Friday, April 29, 2005

Illiterate and illiberal

The very rich are earning a larger and larger share of our national income. Therefore, fairness dictates that we must cut their taxes.

That's what the Wall Street Journal seems to say in an editorial this week, noting that any move to raise taxes on the rich would be deeply unfair because they "already bear an outsized share of the American tax burden." Or perhaps they're completely inept at math? You decide.

Jonathan Chait provided the quote above along with some helpful analysis:

In fact, the tax rate borne by the very rich has plummeted. In 1979, the top 0.1% paid, on average, 32% of their income in taxes. Today, they pay less than 23%. So what's happening is that the top 0.1% are paying a higher share of the tax burden because their share of the national income is rising faster than their tax rates are falling. The Journal editorial board sees this state of affairs as class warfare against the rich.

At this point, you may be wondering whether it's really possible that professional editorial writers at a first-rate newspaper — people who, after all, are paid to think seriously about issues like this — could make such a simple statistical mistake. Are they really so dishonest or so dumb as to think that you can measure the fairness of a tax code by looking at what share of the taxes various groups pay without considering how much they earn? I can tell you, as a regular reader of that page, that the answer is: Yes, they really, really are.

Indeed, of the many statistical butcherings the Journal employs to defend its various misguided beliefs, this particular device ranks among its favorites. It hauls out some form of this argument — the rich are being mistreated because they're paying a rising share of the tax burden — at least once a year.

Which means that if you get your news from the Journal, Fox News, and Rush Limbaugh, you can be economically illiterate, politically illiterate, and morally illiterate all at once.

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