Monday, March 4, 2013

Associated Press Laments Tragic Plight Of The Very Wealthy

The Associated Press’ Stephen Ohlemacher is out with an article lamenting the tax burden levied on the richest Americans who are “paying some of their biggest federal tax bills in decades even as the rest of the population continues to pay at historically low rates.”

The piece, which seeks to contextualize the political debate surrounding the deficit in economic data, devotes its first eight paragraphs to “the poor rich,” characterizing the current tax structure as a great burden on higher income Americans. It’s not until paragraph 16 that Ohlemacher departs from the article’s opening premise to mention that the income gap between the rich and everyone else has exploded, helping to create the difference in tax rates.

Ohlemacher kicks off his article about the “new analysis” from the Tax Policy Center by lamenting that “families with incomes in the top 20 percent of the nation will pay an average of 27.2 percent of their income in federal taxes,” while “The average family in the bottom 20 percent of households won’t pay any federal taxes” and can claim “more in credits than they owe in taxes.”

A quote from a fellow at the Center, which is described as a nonpartisan “research organization,” succinctly sums up the problem: “My sense is that high-income people feel abused by being targeted always for more taxes,” Roberton Williams tells Ohlemacher. “You can understand why they feel that way.”

To learn if middle class families feel “abused” in the current economy or why high income families pay as much as they do, the reader must skip past seven full paragraphs of political context about President Obama calling on Congress to close a “bunch of tax loopholes that are benefiting the well-off and the well-connected” (an idea that sounds absurd in light of the already unbearable tax burden), Senate Minority Leader Mitch McConnell (R-KY) rejecting that premise, and Democrats proposing a tax on “people making more than $1 million” to replace the sequester.

In paragraph 24, Ohlemacher finally presents a reason for the higher tax rates — though even this is delivered as an opinion from “Liberals and Democrats” and is not accorded the factual tone of Williams’ observation that the rich feel “abused.”

“Liberals and many Democrats say rich families can afford to pay higher taxes because their incomes have grown much more than incomes for middle- and low-income families,” Ohlemacher writes, quoting CBO data showing that “after-tax incomes for the top 1 percent of households more than doubled from 1979 to 2009, increasing by 155 percent,” while “incomes for those in the middle increased by just 32 percent during the same period.”

The author then consults Chuck Marr, director of federal tax policy for the Center on Budget and Policy Priorities, who, he points out is employed by “a liberal think tank.” Marr finally explains that higher taxes on the rich are the result of “three decades in the United States where we had a tremendous increase in inequality” and tells Ohlemacher that this “disparity in income is a big reason why tax bills for the rich are approaching 30-year highs. As the rich get richer, a greater share of their income is taxed at the top rate, he said.”

It’s almost as though the author is upset to learn of this simple explanation, for he immediately follows it up with a quote from a representative from the Heritage Foundation, who predictably argues that “raising taxes again on the wealthy would reduce their incentive to save and invest, hurting long-term economic growth.”

With that, the conventional wisdom is restored and Ohlemacher can tell his readers that raising revenue is a liberal solution that will hurt the rich, while tough spending cuts to entitlements and discretionary programs are necessary to stabilize the national debt.

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