by Deb Cupples | Some media personalities (e.g., Rush Limbaugh and the folks at Fox) are notorious for inspiring America's two-digit-income earners to staunchly defend the bizarre privilege of a relative few folks to hoard most of our nation's wealth -- much of it questionably "earned" at the expense of hardworking consumers, shareholders and taxpayers.
How do disingenuous media outlets manage to persuade ordinary folks to ardently speak against their own interests? Through the twisting, mangling or outright omitting of facts and context.
Yesterday, Media Matters explained such tactics in detail, using media misinformation about President Obama's plan to cut taxes for lower-earning Americans while slightly raising taxes on those who can best afford to pay taxes:
"When is a tax cut for 98 percent of taxpayers portrayed as a tax increase? When some of the small handful of people whose taxes will go up happen to control the nation's news media.
"Last week, President Obama unveiled a budget outline that extends the Bush tax cuts for all but the top two percent of taxpayers and makes permanent a tax credit of up to $800 for low- and middle-income workers that was included in the recent stimulus package, among other tax cuts.
"On the other hand, individual taxpayers with taxable income above $200,000 ($250,000 for families) per year would pay more in taxes under Obama's plan, under which the tax rates paid on income in the top brackets would revert to their levels under President Clinton in the 1990s -- from 33 and 35 percent to 36 and 39.6 percent. Slate.com's Daniel Gross estimates that for someone with $350,000 in income, this will amount to about $1,500 a year in increased taxes.
"So: Obama's plan cuts taxes for the vast majority of Americans, while raising them for the small number of people who make more than $200,000.
It's not so bizarre that the folks who control media outlets (and don't want their taxes to go up) would try to dupe Ordinary Joe into defending their wealth-hoarding privileges. What's bizarre is that any ordinary Americans fall for it.
Note that it's not just Rush Limbaugh and the media outlets of Rupert Murdoch (e.g., Fox and the Wall Street Journal) that have used misinformation to stir the public's ire and promote their personal wealth-hoarding interests.
Even some so-called "liberal" media outlets have gotten in on the action. Media Matters cites an example:
"Here's how The Washington Post led its front-page article last Friday, the day after the plan was announced:
"'President Obama delivered to Congress yesterday a $3.6 trillion spending plan that would finance vast new investments in health care, energy independence and education by raising taxes on the oil and gas industry, hedge fund managers, multinational corporations and nearly 3 million of the nation's top earners.'
"The article was chock-full of details about the tax hikes, referring to 'nearly $1 trillion in new taxes over the next decade on the nation's highest earners ... $318 billion in new taxes on families in the highest income brackets, who would see new limits on the value of the tax breaks from itemized deductions. ... That proposal is a fraction of the new taxes Obama proposes to heap on the nation's highest earners. ... Hedge fund managers would take an even bigger hit. ... Oil and gas companies would be asked to pay an extra $31 billion over the next 10 years ... Corporations that operate overseas could expect to pay $210 billion more over the next 10 years.'
"By my count, at least 484 of the article's 1,284 words were about the tax increases in Obama's proposal....
"And how did the Post address the tax cuts in Obama's plan? The article devoted just 39 words to them. Among other omissions, the Post completely ignored the fact that the plan makes permanent the Bush tax cuts for the vast majority of Americans.
"And by the following Monday, tax cuts had disappeared entirely from the Post's reporting. Under the headline 'Aides Defend President's Budget; White House and Fiscal Conservatives Set for Showdown,' the Post reported Obama's budget would be 'raising taxes on top income earners and oil and gas companies' and again quoted a Republican criticizing the tax increases. But there wasn't so much as a hint that most Americans would see their tax bills go down.
"The New York Times' coverage of Obama's proposal was little better -- and cable news was often even worse." (Media Matters)
I'm a blogger and have opinions. Thus, I don't hold out my writings as purely objective. But then, no one is paying me for my writings. (Now would be a good time for readers who disagree with me to post snide comments about how undeserving of money my writings are).
My opinions aside, I've come across some context-affecting data that might give other ordinary Americans pause to re-think some of those conclusions that many media seem so eager to feed to us.
For example, IRS data indicates that from 2001-2006, the richest 400 Americans saw their incomes double (to about $263 million a year) and saw their tax rates decline by one-third (to about 17%).
Meanwhile, the median household income for our nation hardly went up, as the table below indicates.
U.S. Median Household Income, 2000-2006
|
2006 |
$48,200 |
..... |
2002 |
$43,318 |
| 2005 | $46,326 |
|
2001 | $42,228 |
|
2004 |
$44,389 |
|
2000 | $43,162 |
| 2003 | $43,318 |
|
|
|
If you made $263.3 million and paid 17.2% in taxes, you'd pay about $45.3 million in taxes -- meaning you'd keep about $218 million. That's about $18.1 million per month to live on, play with, and invest.
Even if you made "only" $5 million a year and paid a full 50% in taxes, you'd still pocket $208,000 per month.
If you made $50,000 a year and paid 17% in taxes, you'd have $41,500 -- or $3,458 a month -- to support your family, play with, and invest.
I have no problem with people's being richer than I am. I just wish that our nation's hyper-wealthy folks would develop a sense of Noblesse Oblige, man up, and stop whining about carrying a bit more of the tax burden.
Speaking of the tax burden, yes -- Mr. Limbaugh et. al. are correct when bellowing that our nation's richest folks pay the biggest share of the taxes.
What people like Mr. Limbaugh often fail to emphasize is the share of income that our high-tax payers take. The table below lists some income distribution statistics, based on IRS data from 2006 (the latest I could find):
Top Taxpayers' Share of Income for 2006
|
Taxpayers |
Share of All Income |
|
Top 1% |
22.06% |
|
Top 5% |
36.66% |
|
Top 10% |
47.32% |
|
Top 25% |
68.16% |
The upshot: a small percentage of Americans take a disproportionately large percentage of Americans' income. It only follows that they should pay a disproportionately large percentage of America's taxes.
I don't contend that none of America's hyper-wealthy folks deserve what they have -- but some of them did seem to essentially rob other people in order to amass their wealth. I'm not suggesting that they all committed crimes (though some of them may have).
I'm talking about the redistribution of shareholder wealth by the folks running some of our nation's largest public companies. As an indicator of that redistribution of shareholder wealth, consider the massive increases in CEOs' pay compared to average workers' pay:
- In 1970, CEOs averaged 25 times more than average workers.
- In 1990, CEOs averaged 90 times more than average workers.
- In 2002, CEOs averaged 143 times more than average workers.
- In 2006, CEOs averaged 364 times more than average workers.
CEOs (and other levels of managers) have essentially made companies less valuable to shareholders by legally helping themselves to bigger and bigger pay packages -- even when the companies weren't doing so well.
Merrill Lynch, Goldman Sachs, and Enron are just three of many examples.
That wealth redistribution will likely affect every one of us ordinary Americans whose retirement depends on stock portfolios.
And it's not just shareholders who've been losing out. Many folks running big private contracting firms have questionably redistributed taxpayer wealth to themselves.
We at Buck Naked Politics have done more than 150 posts on waste, fraud and abuse on the part of government contractors -- posts that you can find in our archived pages (here and here and here and here).
I think I've gone on long enough, don't you.
Related Buck Naked Politics Posts:
* High Cost of Private Contracting
* Save Jobs by Cutting Executive Pay
* Real Bonuses Based on Fake Profits
* Execs Made Millions While Driving Companies into Ditch
* Rich Got Richer and Faced Lower Tax Rates
* Wealth Redistribution: Merrill CEO Spent Shareholders' Millions
* AIG Execs Redistributed Shareholder Wealth to Themselves
* Lehman Execs Redistributed Shareholder Wealth to Themselves
* Cleaning up Political & Corporate Culture Could Help Economy
*
*
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Good post, Deb.
Posted by: Charles | March 07, 2009 at 03:56 PM
Thanks, Charles.
Posted by: Deb | March 07, 2009 at 04:47 PM