Facts Exempt: Network News and Taxes
Table of Contents:
- Facts Exempt: Network News and Taxes
- 1. Tax cuts mainly help the wealthy
- Tax relief should not be only for taxpayers.
- 3. An increase in the complexity of an already mammoth tax code is not newsworthy.
- 4. The complexity of the tax code has nothing to do with Internal Revenue Service (IRS) abuses.
- 5. When Congress cuts taxes or investigates the IRS, it is inspired to do so by crass political calculations.
- 6. There were many facts about taxes in the U.S. that many viewers would have found interesting, but nonetheless were left unmentioned. For instance:
6. There were many facts about taxes in the U.S. that many viewers would have found interesting, but nonetheless were left unmentioned. For instance:
• Taxes are consuming an increasing share of family budgets. According to the Tax Foundation (www.taxfoundation.org), a median-income, two-earner family pays roughly 38 percent of its income in taxes to their federal, state, and local governments. This is up from 37.3 percent in 1996, and 27.8 percent in 1957. Not coincidentally, this typical family’s saving rate has declined from 6.2 percent to 3.6 percent over the past 30 years. Payroll taxes have become especially onerous, climbing from "about 1.5 percent for the median two-earner income in the mid-1950s to about 7.3 percent this year." The foundation notes that "taxes now claim a greater share of the median two-income family’s budget (37.6 percent) than food (9 percent), clothing (3.8 percent), housing (15.7 percent), and transportation (6.7 percent) — combined."
• The increasing tax burden is contributing to the stagnation of workers’ wages. Dean Stansel, a fiscal policy analyst at the Cato Institute (www.cato.org), argues that one of the primary reasons workers’ wages are not growing faster is that "taxes and government mandates on employers have been expanding steadily, crowding out the amount workers can put in their pockets and spend as they choose."
Ironically, the total amount employers are paying for their employees has been rising, Stansel notes, but this increase is eaten up in the employer share of the payroll tax, unemployment insurance taxes, worker’s compensation, and "the skyrocketing costs of complying with government regulations and our hopelessly complex tax code." These taxes are hidden from workers because no mention of them appears on pay stubs…or in network newscasts.
• The wealthiest Americans pay the most in income taxes. "Americans at the upper end of the income scale continue to bear an increasingly large share of the total federal individual income tax burden," says Tax Foundation economist Patrick Fleenor. Using Internal Revenue Service data, Fleenor found that in 1995, the latest year for which such data are available, the top one percent of income earners paid 30.2 percent of the total individual income tax burden, while earning 14.6 percent of all income. The top 10 percent of income earners paid 60.5 percent of all federal individual income taxes, while making 40.2 percent of all income.
The bottom 50 percent of income earners, on the other hand, earned 14.5 percent of all income but paid only 4.6 percent of all federal individual income taxes. Moreover, Dan Mitchell of the Heritage Foundation notes that in the 1920s, 1960s, and again in the 1980s, the wealthiest taxpayers shouldered more of the tax burden as their tax rates fell. The reason, Mitchell argues, is that "incentives to hide, shelter, and underreport income are reduced" as tax rates are lowered.
One reason these important facts never made it into network news reports is that economists favoring tax cuts were virtually locked out of tax stories. Until network reporters become more persistent in getting both sides of the story, and in interviewing experts from both sides, viewers will remain uninformed about the issues surrounding the debate in Washington over taxes.
Sources for REPORTERS to Call for Tax Stories:
Bruce Bartlett – National Center for Policy Analysis (202) 628-6671
Patrick Fleenor or J.D. Foster – Tax Foundation (202) 783-2760
Dan Mitchell – Heritage Foundation (202) 546-4400
Stephen Moore or Dean Stansel – Cato Institute (202) 842-0200
Alan Reynolds – Hudson Institute (317) 545-1000
Murray Weidenbaum – Ctr. for the Study of American Business (314) 935-5676