On the day after nationwide Tea Party protests, the Washington Post carried this headline in a text box at the top of Page One: "Tax Burden Near Historic Low: The average family sent about 9 percent of its income to the IRS, with the middle-class faring especially well, according to federal data. A12." (The D.C. tea party was noted at the bottom of the page, and readers were sent to B-1, the front of Metro.) But how do the Post’s "tax burden" claims stand up?
Inside the paper, there’s a chart, and the source is the "nonpartisan" Congressional Budget Office, now controlled by the Democratic majority. It measured only the "Effective individual income tax rate." The Post is measuring less than half the federal "tax burden"! Here’s what the CBO director’s blog on the study reported:
The overall effective federal tax rate (the ratio of federal taxes to household income) was 20.7 percent in 2006. Individual income taxes, the largest component, were 9.1 percent of household income. Payroll taxes were the next largest source, with an effective tax rate of 7.5 percent. Corporate income taxes and excise taxes were smaller, with effective tax rates of 3.4 percent and 0.7 percent.
This study only goes back to 1979. The Post has a funny way of defining "historic" when it comes to the tax burden. There wasn’t a federal income tax until 1916. Lori Montgomery’s story (headlined "Americans’ Tax Burden Near Historic Low") began:
The nonpartisan Congressional Budget Office estimates that the average family forked over barely 9 percent of its earnings to the IRS in 2006, the most recent year for which information is available. The effective tax rate hit its all-time low in 2003 and has since crept up only slightly.
Even the graph title is inaccurate: "Uncle Sam’s Share: The federal tax burden for most income groups, particularly middle-income households, is near its lowest level in decades, according to the most recent available federal data." The chart doesn’t really measure the whole "federal tax burden," but readers would certainly think it does.
Only in the 16th paragraph, after touting how about a third of all filers paid no income tax in 2006, did Montgomery briefly acknowledge the other half of the federal tax burden:
Of course, even filers who have no income tax liability still pay federal taxes, due in large part to the payroll tax, which funds federal insurance programs like Social Security. According to the CBO, taxpayers shelled out an average of 7.5 percent of their earnings in payroll taxes in 2006.
But if the recession lingers and Congress and the White House consider another economic stimulus package, that tax could temporarily disappear, as well. Economists say one of the first items that should be considered is a payroll-tax holiday.
Montgomery also tried to insist the "tea parties" were out of line with public opinion. Let's pick up at the fourth paragraph:
With federal income taxes so low for so many families, a majority of those surveyed by Gallup last week said the amount of federal income taxes they pay is either "too low" or "about right," compared with 46 percent who said their tax bills are "too high" -- one of the most positive assessments of the federal tax burden since Gallup began asking the question in 1956.
Gallup analysts said the poll results may also reflect confidence in Obama's pledge not to raise taxes on families making less than $250,000 a year, a vow he repeated yesterday in a tax-day speech at the Old Executive Office Building.
The Post did not note the irony that suddenly, with the Democrats in power, Americans are more satisfied with their tax burden: the same question drew different numbers in George W. Bush’s last two years. While 46 percent said their tax bills were too high and 48 percent said they were about right in 2009, in 2008 the gap was 52 percent too high/42 percent about right, and in 2007 it was 53-41. Perhaps the sense of an economic crisis has also affected public opinion about making sacrifices, not just confidence in Barack Obama’s pledges.
[Montgomery image from the NewsHour]