Last week in a parting shot across the bow of New York Times columnist Paul Krugman, public editor Daniel Okrent commented on his habit of “shaping, slicing and selectively citing numbers.” You can get more information on that story at QandO, JustOneMinute, and National Review Online.
Krugman-style “shaping, slicing and selectively citing numbers” isn’t just reserved for the op-ed page as the current installment of a 10-part series in the Times, Class Matters, Richest Are Leaving Even the Rich Far Behind, demonstrates. Just a little ways into the report this paragraph pops up.
- “The Bush administration tax cuts stand to widen the gap between the hyper-rich and the rest of America. The merely rich, making hundreds of thousands of dollars a year, will shoulder a disproportionate share of the tax burden.“
Times reporter David Cay Johnson makes the Krugman-esqe leap into into the concept of socialized wealth by suggesting tax cuts are responsible for income disparities. Income is responsible for income disparities. Some people make more than others, and even at the individual level incomes varies substantially from year to year. Tiger Woods didn’t join the top 400 taxpayers by Bush’s tax cut nor will the cuts in future years be responsible for the gap between his earnings and a corporate attorney earning $250,000 a year.
The story is riddled with spun statistics and ominously worded assertions which gloss over the data. Even when they try big picture stats they fail to give context. For example, Johnson reports that 53% of the cuts in coming years will go to the top 10% of taxpayers (which begins at the hardly fabulously rich income of $117,000/yr) while failing note that from the associated charts that group makes 45% of the nations income.
To close out the article Johnson tosses in a line he’s smart enough to offer no citations for.
- “But in fact, economic mobility – moving from one income group to another over a lifetime – has actually stopped rising in the United States, researchers say. Some recent studies suggest it has even declined over the last generation.“
“Some studies?” Which studies would those be?
Last September I took the Washington Post to task for stretching seriously to try to find a negative spin for the documented growth in those making $75K or more per year (inflation adjusted). The graph alone shows that income mobility is doing anything but declinining…
Update: I meant to add this graphic from the associated charts.
The good news is that the system is only mildly progressive (in aggregate) while the top earning citizens are paying their share. If you look at the chart (and ignore the top 400 taxpayer column) you see that even in those making $10M or more a year they are still paying their share (or more). Those in the 0.1% of incomes who earn 8% of the nations income pay 10.8% of the nations taxes. True this is at the low end of what others in the top 10% are paying, but much of that difference is explained by the Alternative Minimum Tax (AMT), the income ceiling for Social Security taxes, and the likelihood that the taxpayer has retained professional accounting, legal, and tax planners working to legally minimize their exposure. The data show that those who can afford top-tier tax representation can lower their taxes aren’t exactly gaming the system – their tax burden is only 2% to 5% lower.
Update 2:: The author of the piece, David Cay Johnston, notes links to material supporting his last claim, so I was wrong in saying he didn’t offer support for the claim. Of course I’m also gratified to see him entering the discussion, as I do believe that any article or series based on statistic is hard to pull off and open to criticism from all sides.
That said, I’m hardly bowled over by the statistics the Times cites for income mobility. The mobility trends study shows a 5% increase (between 1970 through 1990) in the number of families that do not move quintiles over 20 year period. In light of the Washington Post graphic it would be easy to argue that the heralded “economic mobility” statistic not rising could be a good thing. If people move to and stay in a higher quintile (as some of the evidence suggests) that would put them in that 5% increase in “immobility”. Trying to spin that as a negative is a tough sell, especially when the study numbers don’t indicate the direction of mobility. Just look at the graphic from the Washington Post data to see that the march in quintiles over the period is upward.