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Home Publications Blogs Beat the Press Post Misinforms Yet Again on Budget Negotiations

Post Misinforms Yet Again on Budget Negotiations

Friday, 14 December 2012 05:02

The Post again misled readers in an article on the budget standoff, which it calls the "fiscal cliff" to exaggerate the urgency of reaching a deal before the end of the year. It reported on a possible deal which it said:

"Senior Senate Republicans, meanwhile, were at work on a fallback plan that would not significantly restrain the national debt but would at least avert widespread economic damage by canceling tax increases scheduled to take effect next year for the vast majority of Americans. That strategy calls for Republicans to capitulate to Obama’s demand to let tax rates rise on wage and salary income for the wealthiest 2 percent of taxpayers.

"But the approach would also seek to thwart the Democrats by trying to block other steps that would increase taxes paid by wealthy taxpayers, including higher rates on investment income and limits on the value of itemized deductions."

While the piece does not spell out "other steps that would increase taxes paid by wealthy taxpayers," the list presumably includes the rise in the capital gains tax rate and the ending of the preferential tax treatment of dividend income. Referring to these as "steps" implies that action must be taken for these tax increases to go into effect. This is not true.

If nothing is done, these tax increases will go into effect on January 1, 2013. This distinction is important because the Post's discussion might lead readers to underestimate the strength of President Obama's position. Since the article does not provide much actual information, as opposed to speculation, it should at least be able to convey what measures involve action by Congress as opposed to doing nothing. In this case it is suggesting that President Obama would agree to sign on to a deal that would require he approve a substantially smaller tax increase on the wealthy than is specified in current law. This fact should have been made clear to readers.

The piece then continues:

"This strategy would produce only about $440 billion in new taxes and give the Democrats even less revenue than Republicans had previously put on the table. In his initial offer earlier this month, Boehner had said he could support $800 billion in new tax revenue.

"With a relatively low price in new taxes, the strategy, if successful, would represent a tactical victory for Republicans and shift the political burden onto Democrats to make greater concessions on federal spending."

It would be useful if the piece informed readers how it determined that smaller tax increases on the rich would: "shift the political burden onto Democrats to make greater concessions on federal spending."

Those of us less familiar with the workings of Washington might think that smaller sacrifices by the rich would be accompanied by smaller sacrifices by the non-rich. Somehow the Post has determined the opposite is the case, if there will be political pressure for everyone else to accept big cuts in programs like Social Security and Medicare. It would be great if the Post could explain to readers how this works. It is unlikely that many voters think that because the rich refuse to pay more taxes that ordinary workers should agree to accept cuts in their Social Security and Medicare.


Comments (5)Add Comment
written by Chris, December 14, 2012 6:22
I'd add that the misleading goes even further...the Republicans didn't even put up more revenue on the table when you factor in actual specifics. The $800 billion figure from Boehner that is referenced is totally fictitious, based only on broad outlines and not specific policies with the numbers worked out.

It's actually looking more like they just don't have the ability to produce specifics, according to Greg Sargent's source in the negotiations:

Misled or Misread?
written by Mike Dwyer, December 14, 2012 8:32
While it could have been written clearer, I think the article is not meant so much as a general summary of the negotiation as a report on a potentially sly McConnell maneuver. "OK, middle-classers, we agree about not raising your tax rate, and we're willing to let those rich devils suffer. But what about the tax rates on Grandma's dividends? You don't want THOSE to go up, do you. And what about the capital gains on her Ohio Edison? You don't want those to go up, do you?" It's a typical rhetorical trick--agree to the high-profile demand, make your money winning all the ones nobody's paying attention to. It's not about how strong or weak the president's hand is, it's about Repubublican trickery.
nonsense coming out of the mouths of boehner & mcconnell
written by mel in oregon, December 14, 2012 6:09
the stock market propelling upward won't change the basic problems with american consumers. after all 80% of the market is owned by the top 10% of americans. so say you're an auto worker making $14 an hour under the new labor contract. your takehome would be about $1750 a month. a family can't live on that in detroit. big tax increases on the wealthy, say what they were six decades ago would pretty much solve the deficit, especially if all the $20 trillion+ that american millionaires & billionaires are hiding in the 30 odd principalities to escape the irs were seized & used to shrink the deficit. there are a million ways to solve the deficit without throwing granny under the bus, but we would have to have a united front from the poor & middle class against the wealthy. course the truth is most americans would rather be peasants than fight back.
written by Blissex, December 16, 2012 5:20
«It is unlikely that many voters think that because the rich refuse to pay more taxes that ordinary workers should agree to accept cuts in their Social Security and Medicare.»

Now DeanB has writter against "loser liberalism" but I see that he does not yet understand the depth of the situation.

It is very likely that most VOTERS, or enough voters to swing elections, agree that the wealthy should pay less taxes and for ordinary workers to take cuts in OASDI and Medicare, because:

* Less than 50% of those eligible to vote actually vote, and
it is mostly the wealthier ones.

* Less than 5% of those eligible to vote donate to campaigns,
and it is overwhelmingly the wealthiest.

* Women and especially older women vote more than men do (also
because men die many years earlier), and donate far more
often, and women and older women tend to be property owners,
thanks to divorce and inheritance, more than men.

* Several polls on general attitudes show that 60% of USA
residents think that they will become rich and enter the top
1%, or at least the top 10%, and could not care less about
the parasitical losers that they will leave behind.

The end result is that in the USA (and in other asset stripping countries lik the UK) there is strong electoral pressure for lower wages and higher capital gains, and there has been for 30 years.

That's what most VOTERS want: less income wasted on the unproductive parasites who work or have worked all their lives, and more income going to the deserving strivers who own property.

The American Dream can be summarized as "F*ck YOU! I got mine".
Property owners make up 60-70% of VOTERS
written by Blissex, December 16, 2012 5:27
«after all 80% of the market is owned by the top 10% of americans»

And only the top 50% of Usians vote, so that 10% is a large proportion of voters, and if one looks at house properties, not just stock properties, over 70% of voters have speculated in the housing market.

And while 80% of the market is owned by the top 10%, 60-70% of VOTERS own some small amount of shares, and they want them to go up and up and up delivering effortless tax-free capital gains, even if their stock holdings are small.

Even more importantly, stock and house owners make up 95% of campaign donors, and because of the static map of USA politics that can be far more important than voting.

As Norquist wrote:

«Now if you say we're going to smash the big corporations, 60-plus percent of voters say "That's my retirement you're messing with. I don't appreciate that". And the Democrats have spent 50 years explaining that Republicans will pollute the earth and kill baby seals to get market caps higher. And in 2002, voters said, "We're sorry about the seals and everything but we really got to get the stock market up.»

«most americans would rather be peasants than fight back.»

Many polls show that 60% of USA residents (and probably 90% of VOTERS) think that they will get into the top 1% (or 10% when less optimistic) and consequently they don't care about the losers they will leave behind in the bottomost 99% or 90%.

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About Beat the Press

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.