MediaWatch: February 1992
Table of Contents:
There They Go Again
The Philadelphia Inquirer hasn't learned anything. Far from being embarrassed by its shameless manipulation of emotions through misleading generalities in last fall's "America: What Went Wrong" series, the Inquirer did it again. On February 2 the same two reporters, Donald Barlett and James Steele, wrote a front page story on the unfairness of a capital gains tax cut.
Again, the duo made no attempt at balance. They charged that a cut "would continue the legislative practices of the last two decades that have tilted the economic rules in favor of the few at the expense of the many" and would "encourage another round of corporate takeovers, such as the ones in the 1980s that led to the closing of plants and the elimination of jobs."
Building on the class envy theme, the reporters argued that "if you were one of the 2.6 million individuals and families living in New Jersey who earned less than $50,000 a year, it would have taken every dollar that all of you paid in federal taxes to offset the tax cut planned for people with incomes of more than $1 million." Really? In a 1990 study cited by the late Warren Brookes, economist Allen Sinai, no friend of Reaganomics, predicted a rate drop from 28 to 15 percent would create "a substantial tax revenue increase of $30 billion to $40 billion over five years."
The duo also claimed that "an Inquirer analysis of the 70-year history of the capital gains preference shows no evidence linking the tax to the creation of jobs." Well, Sinai pointed out that "from 1982 to 1986 following the reduction of the capital gains rate to 20 percent in 1981...new business formations rose 5.7 percent." After the '86 hike to 28 percent, they fell by 3 percent.