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Home Publications Blogs Beat the Press Douthat Makes It Up On Median Family Income (see note at bottom)

Douthat Makes It Up On Median Family Income (see note at bottom)

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Monday, 18 April 2011 03:57

Ross Douthat struck another blow against fact-based arguments when he told readers that the median family of four has an income of $94,900. Douthat warned that if the Bush tax cuts are allowed to expire in 24 years the median family would be paying a marginal tax rate of 39 percent on their labor income.

If Douthat wanted to base this argument in reality then he would have had to start with a median income for a family of four of $75,700. This is what the Census Bureau reports. Douthat overstated the median income for a family of four by more than 25 percent. But hey, it's for a good cause, he wants to keep taxes low.

Douthat also includes some bizarre racial politics in his analysis. He argues that we will face racial tensions in future years because most of the working population will be non-white whereas most seniors getting Social Security and Medicare will be white. His story is that the non-white working age population will resent paying benefits to white retirees.

This is possible if rich people can direct racial resentments towards retired workers. However the more obvious racial tension would be between the working population and the very wealthy, who are also overwhelmingly white. The  top 1 percent's share of national income has increased by close to 10 percentage points in the last 30 years. This is enough to double the income of the bottom 50 percent.

Given the wealthy's control over the media and its ability to promulgate untrue information, they may be able to direct racial hostility against retirees getting Social Security checks of $1,100 a month and who have access to decent health care. However, the more obvious direction of resentment would be against the wealthy who have rigged the deck to ensure that such a large share of the country's output comes to them.

 

Addendum: As several comments note, Douthat actually was citing a real number for his $94,900 median. This came from the Congressional Budget Office's long-term budget projections. The main reason that CBO shows a higher figure than Census is that the CBO data include employer provided health insurance and employer side payroll taxes as part of workers' income. Together these are likely to add 20 percent or more to wages, especially for married couples with children, since the employer may contribute to benefits for spouses and children. So Douthat presumably came by this number honestly, even if he did not represent it accurately in his column.

Douthat has confirmed this point in a note to his column.

Comments (15)Add Comment
Ross
written by Pat, April 18, 2011 5:48
Good Morning, Dean! And to think The New York Times and the WSJ want me to pay for their columns full of lies.

I received an email from my Congressman, Jim McGovern, who represents my city of Fall River, MA. Fall River has a median income of approximately $25,000 for a family of four and unemployment that has been in the double digits for years.

Mr. McGovern is a progressive, but alas, still out of touch. His email was to inform me that he would be on "Morning Joe" this morning to talk about getting us out of Afghanistan and the budget talks. Unfortunately, I cannot afford the cable charges to have Joe Scarborough in my living room, so I will miss my congressman's appearance. Why would my congressman automatically assume that every household in Fall River could afford or would even want to have MSNBC on their TV remote? Is America that dictated by the TV that I should have nothing better to do than watch Joe Scarborough at 8:15 in the morning?
Jon Kyl Said It First - Before Douthat, Scarborough and Baker
written by izzatzo, April 18, 2011 7:47
The top 1 percent's share of national income has increased by close to 10 percentage points in the last 30 years. This is enough to double the income of the bottom 50 percent.


Tell us something we don't already know Baker. This has been repeated by Ross Douthat and Joe Scarborough so many times in the media it's driven down their ratings either as stale news or a Jon Kyl non-factual lie.
...
written by Sherparick, April 18, 2011 7:51
He also is either to lazy or to intent on spreading disinformation to note that the tax brackets at which the rates applied are adjusted each year for inflation.

http://www.irs.gov/newsroom/article/0,,id=187825,00.html

These people are just evil.
...
written by jw, April 18, 2011 10:58
Th $96K figure seems suspiciously high to me, as well. But the accusation that he made it up is false. The number comes from this CBO report (http://www.cbo.gov/doc.cfm?index=11579), which Douthat links to in the online version of the column.
...
written by rumpole, April 18, 2011 11:20
See note 11: this assumes that all income received by taxpayers is compensation.


That is, to put it mildly, a pretty big assumption that might push the numbers a little higher--e.g., remove the veneer of reality.
Median income in 2010 of $ 94,900
written by AndrewDover, April 18, 2011 11:43
The precise reference for the $94,900 median number for a "Married Couple with Two Children Filing a Joint Return"
is page 65 of
http://www.cbo.gov/ftpdocs/115...0-LTBO.pdf

But the notes reveal why it is higher than you would expect.

It includes
1) employment-based health insurance (14K)
2) employer’s share of payroll taxes. (6.2%)

SO you can see how 75 jumps to 94:
1.062 * (75+14) = 94

Also having two children keep that population away from from very young earners, and the retired population.

Mr Douhat should have explained the statistic better.

Failure, Ignominy
written by JHM, April 18, 2011 1:07
I tried
  • to write a comment on this that would stick closely to the economics of Don Rossito de Doúthat, but failed badly: there is simply not enough ‘there’ there. The gallant little wingnut lad thinks altogether qualitatively -- or call it ‘humanistically’, maybe. To pick on his percentages gets dangerously near cruelty to children.

    Dr. Baker seems to agree. Those three paragraphs about "bizarre racial politics" are definitely off the usual pressbeater beat, are they not?

    I don't think the paragraphs have anything much to do with the NYTC _señorito_'s conscious intentions, but, since I also don't think it matters much what so unrepresentative a whight-winger intends, well, . . . .

    Happy days.

    ___
  • http://j.mp/e41DRO


  • ..., Low-rated comment [Show]
    Our Current Entitlement Structure Is Regressive and Elitist
    written by Matt, April 18, 2011 2:30
    It amazes me to see supposed "progressives" defend our current entitlement structure.

    Those of low education, and income (socio-economic status) tend to live shorter lifespans than the rich and educated. This results in far lower utilization rates for Medicare benefits.

    Medicare actively restricts utilization through denial letters, which the educated and wealthy are simply able to navigate through appeals and lawyers if necessary.

    The less educated and poor simply give up. What a great system!

    So they use far fewer benefits and as a result of shorter lifespan they also collect a lot less in Social Security benefits.

    ...if they had anything like a government managed private savings account they could at least provide an inheritance for the education of grandchildren.

    But alas, "progressives" hail this as the destruction of the middle class.

    I see though it for what it is--bigotry of the worst kind.

    The kind that creates generational poverty, regardless of race.

    It is a simply awful, regressive system.

    ...and "progressives" love it.
    ...
    written by KeithOK, April 18, 2011 3:40
    "So it turns out that this evil man intent on spreading disinformation was actually providing a more holistic and honest representation of compensation than this blogger is used to seeing."

    No, he was providing a false and misleading representation, because income tax brackets are based on income, not total compensation. A family making $94,000 in total compensation would be paying taxes based on income of $75,700, minus deductions, and would not be paying at 39%.
    Dismal Theology
    written by Union Member, April 18, 2011 5:33
    Douthat - the ostensible op-ed Catholic in the NYT - has some nerve dividing Americans between whites, beige and browns during Holy Week, and worse while perniciously discussing issues of economic justice!

    It's hard to see how any of the Pope's Encyclicals on social and economic justice - dating back to 1895 - would support the reasoning and moral teachings of Ross Douthat.

    The Catholic Church itself is becoming increasingly beige and brown in the U.S., including vocations for priests and nuns.

    Regardless, social justice and prosperity - and these are never exclusive of one another - have nothing to do with flesh-tones.




    15% tax rate include 14% FICA -- one percent federal income tax?
    written by grooft, April 18, 2011 11:42
    Since the CBO figures include the employer paid share of FICA Douhat's figures on Federal taxes paid "Today, for instance, a family of four making the median income — $94,900 — pays 15 percent in federal taxes." is Waaaay out of line. Since it pays 15.3 percent of income (calculated thhis way) in Social Security and Medicare taxes

    The employer paid is 7.65% and the employee paid share is the same except in this GOP "tax stimulus year". This is already over the 15% Douhat cites.

    Ridiculous!
    ...
    written by LPY, April 19, 2011 7:56
    The fact that Douthat could make such a mistake -- that the 94.9K number didn't seem suspiciously strange to him -- is yet another indication of how detached he is from the reality of average Americans. This kind of detachment is why Republicans can look at Ryan's huge cuts in social spending and see only line items in a projected budget, not the suffering that they will entail for millions of people of the kind they rarely if ever meet.
    Median still too high
    written by jjcomet, April 19, 2011 8:57
    I question even the $75,700 figure given above. According to the Census Bureau, median income in 2009 was $50,221. I can't believe median income rose by 50% in one year. Where did the $75,700 figure come from?
    75,700 is median for family of 4, not median for all households
    written by harrync, April 21, 2011 4:56
    In his column, Douthat has (either sloppily or by intent) created the impression that the median household income [for all households] in the US is 94,900. (i.e., quit complaining about inequality, see how well the average family is doing!) I think jjcomet is right that the actual number is about 50,000. Douthart of course, is not only counting benefits, etc., but not using the all household number: he is using the family of four number - a number much higher than the all households number. But he phrases it so that you can easily think it is the all household number "a family of four making the median income — $94,900 —".

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    Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

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