money become poor.
Upward mobility is greatly overestimated, especially by the general public who hope to become wealthier. More movement is downward.
DeleteDavid in Cal;
DeleteI usually let everyone have his opinion, and don’t waste my time arguing with people that have long ago made up their minds.
However, I for one am tired of you shoring up broken ideology with mountains of numbers.
I am therefore going to ask you a few yes or no questions.
These questions involve your opinions of what is right and wrong, and therefore need no proof. I want only answers to these questions, not commentary on other issues.
To use a phrase beloved of the right, don’t lawyer up on me.
Or course, you may refuse to answer them. Most Republicans do. However, if that be the case, I will assume that you have no opinions on these matters, and there is no sin in that.
1. Is the Supreme Court’s Citizens United decision good for democracy and good for the United States?
2. Are unlimited corporate donations to political parties good for democracy, and good for the nation?
3. Are the Koch brother’s donations to Wisconsin politics good for democracy, and good for the United States?
4. Are the biggest problems facing the US economy today excessive taxation and regulation of major corporations?
5. Is the biggest problem facing the American economy today lack of customers?
Answer if you like, or ignore. I will understand either way. If you do choose to answer, do not use any numbers, surveys, statistics, tables, graphs charts, etc. Answer yes or no. There is no need to amplify, or explain, or digress. I assure you I will understand your meaning without all the elaborate exhibits and links you normally present.
1. Is the Supreme Court’s Citizens United decision good for democracy and good for the United States?
DeleteYes. It's constitutionally correct, and it helps offset the unfair power wielded by the media.
2. Are unlimited corporate donations to political parties good for democracy, and good for the nation?
Did you mean just corporate donations or did you mean to include labor unions and other organizations included in the CU decision? If it's the latter, your question #2 is similar to #1. I'd answer Yes.
IMHO it's the power of government that leads to corruption. One way or another, corporate and union interests will find a way to get what they want from politicians.
3. Are the Koch brother’s donations to Wisconsin politics good for democracy, and good for the United States?
Yes. Wisconsin is desperately trying to rein in the excessive cost of government employees. This cost is bankrupting California as I write, leading to higher taxes on the rich and lower services to the poor.
4. Are the biggest problems facing the US economy today excessive taxation and regulation of major corporations?
No. Governmental overspending, the federal deficit and national debt are the biggest problem IMHO.
5. Is the biggest problem facing the American economy today lack of customers?
No. In today's worldwide economy, we have 7 billion potential customers.
Thank you for your prompt and candid reply. My confidence in your ability to answer a question forthrightly has been restored.
DeleteOnward.
1. Please don't blame the rich for bringing up entitlements. The current class warfare was started by Obama and the Occupy Wall Street group,, with their attacks on the "top 1%." The rich are just defending themselves.
You say current.
Does that mean there have been other class wars in America that were fought and resolved, and this a new one that started in December 2011, when President Barak Obama declared he was a warrior for the middle class,
http://www.washingtonpost.com/blogs/plum-line/post/obama-to-gop-if-this-is-class-warfare-then-get-ready-for-a-very-long-fight/2011/03/03/gIQAmVIRoK_blog.html
after he had denied there was no class war, but only math?
http://www.cbsnews.com/8301-503544_162-20108238-503544.html
If so, what were the prior examples, and how were they resolved?
Just facts, no number required.
1. Is the Supreme Court’s Citizens United decision good for democracy and good for the United States? Yes. It's constitutionally correct, and it helps offset the unfair power wielded by the media.
DeleteWhether or not it is it is constitutionally correct remains to be seen.
The media are large corporations, how can they offset their own power?
2. Are unlimited corporate donations to political parties good for democracy, and good for the nation? Did you mean just corporate donations or did you mean to include labor unions and other organizations included in the CU decision? If it's the latter, your question #2 is similar to #1. I'd answer Yes. IMHO it's the power of government that leads to corruption. One way or another, corporate and union interests will find a way to get what they want from politicians.
The money provided by labor unions is a pale fraction of what multinational corporations can provide. Unions are providing local money, corporations are using money from all over the world to influence US elections.
It’s the ability to influence the direction of government power that leads to corruption. If both money sources are corrupting our government, how will allowing more money be salutary?
Are you saying the person paying the bribe is innocent of wrongdoing, but the politician accepting it is guilty? Where’s the morality in that?
3. Are the Koch brother’s donations to Wisconsin politics good for democracy, and good for the United States? Yes. Wisconsin is desperately trying to rein in the excessive cost of government employees. This cost is bankrupting California as I write, leading to higher taxes on the rich and lower services to the poor.
Wisconsin already got concessions more than a year ago. California’s referendum system and anti-tax measures by property owners caused most their problems, not collective bargaining by schoolteachers, police and fireman.
What benefit do working class Americans as opposed to Americans like the Koch brothers gain from ending collective bargaining?
4. Are the biggest problems facing the US economy today excessive taxation and regulation of major corporations? No. Governmental overspending, the federal deficit and national debt are the biggest problem IMHO.
David, that is soooo 2011!
So you agree that the Republican leaders, Republican campaigners, and Tea Partiers are all wrong when they make that claim? Bear in mind that they make that claim for all business, not just small businesses.
Do you also agree that an austere economy will be able to alleviate the problems you cite?
Please bear in mind that the deficit and debt were the major topics if the Republican Party until they were forced to accept the fact that Americans were more concerned about jobs.
They used that barnyard shovel until the job outlook improved, whereupon they tossed it aside for a bigger one of Constitutional rights of Catholics. Now that women voters have trumped the Catholic Church, what will be the next steaming pile the GOP will shovel at us?
5. Is the biggest problem facing the American economy today lack of customers? No. In today's worldwide economy, we have 7 billion potential customers.
You forget one thing, grasshopper. They aren’t buying what we aren’t selling. They are buying Chinese, Indian, and Indonesian products, just as we are, and that’s not potential, that’s here and now.
The Social Security Trust Fund has a balance of about $2.6 trillion. There is also a trust fund for medicare, which is not in as good shape as Social Security. These "entitlement" programs are funded by a dedicated revenue steam from the "payroll tax." This levy is not applied to income above @$100,000. I dobn't assume the NY Times reporter knows this and in any event we don't know whether and how these facts are used in the calculations. But really who cares! What we really need to know about is Seamus.
ReplyDeleteDavid in Cal -
ReplyDeleteBush the Younger's tax cuts are a much more important battle in the class war than the OWS protests, so the "you started it" retort is as chilish as it sounds.
Could you come up with some numbers to support "you don't need to start with money to become rich in America," because wikipedia doesn't agree with you:
http://en.wikipedia.org/wiki/Socio-economic_mobility_in_the_United_States
Anon, your cite provides some numbers:
DeleteA 2007 study "Economic Mobility Project: Across Generations," using Panel Study of Income Dynamics, found 67% of Americans who were children in 1968 had higher levels of real family income in 1995–2002 than their parents had in 1967–1971
and
An absolute majority of the people who were in the bottom 20 percent [of income] in 1975 have also been in the top 20 percent at some time since then. Most Americans don't stay put in any income bracket. At different times, they are both "rich" and "poor" -- as these terms are recklessly thrown around in the media. [...] There are of course some people who remain permanently in the bottom 20 percent. But such people constitute less than one percent of the American population, according to data published by the Federal Reserve Bank of Dallas in its 1995 annual report.
and
a US Treasury study of income mobility from 1996 to 2005 found that between 40-43% of those in the top 1 percent in 1996 were still in the top 1 percent in 2005. Only about 25 percent of the individuals in the top 1/100th percent in 1996 remained in the top 1/100th percent in 2005.
@David in Cal
DeleteWhich no doubt explains why the U.S. is dead last, or very close to it (depending on how we measure) in social mobility among industrial democracies, getting beaten out even by class-ridden Britain, and with much closer affinities to Mexico?
In this respect, we actually resemble a third-world nation.
Anyone who went to that site and read it for themselves will find out that you don't report honestly.
ReplyDeleteMight one suggest to Bob Somerby, that if he really doesn't understand how it is that the working poor fund their own entitlements, he might want to spend more time on actual issues, than on Gail Collins?
ReplyDeleteThat his strange approach to facts gives the Davids in Cal of this world opportunities for endless misinformation on this site might be considered another casualty of his peculiar brand of media criticism.
The rich are rich and doing well by definition. Many others aren't. The federal government has a big debt and somebody has to begin paying it down. Now, let's see, who has the money to do that? Hmmm. Must be people with money.
ReplyDeleteTax the rich.
That said, there is a strong argument for fair taxation. That's why it seems so unfair to people that someone like Romney pays less than 15% when they're paying 35% income taxes plus sales tax plus payroll tax.
Tax the rich.
Who caused our problems in the Great Recession? It sure wasn't poor folk who don't lobby Congress to change laws regarding derivatives.
Tax the rich.
Who gave millions, so Dubya could have two terms and double Defense spending, pass Medicare Part D without funding and many other things?
Tax the rich.
If the rich want smaller government they should stop supporting the big guvmint Republicans.
"What benefit do working class Americans as opposed to Americans like the Koch brothers gain from ending collective bargaining?"
ReplyDeleteBy ending collective bargaining by government employees, working class Americans gain state parks, public libraries, and all the other services that are being cut in order to pay out-of-line state and local pensions. Not only are these pension costs increasing, but they cannot be cut after the fact, because they're contractually earned by the workers. What we're moving toward in California is a state with poor government services, depite high state and local taxes, because more and more of the government's income goes to pay retired government workers.
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ReplyDelete