24 Sep 2010 22:55
People, newspapers, bloggers, and darn near everyone — all of them continue to misunderstand or misrepresent Obama’s proposal to extend some of the Bush tax cuts. In fact, Obama can’t even describe his own proposal correctly.
Wrong or misleading:
- “Obama and congressional Democratic leaders want to allow the Bush-era breaks to expire for families earning more than $250,000 beginning next year. But they’ve run into opposition from Republicans as well as a growing number of centrist Democrats.” [Wall Street Journal]
Fact: Under Obama’s proposal, Bush-era tax breaks will continue, not expire, for families earning more than $250,000, but they will only continue on the first $250,000 in income. Families making more than $250,000 will receive the largest benefit from Obama’s proposed legislation.
- “Asked at a CNBC forum what he would do to improve the outlook, Obama repeated his opposition to extending Bush era tax cuts for those with incomes over $250,000 a year.” [Associated Press, via Yahoo!] Fact: Obama is not opposed to extending Bush era tax cuts for those with incomes over $250,000 a year. In fact, he proposes to do exactly that — extend Bush era tax cuts for them, although only on the first $250,000 in income.
- “[B]y proposing to extend the rates for the 98 percent of households with income below $250,000 for couples and $200,000 for individuals …” [New York Times]
Fact: Obama proposes to extend those same rates (the tax rate on the first $250,000 of income) for the other two percent of households also.
- “Obama wants to eliminate the cuts for wealthier taxpayers — individuals making more than $200,000 per year and families with income totaling more than $250,000.” [Boston Globe]
Fact: Obama does not want to eliminate the cuts for wealthier taxpayers, only reduce them, and only on income earned above the threshold. Ironically, eliminating the tax cuts in 2011 (for both wealthier and non-wealthier taxpayers) is what Bush signed into law.
- “Here’s what I can’t do: I can’t give tax cuts to the top 2 percent of Americans—86 percent of that money going to people making a million dollars or more—and lower the deficit at the same time. I don’t have the math.” [President Obama]
Fact: Obama is proposing tax cuts for the top 2 percent of Americans. Bigger ones than for the rest of us, in fact. He’s right about not having the math, though.
- “The other day I noted that five national polls revealed solid majority support for ending the Bush tax cuts for the wealthy.” [The Washington Post]
True enough, but why are all the pollsters measuring popular support for a policy no one is proposing? Both the Democrats and the Republicans propose continuing Bush tax cuts for the wealthy. The Republicans propose continuing all of them, the Democrats only some (but “only some” still means more than for nonwealthy Americans).
- “President Obama proposes to let the Bush tax cuts for the rich expire …” [Diane Lim Rogers, in CNN Opinion]
- “[T]hose rich people are getting a tax cut, too. In fact, in terms of total dollars they are getting the biggest tax cut of all.” [Newsweek]
- “I think people are actually quite confused about how the tax cuts work.” [Ezra Klein, in The Washington Post]
Ezra illustrates his point with the picture embedded below. (The folks who get it wrong don’t draw pictures. If you can’t draw it, you probably don’t understand it.) In Ezra’s chart, the blue and grey dots measure the proposed 2011 tax cuts under the two parties’ proposals. I’m not sure why the Republican’s aren’t their usual red. Maybe red evokes red ink? (But how wrong would that be?) Under current law, there will be no 2011 tax cuts, so you can imagine a third column, labeled “Bush Law” with no dots.
Under Obama’s proposal, the biggest dots go to those making the most. Under the Republican proposal, the biggest dots go to those making the most. The difference? Under the Republican plan the biggest dots are rather grotesquely big. No one (except for the Bush law, and perhaps Obama in a past life) is proposing “no tax cuts for the wealthy.” No one is proposing “tax cuts only for the middle class.” Not even close. Both parties are proposing to give the biggest¹ tax cuts to the wealthiest, and smaller tax cuts to the middle class and poor.” Of course, for the middle class and poor, there’s not as much to cut from, and there’s no simple way to grasp the bigger economic picture that surrounds this issue, but that doesn’t excuse all the misinformation.
¹ To be precise, Obama’s proposal gives the absolute biggest cut to those making about $500,000 a year, and the absolute wealthiest earners receive a tiny bit less (tiny for them, anyway), as can be seen from Ezra’s chart.