Politics

Protecting the Wealthy – By Deception

-Submitted by David Drumm (Nal), Guest Blogger

The Wall Street Journal is doing its part. In an article meant to show the futility of taxing the wealthy to close the deficit, the WSJ instead lies with numbers. The WSJ article purports to show that the bulk of taxable income lies with the middle class and without entitlement cuts along the lines of the Paul Ryan model, soaking the middle class is the only option available. They show a graph supposedly depicting that the bulk taxable income lies with the middle class. The graph in question is displayed full size below the fold.

The graph made the usual rounds among the protect-the-wealthy blogs. Surprisingly, it was the pro-business Tax Foundation, in its Tax Policy Blog, that debunked the WSJ graph. Unsurprisingly, the debunking post that embarrassed the WSJ was pulled by the Tax Foundation. But the memory hole isn’t what it used to be, the debunking post can be found here.
Here is a full-size version of the graph in question:

At first glance, the bar graph appears to show that the bulk of taxable income lies right in the middle – with the highest bar corresponding to the $100K-$200K range. But upon closer examination, note the “width of the bars.” The bar just to the left of the highest bar is for the income range of $75K-$100K, one quarter of the range of the highest bar.

The height of the bar depends on the width of the bar. If the width of the bar is lower then the height will also be lower. The appearance of the graph can be made to suit your personal specifications by adjusting the width of the bars.

However, if the width of each bar contains an equal number of tax returns, that is, uses income percentiles rather than specific income levels, you get:

Looks different, doesn’t it? An interesting graph would be one that showed the number of tax returns in the vertical versus a constant bar width of taxable income in the horizontal.

H/T: Brendan Nyhan, Brad DeLong.

10 thoughts on “Protecting the Wealthy – By Deception”

  1. It’s difficult to make a comparison between the charts because of a standard apples to oranges comparison: I would like to see an adjusted chart using the monetary amounts, not percentiles. I’m surprised on one else commented on this. Let’s avoid group-think. That’s how blind partisan-ism happens!

  2. So rafflaw, GE did not get massive tax breaks from their Democrat buddies? Corruption is very bi-partisan.

  3. Great article Nal! It is amazing how easily the Teapublicans can lie to try to fool the public and protect their wealthy base! I have been gone all weekend and I still have connectivity issues so I hope this response goes through.

  4. Republicans often protect the super wealthy from high taxes.

    Democrats often provide tons of loopholes and subsidies to protect the super wealthy from high taxes.

    The super rich (like the Democrat’s best buddy GE) can afford tons of accountants and lawyers that find ways to pay the least taxes as possible. The IRS cannot touch these people because high powered law firms would annihilate them in any court. They can also afford to move very easily to other countries or friendlier jurisdictions.

    The poor have no money for taxes.

    The only people left to milk are the middle class who have money the IRS can claim but don’t have accountants or lawyers to save them.

    Simplest solution would be a one page tax form with a flat rate over a certain income. No way to dodge taxes with fancy footwork and everyone pays their share.

    I’ll pay higher taxes but only if MASSIVE spending cuts are made and I get something for my money.

    The problem here is no-one is willing to compromise and we are stuck with the status quo.

    If both liberals and conservatives have had control of the government for extended periods of time and nothing works, wouldn’t it be time to try something else?

  5. class warfare.. let me see.

    that’s the 1% with most of the “wealth” VS the other 99%

    right ?

  6. Without going into the differences between the Dem’s 2001 tax cut poroposal and the GOP’s (those differences are striking and point out the abject irresonsibility of the GOP), the simplest fact is that the drop in the top rates from 39% to 36% was done during a time of an anticipated 10 year surplus. There is absolutely NO justification for keeping them. Period.

  7. Deception is one of the largest businesses in the U.S.A., and has been so for decade upon decade. -Dredd

    Yes. Emphatically, yes.

    (And while on the topic of deception… Thomas Drake will be interviewed on 60 Minutes tomorrow night — the last hour of a 2-hour special.)

  8. The Great Switch by the Super Rich

    Tuesday, May 17, 2011

    http://robertreich.org/post/5583016733

    “Forty years ago, wealthy Americans financed the U.S. government mainly through their tax payments. Today wealthy Americans finance the government mainly by lending it money. While foreigners own most of our national debt, over 40 percent is owned by Americans – mostly the very wealthy.

    This great switch by the super rich – from paying the government taxes to lending the government money — has gone almost unnoticed. But it’s critical for understanding the budget predicament we’re now in. And for getting out of it.”

    end excerpt

  9. Whats sad is the people getting screwed the worst are the ones putting on their little tri-corner hats, picking up their ungrammatical signs and hitting the streets to fight the hardest to protect the masters of the universe from paying their fair share of taxes.

  10. Deception is one of the largest businesses in the U.S.A., and has been so for decade upon decade.

    Like clothing, deception is taylored to a local market, in terms of minute detail, but it has a broad based facet as well.

    It also has seasonal aspects … bikinis are not for North Dakota just anytime you know.

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