Anti-Health Care Reform Infographic, Linked On Drudge, Makes Elementary Errors
A Thursday New York Post piece made a number of startling claims about Democratic health care reform proposals, which, the authors claim, will devastate the wealthy. Take a look at the associated chart, which was fronted on Drudge.
Notice a problem? Take the single gentleman on the top left, who earns $285,000. House Democrats would charge a surtax of one percent on every dollar he makes over $280,000. That means one percent of $5,000 or $50. But according to the Post he'll be on the line for one percent of his entire salary--an extra $2,850. Can you say "marginal taxation?" Apparently they can't at the post.
A Democratic aide sends over the following corrective:
One should note that a major source for the post article was the Tax Foundation, which releases an annual anti-tax "report" that the non-partisan Center for Budget and Policy Priorities blasts year in and year out for its numerous inaccuracies. Looks like they did no better on this project.
Josh
Matt
Eric
Brian
The Republicans have always had a problem with marginal tax rates. Witness the Joe the Plumber episode during the campaign. Joe and a lot of others were convinced Obama was going to tax everything he earned over $250,000 at a rate of 39% (if I recall the rate correctly). And Newt's problems of late trying to figure out what Obama's health care will cost. Maybe their anti-intellectualism is coming back to bite them? More like selective use of data.
July 17, 2009 11:24 AM | Reply | Permalink
Jeez, I can't even state their misunderstanding correctly, it's so foreign to me. I should have said they thought he was going to tax his entire salary at 39%, not just the part over $250K. This is, of course, the correct formulation, namely, an application of a marginal rate. Sorry for the confusion.
July 17, 2009 11:27 AM | Reply | Permalink
These are not misunderstandings or inaccuracies. These are lies, falsehoods, deliberate misrepresentations of the truth. Is that clear?
July 17, 2009 11:40 AM | Reply | Permalink
And how out of touch that the graphic contains four scenarios, and all of them are well above median household income ($64,217 in Manhattan, according to 2000 census, see http://en.wikipedia.org/wiki/Demographics_of_New_York_City#Income). Only one of the scenarios is for someone making below mean income ($121,549 in Manhattan).
Gee, Wall-streeters and millionaires will have to pay higher taxes to pay for universal healthcare? Who knew? I thought it was going to be paid for with unicorns and pixie dust, like the GOP wants to do!
July 17, 2009 11:43 AM | Reply | Permalink
It's bad that every working American pays income tax and not one in a hundred understands how marginal rates work. It's worse that there are assholes who understand marginal rates perfectly well but are more than happy to perpetuate and exploit the ignorance.
July 17, 2009 12:59 PM | Reply | Permalink
Um...on what planet does someone working at a GROCERY STORE make 50k a year??
July 17, 2009 2:03 PM | Reply | Permalink
California?
July 17, 2009 4:17 PM | Reply | Permalink
Confusion about marginal taxation is not confined to the healthcare figures in this advertisement. I can't speak to the New York figures, but those federal income tax figures are off too. Ignoring Wall Street Man and the Yuppie Couple (whose deductions may be phased out and who may be nabbed by the AMT; I won't bother), the $80,000-a-year worker is not paying $16,187 in federal income tax. The Post, or the Tax Foundation, got this figure by simply multiplying her AGI by the tax rate without accounting for exemptions or even the standard deduction. (If we are to assume that $80,000 is her taxable income, that's fine, but then it's a lie to say at the bottom that 35.48% of her income is going to taxes -- her gross income would be closer to $90,000.) If gross is $80,000, then after exemption and the standard deduction, her federal income taxes are at most $14,262 (much less if she pays mortgage interest and itemizes). Also, notice how they used the 2.9% self-employment Medicare tax rates throughout, instead of the 1.45% that's actually withheld (result the "worker" really only pays $1,160 in Medicare taxes). Is there a single correct number in this entire ad?
July 18, 2009 2:14 AM | Reply | Permalink