What’s going on here?
The RSC document compares and contrasts President Biden’s fiscal 2022 budget with the budget drafted by the committee itself. The RSC started almost 50 years ago as a conservative outpost in the House but has since evolved into a very influential caucus, with nearly three-quarters of House Republicans listed as members.
The document notes that the Biden budget would not balance over time, but claims that the RSC budget would balance in five years even while cutting taxes by almost $2 trillion over 10 years.
How does the RSC do that? It proposes to slash federal spending on just about everything but defense, including eliminating well-known programs and consolidating health-care programs such as Medicaid and the Affordable Care Act into block grants for states. The budget would also fold three parts of Medicare into a single “Fed plan,” with premium subsidies determined by income and the age of eligibility increased from 65 to 67.
Sprinkled throughout the RSC document are references to the numbers being “per house,” i.e. per household. So $8 trillion in spending is listed as “$63,700 per house.”
For taxes, the document says that Biden’s budget “hikes taxes by $3.6 trillion over 10 yrs., $28,800 per house,” while the RSC budget “cuts $1.94 trillion taxes, $15,500 per household.” The document also claims that Biden’s budget “hikes taxes on every income group.”
It’s pretty simple-minded math. The RSC took the nation’s 120 million households and divided all of these numbers by that figure. That results in an “average” that is basically meaningless and easily misunderstood.
“The purpose of us including the figure isn’t to show how much each household will actually see in tax increases. It’s simply a way to help communicate the scale of the taxation,” said Mitchell Hailstone, an RSC spokesman. “It wasn’t meant to mislead.”
Yet somehow, that factoid ended up in Williams’s newsletter in a misleading way. Our reader certainly thought Williams wrote that Biden would increase her taxes by $28,000. Williams linked to a copy of the RSC document, but even then it’s not very clear.
For the record, Biden’s tax plan basically skips about 99 percent of the nation’s households, as he aims his proposed tax increases at corporations and the wealthiest taxpayers. A few days after Williams sent his missive, the nonpartisan Tax Policy Center released estimates on how it would affect Americans.
“Nearly all of President Biden’s proposed tax increases would be borne by the highest income 1 percent of households — those making about $800,000 or more,” wrote Howard Gleckman of the TPC. “At the same time, Biden would cut taxes for many low- and moderate-income households and reduce them substantially for those with children.”
That’s the problem with simple averages, especially when the tax code is so complex.
Hailstone argued that “these tax increases will be felt by American workers and households in many ways,” and he justified the line about hiking taxes on every income group because Biden lets President Donald Trump’s tax cuts expire as planned at the end of 2025.
We should note that was a choice Republicans made when they crafted the tax cut in 2017 because it allowed them to make the cut bigger as they passed it with no Democratic votes under a budget process known as reconciliation. Biden is no fan of the Trump tax cut, but presumably whoever is president in 2025 will have to figure out how to deal with that ticking time bomb of tax increases.
In fact, a big chunk of the tax cuts touted in the RSC budget are simply an extension of the Trump tax cuts.
The TPC analysis acknowledges that when the impact of Biden’s corporate tax increases is distributed, both to shareholders and workers, most households would pay more, with three-quarters of middle-income households facing a tax increase of $300. The TPC model, like others, assumes that corporations adjust to a higher tax by reducing investment returns or cutting workers’ wages. But this is mostly a theoretical exercise; these numbers do not reflect what taxpayers would notice when they fill out tax forms.
We asked Halee Dobbins, a spokesperson for Williams, why the lawmaker sent a misleading email to his constituents. We did not get an answer to that question but received a dismissive reply: “It’s no surprise that the ‘fact-checkers’ at Jeff Bezos’ Washington Post are quick to defend President Biden’s proposed tax increases. It’s a fact the President Biden wants to reverse the Trump tax cuts for all tax paying Americans, and it is also a fact that raising taxes on Americans, particularly on the back end of covid-19 would be disastrous policy.”
The Pinocchio Test
We will take the RSC’s word that it did not intend to mislead with its simplistic framing of Biden’s tax increase, given that the organization also divided other figures by household. But it is a strange and confusing way to talk about taxes, as signified by the Williams email. Williams clearly misunderstood what it meant — and then misinformed his constituents. He apparently also has little remorse about doing so.
Williams earns Three Pinocchios.
Three Pinocchios
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"that" - Google News
June 15, 2021 at 02:00PM
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The misleading claim that Biden would raise taxes $28,000 per household - The Washington Post
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