[gennnniiikk]

CJR: http://www.cjr.org/the_audit/a_62_pe...j.php?page=all

Stephen Moore of The Wall Street Journal editorial board hacks out an instant classic on how to mislead people with numbers.

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The top marginal tax rate is just 35 percent now, of course. So how does Moore come up with the idea that Obama and the Democrats are pitching a 62 percent tax rate for the rich? Disingenuously. First, here’s a classic example of misleading readers with an apples and oranges comparison: If the Democrats’ millionaire surtax were to happen—and were added to other tax increases already enacted last year and other leading tax hike ideas on the table this year—this could leave the U.S. with a combined federal and state top tax rate on earnings of 62%. That’s more than double the highest federal marginal rate of 28% when President Reagan left office in 1989. Welcome back to the 1970s.For Moore’s headline purposes he includes state taxes to get to 62 percent, but when he compare it to rates under Reagan, he doesn’t include state taxes.

The comparison is much more misleading than that, really. Moore is also including things like payroll taxes to come up with his fake 62 percent number, while not including them in that 28 percent Reagan figure. You can’t do that, boss.

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There’s also this: Today’s top federal income tax rate is 35%. Almost all Democrats in Washington want to repeal the Bush tax cuts on those who make more than $250,000 and phase out certain deductions, so the effective income tax rate would rise to about 41.5%. It’s unclear how Moore gets to 41.5 percent here. Repealing the Bush tax cuts would return the top marginal rate to 39.5 percent. Deductions affect effective tax rates, which are far lower than marginal rates. Since he doesn’t explain it, and since the backdrop is the rest of this misleading piece, I’m going to assume that this 41.5 percent number is false (I believe Moore is talking about the PEP and Pease taxes, but those don’t apply to people making more than $525,000, so they can’t be included in a total tax rate that includes a millionaire’s surtax.)

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And again those are marginal tax rates. Unfortunately, most people don’t understand the difference between marginal rates, which is how much tax you pay on the last dollar you earn, and what people actually end up paying. The Carter administration didn’t confiscate 70 percent of rich people’s money in income taxes. The effective federal tax rate for the top 1 percent in 1979 was just 22 percent (including all taxes, particularly corporate income tax, the overall effective federal tax rate for the top 1 percent was 37 percent, well above 2007’s 30 percent rate, which is surely lower today.)

Then there’s this stunner: Despite all of this, the refrain from Treasury Secretary Tim Geithner and most of the Democrats in Congress is our fiscal mess is a result of “tax cuts for the rich.” When? Where? Who? The Tax Foundation recently noted that in 2009 the U.S. collected a higher share of income and payroll taxes (45%) from the richest 10% of tax filers than any other nation, including such socialist welfare states as Sweden (27%), France (28%) and Germany (31%). And this was before the rate hikes that Democrats are now endorsing.Moore’s logic: Since the U.S. collected a higher share of taxes from the richest 10% than other nations then that means we haven’t cut taxes for the rich. I don’t think I need to explain that one.
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The folks on the WSJ edit page are no dummies. They know all this stuff. But spreading disinformation is just fine as long as it serves their larger purpose. And sure enough, the zombie lie is starting to spread.