Column of the Day: Alan Reynolds Nails the New York ‘Class Envy’ Times, So I Don’t Have To

That’s a relief, and he did a great job of it in his Thursday Townhall column, including a great wrap that looks at who pays ALL federal taxes (link to NYT added by me; link probably requires free registration; bolds are mine):

To have any chance of having his story appear in The New York Times, (reporter Edmund) Andrews had no choice but to dissemble.

….. Measured in constant 2004 dollars, average income of the top 1 percent was $1,413,000 in 2000, but only $1,259,700 in 2004 — a drop of 7.9 percent. Tax cuts did not help a bit. After-tax income of the top 1 percent fell from $946,300 to $887,800 — an even larger 8.3 percent decline.Andrews says, “Economists and tax analysts have long known that the biggest dollar value of Mr. Bush’s tax cuts goes to people at the very top income levels.” You don’t need to be an economist to discern that “the biggest dollar value” of any equiproportionate tax cut must go to those with the “biggest dollar value” of taxes paid. Yet the top 1 percent did not get anything remotely close to a proportionate share of the tax cuts after 2000.

….. The CBO calculates the effective tax rate for all federal taxes — including Social Security and Medicare taxes, income taxes and excise taxes. For the bottom 80 percent as a group, that total federal tax fell from 14.1 percent in 2000 to 11.4 percent in 2004 — a 19.1 percent tax cut. The tax cut was deepest among the poorest fifth (29.7 percent), largely because of the Bush administration’s refundable tax credit for children. For the middle fifth, the total tax rate fell from 16.6 percent to 13.9 percent — a 16.3 percent cut. As for the top 1 percent, their overall tax rate was merely trimmed from 33 percent to 31.1 percent — a 5.8 percent cut.

A truly courageous (willing to be fired) ombudsman of The New York Times would insist on the following correction to Andrews’ upside-down article:

“Households earning more than $266,800 a year saw their federal tax rates drop less sharply than any other group in the country as a result of President Bush’s tax cuts, according to a new Congressional Budget Office study.”

Repeating in bullet list form, plus a helpful note:

• The top 1% got a 5.8% tax cut, and a 1.9% cut in the effective rate they paid.
• The middle quintile got a 16.3% tax cut, and a 2.7% cut in the effective rate they paid.
• The bottom 80% got a 19.1% tax cut, and a 2.7% cut in the effective rate they paid.
• Memo to Edmund Andrews and his layers of fact-checking editors — 19.1% and 16.3% are both more than 5.8%; 2.7% is more than 1.9% (with Times business reporting, you take nothing for granted).

As to the last two paras of the excerpt above, rumor has it that Times ombudsman Bryan Calame is going to be fired anyway for truth-telling like that referred to here last week. So, Bryan, why not go out in a blaze of glory?