Math Whiz

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Ari Fleischer has an op-ed in today's Wall Street Journal. That's right: It's the perfect storm of dishonesty--the world's most dishonest flack meets the world's most dishonest forum.

How long will I have to read through the op-ed to find a lie? I'm guessing two sentences. Let's see ... . Nope, I was wrong. I didn't have to go any further than the headline ("The Taxpaying Minority"). Wow, Fleischer is arguing that only a minority of workers pay taxes? That's a pretty startling claim.

Well, no, it turns out, he's not. Here's how the op-ed begins:

If the tax forms you're filing this year show Uncle Sam entitled to any income tax, you increasingly stand alone. The income tax system is so bad, and increasingly reliant on a shrinking number of Americans to pay the nation's bills, that 40% of the country's households -- more than 44 million adults -- pay no income taxes at all. Not a penny.

Think of it this way. After dropping off your tax forms at the Post Office, you find 100 people standing on the sidewalk. Forty of them will be excused from paying income taxes thanks to Congress.

A couple things stand out here. First, Fleischer seems to think that the concept of 40 percent is so difficult that his readers won't understand it without a real-life illustration. Gee, Ari, you're throwing around all these fancy numbers, but what does 40 percent really mean? Oh, 40 out of 100. Now I get it.

The next thing I notice is that this claim is very different from the headline of his column. If 40 percent are paying no taxes, then 60 percent are paying taxes, and thus would not, technically, be considered a "minority." Rather than tax Fleischer's brain with fancy mathematical formulas (60 > 40), I'll break it down for him in simple, homey terms. Think of it this way, Ari: After cashing in on a famous career lying for the Bush administration, you haul several large bags of cash to the bank, where you're standing in a line of 100 people. Forty of those people are former Bush staffers cashing their ill-gotten rewards from K Street. Therefore 60 of them are not. Sixty is a larger number than 40. Or, to put it another way, if you suggested that former Bush staffers should get to cut to the front of the line and put it to a vote, you'd lose, unless Katherine Harris was doing the counting.

 

Of course, the central conceit of Fleischer's op-ed--that 40 percent of Americans pay no taxes--isn't true, either. Fleischer very carefully uses the phrase "income taxes," in order to mislead the reader into thinking that there are no other taxes. But he also proceeds from his discussion of "income taxes" into generalized observations about the tax code (i.e., "Our tax system comes up short in a lot of areas.").

But income taxes are just one part of the tax system. For most Americans, the biggest tax is the payroll tax, which is regressive. State taxes in most states are even more regressive. Any computation will show that the bottom 40 percent of taxpayers do pay federal taxes. Here's a link from the Congressional Budget Office (CBO) showing that the lowest-earning fifth pays 4.6 percent of its income in federal taxes, and the next-lowest quintile pays 9.8 percent.

If you add in state and local taxes, you get a more complete picture of the tax burden. As it happens, conservative economist Kevin Hassett of the American Enterprise Institute addressed this topic in yesterday's Washington Post. Hassett found that, in 2003, the average family of four earning $50,000 a year paid 31 percent of its income in taxes. The average family of four earning $150,000 paid 30 percent. (Note to Fleischer: 31 is greater than 30. I can explain this to you in more detail if you'd like.) These figures came from 2003, the last year for which data was available. They don't take into account the 2003 Bush tax cuts, which made the tax code even more regressive.

The rest of Fleischer's op-ed is filled with complaints about the freeloading poor and the overburdened rich, primarily assertions ("the tax code is highly progressive") that, as Hassett (or anybody who has seen the data) can show you, simply aren't true.

Fleischer waxes indignant about how the top 1 percent is paying a higher share of the tax burden than it was 25 years ago. The reason this is true, of course, is that the top 1 percent is earning a far higher share of the national income. Fleischer insists it's because they're paying higher tax rates. He cites a study last year by CBO which, he says, shows that since 1979, the "[The top 1 percent] share of the nation's income has risen, but their tax burden has risen even faster."

I found that study, and it shows just the opposite of what Fleischer says. In 1979, the highest-earning 1 percent of taxpayers paid an effective federal tax rate of 37 percent. In 2004, they paid an effective federal tax rate of 31.1 percent.

I'll give Fleischer the benefit of the doubt here and assume that this isn't an outright lie, but rather he couldn't read the table correctly. Let me explain it this way, Ari: Suppose that a few years ago, 37 percent of your scalp was covered with hair. Today, only 31 percent is. Would you say that your hair has increased or decreased over that time?

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