Luntz exaggerates SOTU tax cut "average"

Oh, the echo chamber.

During the State of the Union, President Bush offered one of his trademark misleading "average" tax cut statistics:

Unless Congress acts, most of the tax relief we've delivered over the past seven years will be taken away. Some in Washington argue that letting tax relief expire is not a tax increase. Try explaining that to 116 million American taxpayers who would see their taxes rise by an average of $1,800.

But as I pointed out, that figure is skewed upward by the large tax cuts received by those Americans with the highest incomes. The middle quintile of the income distribution only received a tax cut of $814 in 2010 from the 2001-2006 tax cuts.

This already misleading claim was then distorted further by Republican pollster Frank Luntz, who falsely paraphrased it to a focus group on Fox News by asking "Over 100 million Americans would see their taxes rise $1,800. Doesn't that concern you?"

Sadly, a lot of people probably interpreted Bush's claim the same way.

Comments

[Rob]

Speaking of misleading claims, it's not correct that Obama and Hillary Clinton "have only proposed rolling back President Bush's tax cuts for those making over $200,000." Wouldn't you just know, it depends on what the meaning of "those" is.

It appears that it doesn't mean individual taxpayers, which is what one would assume from your characterization. Hillary has proposed (see page 11) discontinuing the Bush tax cuts for the top two income tax brackets. The top two brackets kick in at $164,551 for a single individual and $200,301 for married couples filing jointly. (Even if Hillary's qualification of "for households over $250,000" applies not just to the Bush increases in tax exemptions but to the discontinuation of tax cuts for the top two brackets, do you think Hillary means "household" to apply to a single individual? I'm betting that qualification would apply only to married couples filing jointly.)

I haven't found anything from Obama more specific than that he "will reverse most of the Bush tax cuts for the wealthiest taxpayers." I feel pretty confident, however, that any dollar figure he uses for whom his tax cut rollbacks would affect apply to married persons filing jointly and that the number for affected single individuals would be lower.

[Howard]

Whoever wins the Presidency will find tax reform necessary. Republican or Democrat.

We have huge deficits looming - larger than any spending cuts can contain. As a matter of fact, it will be difficult to have any net spending reduction.

Adding to that, the projected deficits are masked to some degree because the AMT (as it exists now) acts as an annual tax increase on households in the upper middle income brackets and above. There has been reoccurring legislation every year to soften those increases but the projected budgets still include the benefits (to the Treasury) of those revenues.

To fund a fix to the AMT there will have to be tax increases elsewhere.

There are also calls to lower corporate income taxes – if enacted those cuts will need to be funded as well.

The Bush tax cuts were passed as “temporary”. They couldn’t be passed on a permanent basis because of the cost in lost revenue. It's apparent that the projections used to justify the initial cuts have turned out to be overly optimistic. We have to deal with that and not pretend it isn't true or doesn't matter.

[Rob]

The rollbacks in tax cuts (Brendan resists calling them tax increases) proposed by Clinton and Obama are like the pea in a shell game. Keep your eye on those tax rollbacks. Now they're under the first shell, the source of funding for universal health care. Now they're under the second shell, the solution to the deficits. Hold on--now they're under the third shell, the way to pay for universal pre-K and repeal of the AMT and tax relief for the middle class. The shells move so quickly it's hard to know which one the tax rollbacks are in.

And how are Democrats different from the suckers in the crowd betting on the game? Here's how: The players may not know where the pea is, but at least they understand it can be in only one place. Democrats, on the other hand, are willing to believe the tax cut rollbacks can do everything at once.

Step right up, ladies and gentlemen.

[The Objective Historian]

One thing Bush critics always elide or outright wrongly deny: The federal income tax is MORE progressive now than in 2003. As a percentage of what they paid in taxes, the tax cut for the poorest (often earned income tax credits) and middle income was greater than the tax cuts for the rich. This is the 100% truth. George W. Bush made the income tax system more progressive with the 2003 cut.

TOH

[Howard]

How about we pay for current spending and then debate future spending ?

We (as a nation) can have a seperate discussion about the value of the different programs themselves (including their cost).