Monday, September 06, 2004


Dispatch bungles tax comparison story . . .

In "On the Waterfront," Terry Malloy (Brando) says: "I coulda had class. I coulda been a contender. I coulda been somebody, instead of a bum, which is what I am." Will the Dispatch's Mark Niquette say the same thing at the end of his career?

Niquette is a young, seemingly earnest writer who puts a lot of effort into his stories - only to get lost somewhere before he reaches the end. His story in today's paper, a head-to-head comparison of the Kerry-Bush tax stances looked like it could of been a champ. Head-to-headers are sorely missing in this campaign, so I had a lot of hope as I started to read it.

Rather than quickly and directly going to the unargueable facts (namely that the middle class - at least the middle 40% of the population - got fully screwed and had their federal tax burden actually increase, and that the lowest 40% had their tax burden reduced by a miniscule amount compared to the wealthiest 20%), Niquette digressed into the vile "one-side-says-this-and-the-other-side-says-that" crap that passes for reporting in Ohio.

Actually, Niquette didn't even get that right. The holy grail in his story was to determine what is "fair" when it comes to taxes.

After two predictable "man in the street" quotes that took different sides on the issue, Niquette then moves to report on where the "experts" and politicians stand on both sides the issue.

Well, not exactly. Niquette consults with three CPAs, the conservative Tax Foundation, the U.S. Treasury Department, the policy director for Bush-Cheney, and ultra conservative OU professor Richard Vedder. Niquette also throws in a paraphrased comment from the respected economist Mark Zandi of Did Niquette and his editors really think that a Zandi opinion (it isn't even clear if Niquette asked Zandi to comment for this story of just lifted it from his web site) is fair coverage of the other side?

Zandi, by the way (assuming Niquette got it right), pointed out the obvious: cutting taxes for the wealthy doesn't help to boost the economy as much as when the cuts are given to the middle class. Consumers continue to drive the economy - right? Likewise, wealthy individuals (versus corporations - remember, this story is just about individual income tax not business taxes) are few in number and don't directly create many jobs unless they hire more housekeepers, gardeners and CPAs.

In fairness, it should be noted that Niquette sprinkles the story with unsubstantiated assertions about Kerry's position on taxes. Now, I have no idea if Kerry would approve of Niquette's characterizations and priorities or not, but how lazy (or amateurish) do you have to be to not even pick up the phone and ask someone from his campaign to comment?

Further, to get a different opinion on the effects of the tax cuts, Niquette didn't even have to go out of state. Had he simply given Policy Matters Ohio a call (see also post below), he would have found that they have already done quite a bit of research on the subject and can back up their arguments about "fairness" (or lack thereof) with some cold, hard facts about which Ohioans win and which lose under the new tax set up.

Niquette's charts are problematic, too. One contains data from a recent Congressional Budget Office study. When the study was released on Aug. 13, the Dispatch got the headline right: "President's Tax Cuts Help Rich, Study Finds." Remarkably, though, Niquette or his editors labeled the chart "Impact of tax cuts." Buried in the text accompanying the chart is the following comment: ". . . only the middle class is paying a larger share of all federal taxes." Only! That's at least two-fifths of the population. Editors - doesn't that conclusion, by itself, essentially make 90% of this story irrelevant?

The largest chart, at least in the print edition of the paper, purports to show the tax effects if one takes into account both federal income tax cuts and also state income tax increases. The chart presents what seems to show five (typical?) examples of how individuals in different income brackets fair.

Now the first problem with this chart is that it only includes income tax effects. Any researcher, however, would quickly point out that this is problematic, especially for lower incomes, because it excludes the effects of payroll taxes. The CBO study, for example, measure both income tax effects and total tax effects.

Second, the first two examples (incomes of $25,000 and $50,000) really apply to 60% of the population. The other three examples (incomes of $100,000, $500,000 and $1,000,000) are about the wealthies 20%.

Finally, the example of the $100,000 income is bogus. It is based on it being "composed of $93,000 in wages, $2,000 in dividends and $5,000 in capital gains." The Bush administration has used a similar example of how its cuts might affect a "typical" family. But there is a problem. How representative is this really? Although roughly half of the population owns equities either directly or indirectly, the vast majority own them in retirement accounts where access is very limited. So, even though a household may have $93,000 in wages, it is VERY doubtful that it would annually receive $2,000 in dividends and realize $5,000 in capital gains.

Overall, this story ended up being a real stinker. Maybe Niquette just gave up with a Labor Day deadline approaching, but the Dispatch really does readers a disservice when it produces these "on one hand and on the other" types of stories. As the CBO study shows, the bottom line is that the middle class got screwed to the benefit of the wealthiest 20%. Any thing else is a lie and when the Bush-Cheney spiners try to claim otherwise Niquette and the Dispatch's first duty should be to cut through the crap and point out the lie.


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