Wednesday, October 6, 2010

The Tax Debate

Below is a letter of mine that the Spartanburg Herald-Journal published today.  It captures my concerns about some of the subtle sleight of hand used in the current debate over extending current tax rates:

I agree with the Herald-Journal’s point that the failure of Congress to take a vote on extending the current tax rates was an example of political cowardice (“Votes not taken” editorial, Friday’s edition). But the rest of your presentation of the issue is misleading, at best.

First, you raise the specter of a tax increase for everyone and the prospect that an average family could see their taxes go up. You fail to note that no one — not Democrats in Congress, not Republicans in Congress, not President Barack Obama — is proposing that. In fact, the only way that outcome could possibly come about is if Republicans in the Senate filibuster to prevent the passage of any bill.

You also misrepresent the president’s proposal. You say it would allow tax cuts to “expire for those who make more” than $250,000. In fact, the first $250,000 of every single family’s income would continue to be taxed at the current rate. For those who make over that amount, the increased rate would apply only to the income over $250,000. In other words, if a family made $251,000, only $1,000 would be taxed at the new, higher rate. That means that this family’s tax bill would increase by perhaps $70 a year.

Lastly, you give a distorted presentation of the estate tax. “Should you be able to leave your money to your children ... ?” you ask. You do not note that in 2009, the first $3.5 million of any estate was exempted from any tax. How many of your readers will leave fortunes of more than that? A few, perhaps, but you suggest everyone would pay the estate tax, and that is simply not true.

I expect the Herald-Journal to champion the interests of the wealthiest Americans. But I also expect it to honestly present the facts when doing so.


  1. The "debate" over this tax cut proposal is quite misleading to most Americans. It is being misrepresented by many in the press and the politicians themselves. I do not begin to understand why that is the case, as the matter is really quite simple if someone bothers to explain it properly.

  2. Oh I am reposting this as well. Wonderful explanation.

  3. Thanks, Sylvie. I think the answer to your question is that they are afraid that an honest understanding would lead people to the opposite conclusion that they want them to reach. The intellectually honest case for zero tax increases on anyone now is that big deficits are good in a time of recession--but conservatives are simultaneously saying deficits are BAD and we need to cut spending. So they obfuscate.