July 31, 2010

CNBC’s ‘Clarification’ of Bush Tax Cuts Still Ignores Their Across-the-Board Nature

CNBClogoIt would appear that someone at CNBC listened to the Mark Levin Show on Thursday. Either that, or someone at the network paid attention to his or her e-mail alerts and read my post that went up in the wee hours Friday morning (at NewsBusters; at BizzyBlog). Likely in response to our criticisms, CNBC has revised and “clarified” a report by CNBC staff writer Jeffrey Cox.

The network’s revised and “clarified” report still fails to sufficiently inform readers. In fact, the new version seems to be the result of a meeting where the topic of discussion was: “What are the least informative changes we can make while being technically correct?”

On his show Thursday night, Levin referred to Cox’s probably original version (now Google cached; copy saved here at my web host for future reference) addressing Deutsche Bank analysts’ fears that the expiration of the Bush tax cuts at the end of the year will have a sharply negative economic impact. (For what it’s worth, I prefer to describe what’s coming as a plain-and-simple tax increase, simply because after what will have been eight years — 2003 through 2010 — everyone has long since gotten used to the current income tax structure.)

Here are the first two paragraphs of Cox’s report as found by Levin and yours truly (bold is mine):

The nascent US economic recovery would be halted in 2011 if Congress fails to extend the Bush tax cuts for the wealthiest Americans, analysts at Deutsche Bank said.

The cuts were enacted in 2001 and 2003 under President George W. Bush and covered those earning more than $250,000, but they are set to expire at the end of this year.

Levin in passing, and yours truly with detailed support, pointed out that Bush’s tax cuts were across the board in nature and have affected well over 100 million taxpayers each and every year since their passage. Cox could easily have learned that in five minutes or less of Googling or going through Internet news archives.

Going a bit further with my point than I did in my original post — Those “tax cuts” in some instances turned into de facto tax handouts for some lower- and middle-income filers. The 2003 law allows certain tax credits (e.g., the child tax credit) to be taken even if they amount to more than the amount of tax otherwise due. In the otherworldly language of Congress and the IRS, such credits are characterized as “refundable.”

Here are the first two paragraphs as they now appear at CNBC, followed by the “clarification” that is now at the end of the article (HT to NewBusters commenter “charlestonjames” for catching this; bold is mine):

The nascent US economic recovery would be halted in 2011 if Congress fails to extend the Bush tax cuts for the wealthiest Americans, analysts at Deutsche Bank said.

The cuts were enacted in 2001 and 2003 under President George W. Bush and in part covered those earning more than $250,000, but they are set to expire at the end of this year. Tax decreases for lower-earning people likely will be continued, but the ones for the top end of the income scale are in danger of going away.

Clarification: An earlier version of this story failed to state that the Bush tax cuts covered more than just those earning more than $250,000.

The response by “charlestonjames” to CNBC’s pathetic effort is spot-on: “Of course, they still refuse to acknowledge these were across-the-board tax cuts.”

Really. Readers not familiar with the history might reasonably but erroneously infer that the revision’s references to “in part” and “lower-earning,” along with the clarification’s “more than just those earning more than $250,000,” mean that the Bush cuts only helped people making a bit less than $250,000.

It would have been so much easier from the start for Cox to merely write that “Across-the-board cuts were enacted in 2001 and 2003 under President George W. Bush, but they are set to expire at the end of this year.”

Crucially, it would also have been accurate based on the facts on the ground at the moment. Despite the confident assertion in CNBC’s revision, there is absolutely no assurance that “Tax decreases for lower-earning people likely will be continued.” C’mon, guys. Obama, Pelosi and Reid have had over 18 months to do this, and haven’t. Further, they have deliberately decided not to pass a budget and to keep the tax structure (and of course spending) on autopilot when the fiscal year 2011 begins on October 1. It’s more than a little likely that they’re not even going to bring up any other tax matters (or, of course, spending control) before the November elections.

Finally, there’s an error I didn’t bring up in my early Friday post that is in the first paragraph of both the original and revised versions.

It is simply not true that ending the Bush tax cuts for those earning over $250,000 will only affect “the wealthiest Americans.” Doing so will instead extract more money from people who happen to be the “highest-earning Americans” starting next year, regardless of whether they have previously accumulated a great deal of wealth or are saddled with a mountain of debt to the point of having a negative net worth.

I can’t believe I have to explain this to the people who work for what is supposed to be the nation’s leading business channel. If Fox’s competitive effort overtakes them, sloppiness such as what is described here, and which has telltale signs of being deliberate, will go a long way towards explaining why.

Cross-posted at NewsBusters.org.

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4 Comments

  1. One wonders if these business reporters have ever seen a 1040 form let alone worked their way through one. Maybe they use the Geithner-Turbotax approach. Just throw some numbers in the top & their taxes fall out the bottom like magic.

    Comment by LilyS — July 31, 2010 @ 1:45 am

  2. [...] This post was mentioned on Twitter by mikepfs and Tom_Blumer, X Marx. X Marx said: RT @mikepfs: BizzyBlog – CNBC’s ‘Clarification’ of Bush Tax Cuts Still Ignores Their Across-the-Board Nature http://is.gd/dUhg0 [...]

    Pingback by Tweets that mention BizzyBlog -- Topsy.com — July 31, 2010 @ 1:59 am

  3. And still the enormous error of omission by the MSM that the Bush Tax Cuts brought in $1 trillion a year EXTRA revenue due to spurring economic activity.

    The liberals always whine and wring their hands they didn’t redistribute (misappropriate and misspend) more money.

    Comment by dscott — July 31, 2010 @ 9:55 am

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