Lies From The Wall Street Journal

I subscribe to the Wall Street Journal because it often has pretty good, in-depth, news articles and it has good regular features on investing and finance. I'd be a LOT happier, however, if I could get an edition without unrelentingly right-wing editorial page!

Today, the Journal has an op-ed piece by Stephen Moore, identified only as a member of the WSJ's editorial board, with a misleading headline pretending like the Journal is actually attacking Bush's insane tax policies: "How To Soak The Rich (The George Bush Way)." (The piece actually lauds Bush's tax cuts.)

GIVE ME A BREAK!

Moore's piece is a textbook example of how to lie, lie, lie with statistics. I wasn't going to write anything about it, but then I realized that after the WSJ puts this crap out, other right-wing apologistas glom onto it as "fact", passing it along the Fox/Limbaugh circuit as gospel truth.

So what's Moore's thesis? He says that "new IRS data" shows that in the aftermath of the Bush investment tax cuts "the federal income tax burden has substantially shifted onto the backs of the wealthy."

Is that so? Not if you actually analyze the data Moore uses in support of his argument.

First, Moore says that between 2001 and 2004 the percentage of federal income taxes paid by those with $200,000 incomes and above has risen to 46.6% from 40.5%, implying that the richest taxpayers are now bearing a heavier share of the tax burden.

But Moore's numbers are meaningless, and he surely knows it. Since 2001 the absolute number of taxpayers with incomes $200,000 and above has risen substantially--indeed by roughly 20 percent. (In 2001, 12% of taxpayers had incomes of $200,000 or more; by 2004 it was 14.2%.) So it is no surprise that tax receipts from that MUCH BIGGER number of rich folk has also risen--one would hope by at least 20%.

But if you pay careful attention to Moore's cooked statistics, the rise in the share of tax payments from privileged taxpayers with incomes in excess of $200,000 went up LESS THAN the rate at which the group expanded. (From 40.5% to 46.6%, an increase of only 15%). In other words, each individual taxpayer with an income of $200,000 or more is paying LESS of the burden in 2004 than in 2001--the exact opposite of what Moore is disengenuously trying to argue.

The deception continues. Moore points to tax receipts in 2004 and says, (in so many words) "wow, they're a lot higher than in 2002, especially for capital gains." From this, he implies that Bush's tax cuts have boosted tax receipts.

BUSHIT!

Let's see, what was going on in 2002? Oh, yes, we were coming outof a RECESSION. A lot of people lost a lot of money in the stock market in 2000-01, so guess what: they didn't have much in the way of CAPITAL GAINS. If you were like me, you had LOSSES! Funny that Moore would pick 2002 and not another year--say 1999--to make his comparison with 2004. Now that would be interesting--did the IRS take in more in cap gains taxes in 1999--before the supposedly fabulous Bush cuts--than in 2004? I'll give you one guess.

Interestingly, if a Democrat tried out similarly flawed statistical reasoning, the WSJ's editorial writers would be all over it.

Finally, there is this little tidbit from Moore: "[W]e now have the evidence to confirm that the latest round of tax cuts worked--five million new jobs, a 25% increase in business spending, 4% real economic growth in three years and a $4 trillion gain in net wealth."

Hmm. So I guess tax increases would work in the opposite direction. Wow, we must have done really poorly as a nation after Clinton raised taxes in 1992. What's that? No way--you're saying the economy boomed under Clinton, adding 10 million new jobs, erasing the federal deficit, raising millions out of poverty and leading to the longest economic expansion in the nation's history? Wow. I guess that proves tax increases work.

The fact is, Bush's tax cuts overwhelmingly benefitted the rich; there is ample evidence that his lopsided economic policies simply delayed the onset of a larger, more robust economic expansion that would have helped a broader cross-section of the population.

Here's an idea for the WSJ editorial board: try telling the truth, for once.