-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.