Yesterday, The Daily Show had one of Jon Stewart’s greatest takedowns of Fox News—which is saying something.
The jumping-off point is Warren Buffett’s recent New York Times op-ed in which he pointed out, as he has numerous times over the years, that billionaires like himself pay lower tax rates than their secretaries and called for tax increases on millionaires. That sent the Fox News talking heads over the edge, of course. Fox Business’s Eric Bolling even asked if Buffett, one of the great capitalists of all time, is “completely a socialist” and several talked (including, I should say, CNBC’s Larry “Goldilocks” Kudlow) about “class warfare.”
Not coincidentally, as the Fox folks ramp up their propaganda machine, the leading Republican presidential candidates are talking about raising taxes. Really! On the poor and lower middle class, not the rich. I’m not kidding.
A couple of floors up, The Wall Street Journal is smart to point this out, even if its piece has a couple of flaws. I’m trying to imagine the Journal’s news pages, for instance, putting a “No Easy Answer on Tax Issue” headline on a story about Democrats campaigning on raising taxes on the rich.
The story starts off well, immediately contextualizing the often-used-to-mislead fact that nearly half of Americans pay no federal income tax:
After two decades of bipartisan tax policy, nearly half of all American households don’t pay federal income taxes. Now, Republican presidential candidates are making a politically challenging case to change that fact.
Most working Americans do pay Social Security and Medicare payroll taxes.
But, here’s the next sentence (emphasis mine):
But because of tax breaks for seniors and inducements for work and raising children, among other accumulated changes to the tax code, many manage to avoid income taxes altogether. The nonpartisan Tax Policy Center in July pegged that number at 46% of U.S. households for this year.
You know how most of these people “manage to avoid income taxes”? By being poor. Also, most of those folks do pay income taxes at the state and/or local levels. But the Journal never notes either of these points in its story. This is as close as it gets:
About half of the households that pay no income tax do so simply because the standard deductions for tax filers and dependents are large enough to negate taxable earnings.
Stewart gets it, pointing out that the bottom 50 percent owns just 2.5 percent of the wealth. That’s a bit misleading, since we’re talking about income taxes here. Using that measure, the bottom half earns 12.5 percent of the total income in the U.S. But it’s not totally unfair, since wealth indicates people’s ability to pay. It’s worth noting that the bottom half pays 2.7 percent of all federal income taxes, which is roughly equivalent to its ability to accumulate wealth (I’ve clipped this part of the segment on Hulu).
The Journal is good to point out the candidates’ hypocrisy here, noting that one of the big reasons why the poor don’t pay federal income taxes is because of the Republican Party’s own policies, including Reagan ones:
The earned-income credit was Ronald Reagan’s answer to welfare, a way to make even low-wage jobs pay better than the dole. The child credit, another Republican idea, was doubled in President George W. Bush’s 2001 tax cut and is a favorite of religious conservatives.
And the Journal does a sweet job of calling out Romney, Bachmann, and Perry for their incoherence:
Pressed on how they would bring more people into the tax system, none of the top three campaigns offered details. Alice Stewart, a spokeswoman for Mrs. Bachmann, said the Minnesotan “believes that the tax code is too complicated and must be reformed to be fairer and flatter.”
Campaign spokeswoman Gail Gitcho said Mr. Romney “is opposed to tax increases,” adding he would produce his economic plan in the fall.
It would have been worth pointing out that while lots of folks don’t pay income taxes, federal payroll taxes are highly regressive, as are overall state and local taxes. That’s how you end up with charts like this: