Truth in Budget Numbers
by Linda Beale
Truth in Budget Numbers
crossposted with Ataxingmatter
Seems like everybody these days is into misrepresenting, distorting, or at least stretching the facts to suit the spin they want to give.
One issue that I raised in my snarky post on the 15th about the Budget commentary was the way most media has described the December 2010 Tax Relief ….and Job Creation Act. As you will recall, that bill extended the Bush tax cuts for another two years, and most of the media talks about it as a “tax cut” bill. But in fact that bill ended the “Making Work Pay” provision, a cornerstone of the Obama Administration’s attempt to make the stimulus package work for ordinary Americans. The end of that provision resulted in a substantial tax increase for 51 million Americans in the lower income distribution. See, e.g., Floyd Norris, Some Taxes Went Up (Feb. 4, 2011); Tax Policy Center, Table on the 2010 tax bill (Dec. 13, 2010). When we talk about that bill, wouldn’t it be more accurate to discuss it as a tax bill that increased the burden on some of those in the most unfortunate circumstances, while giving substantial tax cuts to those at the top?
FactCheck.org, of course, spends its time looking for just those kinds of distorting statements and trying to set the record straight so that we are all talking about the same set of facts.
They did an analysis of the “Budget Spin” that both sides put out surrounding the release of the President’s Budget. Both sides get very bad grades. Both sides misrepresent facts–neither Democrat nor Republican is immune. And those misstated facts spread like wildfire over the net, as illustrated by Sarah Palin’s “mis-tweet” claiming that the White House is proposing a mere $775 million in cuts amounting to less than 1/10th of 1% of the deficit and linking to Glenn Beck’s right-wing website as proof. The truth is quite different–$33 billion in discretionary cuts for 2012, and the website link from which she got her information was a mischaracterization of some examples offered by White House Budget Director Lew that was posted 5 days before the budget release. But Palin’s “mis-tweet” has been “re-tweeted” and that is the way misleading information is spread so easily on the net.
PS if you enjoyed this you will also enjoy Floyd Norris on Life at the Dakota, noting the miracles (or at least, loopholes) achieved by someone with a mere $1.5 million in taxable income and outlays considerably greater just on housing…
Linda,
Seems like everybody these days is into misrepresenting, distorting, or at least stretching the facts to suit the spin they want to give……..The end of that provision resulted in a substantial tax increase for 51 million Americans in the lower income distribution
Given that in your previous post http://www.angrybearblog.com/2011/02/david-cay-johnston-on-stiffing-working.html you identified that Two-thirds of the poorest quintile had a tax increase of $134 (about 1.3% of total cash income).
A tax increase of $134 is “substantial”? As coberly would say, “that’s about 30 cents a day.” That is “stiffing the poor”? You are spinning also.
Sammy said: “A tax increase of $134 is “substantial”? As coberly would say, “that’s about 30 cents a day.” That is “stiffing the poor”? You are spinning also.”
The numbers given result in a pre-tax income of $10,307. The 2010 tax brackets take 10% of income up to $8375, and 15% above that to $34,000. So, tyhat earner pays in Federal income taxes $1,127, leaving him with $9180.
Hey, that’s a whole $25 a day! Obviously a lost 30 cents a day will mean nothing to a guy who has $25 to throw around. Not.
sammy
i haven’t checked the numbers and i don’t know what the baseline is. but i would agree with you that 30 cents a day is not substantial even for low earners… depending on how low. and i have no problem with raising taxes even on the poor to pay for needed government services.
but i also agree with noni that it’s not a good idea to raise taxes even a little bit on people who don’t have enough to eat or pay rent. there is a difference between 30 cents per day on someone who makes 10,000 per year, and 40 cents per week on someone who makes 40,000 per year.
The other part of Linda’s point, I think, was the dishonesty of raising taxes on the very poor while claiming to be cutting their taxes and actually cutting the taxes of the very rich very significantly.
btw
the social security tax increase that would be required to pay for the expected costs of living longer would amount to abut 2 cents per day for a person earning 10,000 per year.
Noni, I calculated the EITC for a family of four living on that $10,130. Here’sw the result.
“Based on the information you provided, you may be eligible to claim the Earned Income Tax Credit and your estimated credit amount for 2010 could be $4,050.”
So the family of four would get a refund of the difference of their tax liability. At that income they have no tax liability so they get the entirety of the $4,050, a ~40% increaee in income.
(If I am wrong someone please correct.)
Of course, the good news about the demise of the Making Work Pay provisions is that so many people are unemployed that they’re already busted and living on the street. A little panhandling should handle the $134 tax increase quite easily. And, failing that, are there no prisons? Are there no workhouses? NancyO
CoRev
my tax bill looks more like Noni’s analysis than yours. It’s funny what a little careful selection of “facts” can do for you. Of course, to someone earning over a 100k per year, that 4000 tax rebate must look like a windfall to a family of four.
Really an excellent reason to claw back 134 dollars… just to keep anyone from understand what is going on, and give them something pointless to argue about.
here let me help you out with the pointless arguments.
30 cents a day would be about ten dollars a month. approximately my heat bill in winter. no doubt the government has a better use for the money than that family of four.
and lest you think i am inconsistent when i point out that the SS tax increase needed is 40 cents per week, and then go to the trouble to show that 30 cents per DAY might be significant to a family of four living on 10k/y, The family of four would only pay about a dime a week toward their SS and they would get the money back. I don’t hear of any plans to give them back the two dollars per week the recent tax increase cost them.
And, yes the difference between pennies per day and dollars per year is significant when you are living on the edge of starvation, as opposed to pulling down a hundred k per year and living on the edge of a really good bottle of champagne.
Linda Beale – “One issue that I raised in my snarky post on the 15th about the Budget commentary was the way most media has described the December 2010 Tax Relief ….and Job Creation Act. As you will recall, that bill extended the Bush tax cuts for another two years, and most of the media talks about it as a “tax cut” bill. But in fact that bill ended the “Making Work Pay” provision, a cornerstone of the Obama Administration’s attempt to make the stimulus package work for ordinary Americans. The end of that provision resulted in a substantial tax increase for 51 million Americans in the lower income distribution. See, e.g., Floyd Norris, Some Taxes Went Up (Feb. 4, 2011); Tax Policy Center, Table on the 2010 tax bill (Dec. 13, 2010). When we talk about that bill, wouldn’t it be more accurate to discuss it as a tax bill that increased the burden on some of those in the most unfortunate circumstances, while giving substantial tax cuts to those at the top?”
How can you make the claim that the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 ended the Making Work Pay Credit provision of the American Recovery and Reinvestment Act of 2009? You may be dissatisfied that another bill did not extend the Work Pay Credit provision of the ARRA Act, but the December 2010 Act did not end the Making Work Pay Credit provision. The truth is that the ARRA Act terminated the Making Work Pay Credit provision on December 31, 2010. That is stated in the ARRA Act and reflected at the IRS website that discusses the provision. Here are the facts:
The American Recovery and Reinvestment Act of 2009: Information Center
IRS
http://www.irs.gov/newsroom/article/0,,id=204335,00.html
and
http://www.irs.gov/newsroom/article/0,,id=204447,00.html
“Making Work Pay Tax Credit. This credit means more take-home pay for many Americans in 2009 and 2010.”
“In 2009 and 2010, the Making Work Pay provision of the American Recovery and Reinvestment Act will provide a refundable tax credit of up to $400 for working individuals and up to $800 for married taxpayers filing joint returns.”
American Recovery and Reinvestment Act of 2009
pages 195-196
http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=111_cong_bills&docid=f:h1enr.pdf
and
http://www.recovery.gov/About/Pages/The_Act.aspx
“SEC. 1001. MAKING WORK PAY CREDIT.”
“(e) TERMINATION.—This section shall not apply to taxable years beginning after December 31, 2010.”
Subtitle A—Tax Relief for Individuals and Families
PART I—GENERAL TAX RELIEF
SEC. 1001. MAKING WORK PAY CREDIT.
(a) IN GENERAL.—Subpart C of part IV of subchapter A of chapter 1 is amended by inserting after section 36 the following new section:
“SEC. 36A. MAKING WORK PAY CREDIT.
“(a) ALLOWANCE OF CREDIT.—In the case of an eligible individual, there shall be allowed as a credit against the tax imposed H. R. 1—196 by this subtitle for the taxable year an amount equal to the lesser of—
“(1) 6.2 percent of earned income of the taxpayer, or
“(2) $400 ($800 in the case of a joint return).
“(b) LIMITATION BASED ON MODIFIED ADJUSTED GROSS INCOME.—
“(1) IN GENERAL.—The amount allowable as a credit under subsection (a) (determined without regard to this paragraph and subsection (c)) for the taxable year […]
MG
somewhere in the world there is the concept of “makes a difference.” apparently Linda got the wrong Act.
nevertheless, at the same time the Making Work Pay Credit provision expired, it was replaced with a Tax Relief act that provided less tax relief than the Making Work Pay… so Linda’s claim is for all practical purposes “true” however the facts were distributed among the various acts.
fine for you to point out her mistake, but “false claim” is a little strong, and… well, unfortunately, i have seen Fact Check make exactly the kind of error you are making here: getting all up about a trivial error, while the substantive harm goes unremarked.
I believe this is what Scripture calls straining at a gnat and swallowing a camel.
I thought the bottom 50% didn’t pay federal income taxes. Uhhh, what’s going on here? You’re telling mew someone making 10K per year pays federal taxes? I just finished my teenage daughter’s federal tax return for her summer job and although she only made about 5K she got a refund, much less owed taxes. What gives?
Hmm:
~42% of taxpayers pay no income tax and also make ~10% of the total cash income. Yea, we lost a lot tax revenue there Little John
little john
i pay taxes. i am in the bottom 50%. I may be in the bottom 20%. The “they don’t pay taxes” is another lie. comes by stretching the truth.
It was a false claim. Pure and simple. And it’s not the first time I noted such problems with Bealie’s posts.
Your defense of the game that Beale plays with the facts is laughable. As a tax attorney, she should know her facts before she makes such false claims. I expect that she does, but it doesn’t support her rants. It’s all in the packaging, the story that she elects to tell. In this case, fiction.
It was a false claim. Pure and simple. And it’s not the first time I noted such problems with Beale’s posts.
Your defense of the game that Beale plays with the facts is laughable. As a tax attorney, she should know her facts before she makes such false claims. I expect that she does, but it doesn’t support her rants. It’s all in the packaging, the story that she elects to tell. In this case, fiction. All for a purpose.
it’s not clear if your daughter got her withholding back or if she got a negative tax. it helps to be clear. even in your own mind.
Linda Beale, a tax law professor, should know her facts before she makes false claims about tax bills. I expect that she does, but it doesn’t always support her blog rants. It’s all in the packaging, the story that she elects to tell. In this case, fiction. All for a purpose: attack the latest tax bill.
Beale bundled her tax bill story up with this paragraph closer: “When we talk about that bill, wouldn’t it be more accurate to discuss it as a tax bill that increased the burden on some of those in the most unfortunate circumstances, while giving substantial tax cuts to those at the top?” That’s another distortion of the facts presented as a question to readers. Beale couldn’t have made this claim if she stated factually that the ARRA Act terminated the Making Work Pay Credit provision. She would have had to rework her narrative due to the false claims that she stated in the second paragraph.
Beale should have taken her opening statment more seriously instead of subsequently stating a false claim: “Seems like everybody these days is into misrepresenting, distorting, or at least stretching the facts to suit the spin they want to give.”
Linda Beale, a tax law professor, should know her facts before she makes false claims about tax bills. I expect that she does, but on this matter the facts wouldn’t support her blog rant. It’s all in the packaging, the story that she elects to tell. In this case, fiction. All for a purpose: attack the latest tax bill.
Beale bundled her tax bill story up with this paragraph closer: “When we talk about that bill, wouldn’t it be more accurate to discuss it as a tax bill that increased the burden on some of those in the most unfortunate circumstances, while giving substantial tax cuts to those at the top?” That’s another distortion of the facts presented as a question to readers. Beale couldn’t have made this claim if she stated factually that the ARRA Act terminated the Making Work Pay Credit provision. She would have had to rework her narrative due to the false claims that she stated in the second paragraph.
Beale should have taken her opening statment more seriously instead of subsequently stating a false claim: “Seems like everybody these days is into misrepresenting, distorting, or at least stretching the facts to suit the spin they want to give.”
coberly:
Very true . . .paying taxes, paying federal taxes, and paying federal income taxes are three different topics.
just to be clear, i pay federal income taxes. at a rate of 10% effective, 15% marginal, on an income that is well within the bottom quintile.
and little john, at least, doesn’t seem to be clear about the difference between a tax refund and not paying a tax.