The phony talking point that Democrats have proposed the "largest tax increase in American history" (see here and here) continues to spread.
Vice President Cheney repeated it yesterday at a reception for Senator Jeff Sessions:
The Democrats in the Senate recently passed their budget, which calls for more spending and higher taxes. In fact, they are trying to enact the largest tax increase in history. We've got a better idea -- Congress should pass the President's budget and make all of the Bush tax cuts permanent.
And former House speaker Newt Gingrich also repeated the claim, along with a slew of misleading "average" tax cut statistics, in Human Events:
But guess what? Liberals are at it again.
Just three months into their majority, Democrats are once again proposing the biggest tax increase in history.
This month, the House of Representatives will debate the Democrats' 2008 proposed budget. If it is passed, this budget will impose the largest tax increase in history on American taxpayers -- totaling nearly $400 billion over five years. Families with children, low-income families, and small businesses all would be hit with hundreds if not thousands of dollars in increased taxes.
Just what taxes will be raised? Here are some of the specifics of the liberal proposal:
* The 10% Tax Bracket Will Become 15%: More than five million families and individuals who previously owed no taxes will become subject to taxation.
* Marriage Penalty Relief Will Be Eliminated: 23 million Americans will owe an average of $466 in additional taxes in 2011.
* The Child Tax Credit Will Be Cut in Half: 31 million Americans will pay an average of $859 more in taxes in 2011.
The Liberal Tax Increase: How Much More Will You Pay?
But enough cold, impersonal statistical analysis. How much more in taxes will you and your family pay if this massive liberal tax increase is passed?
The Republicans on the Senate Budget Committee crunched the numbers and came up with some results that should frighten all of us, regardless of whether we're Democrats, Republicans or Independents.
You Know You're Going to Pay More Under the Liberal Tax Increase When ...
... You're a family of four earning $60,000 a year: Your income-tax bill will rise 61% in 2011, from $3,030 to $4,893.
... You're an elderly couple earning $40,000 a year: Your taxes will go up by 156% in 2011, from $583 to $1,489.
... You're a woman: You could be one of the 83 million American women who could see their taxes rise by an average of $2,068.
... You're married: You could be one of the 48 million married couples who will pay an average of $2,899 more under the liberal tax increase.
... You have kids: 42 million families with children will pay an average of $2,181 more in taxes.
... You're a small-business owner: 26 million small-business owners will get a tax bill for an average of $3,960 more than before.
Which one are you?
Maybe I'm missing something, but I think your alarm over some of the rhetoric about average tax effects is misplaced.
If you inveigh against saying that the average tax effect of a proposal on taxpayers with a broad range of incomes (e.g., the average effect on everyone earning more than $50,000 a year), I agree with you. That hides the effect on taxpayers in different brackets.
However, if what you object to is statistics about the average effect on, for example, a family of four earning $60,000 a year, that doesn't make a lot of sense. Of course that sort of averaging fails to take account of individual differences in deductions, etc., but that's the nature of averaging in any context. Considering the average effect of tax proposals at different income levels is something everyone does in order to assess progressivity or lack thereof and to judge where the burden of the proposals falls. That's true of Republicans, it's true of Democrats, it's true of economists as much as polemicists. It's a fundamental component of tax discussions.
Though I disagree with you about the mischief involved in discussing averages, I take your point about whether it's appropriate to treat the effect as a tax "increase." But that's a separate rhetorical device and a separate issue.
Posted by: Rob | April 03, 2007 at 10:49 AM