NEW HAMPSHIRE — Yesterday, the Senate held symbolic votes on a pair of high-profile tax bills with important implications for the November election. Senators narrowly rejected a Republican-backed extension of all the Bush-era tax cuts in favor of a Democratic proposal that would preserve lower rates for taxable income below $200,000 per individual, or $250,000 per family, while allowing reductions in tax rates on income above those thresholds to expire.
Unfortunately, even though the debate over extending the Bush-era tax cuts has been a key point of contention between the parties since Obama took office, many reporters still haven’t learned how to accurately describe the competing proposals to their readers.
For instance, an Associated Press story on the Senate vote by Alan Fram that ran in the Nashua Telegraph and Concord Monitor today incorrectly suggested that no tax cuts would be extended for the wealthy under the Democratic bill. In his lede, Fram wrote, “Democrats pushed a yearlong extension of tax cuts for all but the highest-earning Americans through the Senate on Wednesday.” He later described the GOP proposal as “a rival Republican package that would have included the best-off in the tax reductions,” again suggesting that the wealthy would be excluded, and claimed that “the $250 billion Democratic measure would extend tax cuts in 2013 for millions of Americans…[b]ut it would deny those reductions to individuals making over $200,000 yearly and couples earning at least $250,000.”
Why is this wrong? Because under the Democratic proposal, all Americans would still pay lower rates on their first $200,000 (or $250,000) in taxable income. And up to that level, individuals who earn more would actually see a greater financial benefit. As analysts from the Center for Budget and Policy Priorities noted when reviewing a similar proposal back in 2010, “high-income people actually receive much larger benefits in dollar terms from the so-called ‘middle-class tax cuts’ than middle-class people do.”
The same mistake was made in a Boston Globe campaign notebook story today which claimed the GOP bill “would have extended the cuts for all taxpayers” while the Democratic proposal would “allow tax cuts on the wealthiest Americans to expire but would keep in place cuts for those making less than $250,000 annually.”
This framing was echoed at the national level, though the details were sometimes made clearer. Both The Washington Post’s Lori Montgomery and New York Times reporter Jonathan Weisman described the vote in their ledes as extending middle-class tax cuts while allowing them to expire for the wealthy. Montgomery only briefly acknowledges the details later in a reference to a previous tax-cut extension as preserving “breaks on income over $250,000 a year.” By contrast, Weisman specified clearly that the Democratic bill “would allow tax rates to rise on incomes, capital gains and dividends for earnings of more than $250,000.”
What’s so frustrating is that reporters’ misunderstanding of this point has been recognized for so long. Back in 2009, Emily Friedman of ABC News wrote a wildly misleading article suggesting that individuals would have incentives to reduce their income to below $250,000 to save money on taxes if Obama’s proposal were enacted. (After the piece was widely mocked, ABC published a corrected version with many of the same flaws.)
Nonetheless, we’re still facing the same problem more than two years later, as New York magazine’s Dan Amira and Slate’s Matthew Yglesias noted earlier this month. Why?
One problem, as Amira points out, is that Obama himself has reinforced the misleading framing in describing his proposal. During a speech at the National Urban League Convention in Louisiana yesterday, for instance, Obama said, “Just a few hours ago, the Senate moved forward a bill that we had promoted to keep middle-class tax cuts for 98 percent of Americans next year.”

As you correctly point out, the problem is not merely ignorance of marginal rates but also ignorance that the threshold is not $250,000 but rather taxable income of $250,000 for families or $200,000 for individuals. It's remarkable how often the latter figure is ignored by reporters, editors, commentators and even esteemed professors.
#1 Posted by RobC, CJR on Thu 26 Jul 2012 at 05:22 PM
So the president of the United States, famed for his eloquence and backed up by talented speechwriters, can't even describe it correctly --- and you're beating up on some AP hack?
Maybe the nuances of marginal-income tax rates are just hard to describe in English prose.
#2 Posted by Bruce Ross, CJR on Thu 26 Jul 2012 at 06:26 PM
.
Ah! There IS a nickel's worth of difference between Republicans and Democrats! (In election season rhetoric, at least.) Exactly one nickel!
#3 Posted by Dan A., CJR on Fri 27 Jul 2012 at 08:50 AM