How the media lost the plot on US taxation

[Newsjock]

http://www.guardian.co.uk/commentisfree/cifamerica/2012/jan/18/how-media-lost-plot-us-taxation

The media doesn't seem to understand the basics about budgets – and the inescapable relationship between aggregate revenues, aggregate spending and total deficits. Either that, or reporters just choose to play dumb. The end result is the same, however: journalists don't probe deeply – or they probe when it is too late to matter – into budget proposals and their real-world consequences (as opposed to regurgitating the talking points politicians issue to "explain" them). They are also generally unaware of easily obtainable historical data and historical trends, and how these predict the likely outcome of current fiscal policy choices.

The point is this: we will always have big deficits as long as tax policy is radically different from the post-second world war average until about 1981. And Republicans now want to cut taxes, mainly on the wealthy, even further. So the GOP's moaning about the deficit has no credibility whatever to anyone who knows budgets. But most people, and most reporters, don't know that during the Eisenhower administration, the top marginal rate was 91%, and that it was 70% for the following two decades or so, and that capital gains (which accrue overwhelmingly to the rich) were usually taxed as ordinary income. That lack of perspective distorts a whole range of popular assumptions about social equity now versus, say, the 1950s.

Rarely is it ever stated in the media that taxes under Obama are lower even than under George W Bush (for example, tax cuts in the stimulus, the payroll rate reduction and some other minor tax policies). Early in the Obama administration, revenues fell below 15% of GDP – the lowest in close to 60 years. But you never hear that. Instead, the public dialogue has been pre-empted by ideologues who claim Obama is a tax increaser, a Kenyan socialist, etc. As a result, lots of low-information voters think Obama raised their taxes – when he reduced them. Because of stereotypes about the parties that filled the vacuum a lack of accurate information had created, many average voters have no clue about which party advocates which policy.

[Laelth]

1. k&r for the truth. n/t

-Laelth