And later that month, Tax Policy Center co-director William Gale offered these thoughts:
[T]he effective tax rate on small business income is likely to be zero or negative, regardless of small changes in the marginal tax rates. This is for three reasons. First, small businesses can expense (immediately deduct in full) the cost of investment. This alone brings the effective tax rate on new investment to zero, regardless of the statutory rate. Second, if they can finance the investment with debt, the interest payments would be tax deductible, making the effective tax rate negative. Third, they can deduct wage payments in full, so the marginal tax rate should have minimal impact on hiring.
In other words, while plenty of people—including, certainly, most Republican primary voters—prefer lower tax rates, the idea that higher top-end rates create unique problems for job-creating small business owners doesn’t really hold up.
The fallout from Schroyer’s interview with Lamborn has focused on a bizarre but entertaining twist involving some maladroit comments that prompted Lamborn’s predecessor, Joel Hefley, to call the congressman a “knucklehead”—and Lamborn in turn to complain that the Gazette treated him “shabbily,” and to urge other candidates to turn down the paper’s interview requests. That move earned Lamborn a deserved lampooning from both the Gazette’s editorial page and the Denver Post. But there’s room here for the Gazette to deliver a different sort of follow-up: a report that sets the record straight on the possible impacts of a shift on tax rates, and brings some needed scrutiny to the candidates’ other claims as well.
One model for that approach was offered by a local TV station, KOAA News 5, which earlier this month produced a pair of “Truth Checks” assessing the veracity of Lamborn and Blaha’s TV ads. The tax cut debate—and policy debates in general—were not addressed in the ads, which focused instead on personal attacks. Still, reporter Zach Thaxton’s clear, concise segments—which offered thorough explanations of what was true, what was false, and what was true-with-caveats—are a good example of how to use reporting to provide critical context and set the record straight.
Here’s Thaxton’s report on a Lamborn ad:
And here’s the segment on a Blaha ad:
Campaign coverage needs to do more than referee mudslinging, of course, even if that’s all the campaigns are offering. But the spirit behind these segments will serve journalists well—whether the subject is personal attacks or policy debates—from now through Election Day.