Feb
16
2001

U.S. News Offers White House Spin on Taxes

U.S. News & World Report's February 19 cover story on the Bush administration tax-cut plan featured the usual presidential-honeymoon puffery, marveling at Bush's "derring-do" in facing down critics who "didn't fully appreciate" how deeply he believed in his tax-cutting agenda.

When the piece finally ventured into the tax plan's specifics, it fell straight into the White House's spin. The key aspect of the Bush proposal is that it targets only federal income and estate taxes-- levies paid mostly by the rich. It makes no cuts in federal payroll taxes, like those for Social Security and Medicare, which fall most heavily on poor and working-class households. Accordingly, when administration officials defend the plan, they're careful to cite figures showing only its effect on income taxes, ignoring the payroll tax, which is paid by a larger number of households.

U.S. News docilely went along with that deceptive spin. The often-heard criticism that the Bush plan gives too much to the rich was countered by U.S. News this way: "Because the wealthy pay the most taxes-- the top 20 percent of the country's income earners pay 80 percent of all income taxes-- any across-the-board reduction would put the most money in their pockets. But many in lower lower-income brackets would get a higher percentage reduction."

Just like the White House, U.S. News misleadingly focuses only on the income tax. When all federal taxes are counted, the Bush plan would give the wealthiest 1 percent of households 36 percent of the cuts, even though they only pay 20 percent of federal taxes (Center on Budget & Policy Priorities, 2/6/01).

And despite the claim that low-income households would get a larger percentage cut, the poorest fifth of households, who have an average income of $8,600, would see their federal tax burden fall the least, by 5.5 percent, while the richest 1 percent-- making an average of $915,000-- would see their tax burden fall the most, 11.6 percent (Center on Budget & Policy Priorities, 2/6/01; Citizens for Tax Justice, 2/8/01).

The article asserts that "Americans are divided" about the Bush tax cut, citing a poll that shows 46 percent of Americans favoring "an income-tax cut for all taxpayers" versus 44 percent preferring a targeted cut. But the piece fails to mention that Bush's plan would *not* cut taxes for everyone-- almost a third of families would see no reduction, with 80 percent of them having at least one worker (Center on Budget & Policy Priorities, 2/7/01).

U.S. News includes a chart that illustrates the potential impact of the Bush tax plan on households at various income levels. But the magazine's hypothetical families are markedly skewed toward the rich. Only two of the 10 households fall below the median income (a single person and a married couple, both making $25,000 a year). The other eight households are above the median; and six of the 10 households are in the top 20 percent of incomes.

Like most media analyses, U.S. News ignores the fact that each dollar spent on the tax cut is one less dollar available for federal programs. Middle-income households who stand to gain a few hundred dollars a year from the tax cut also stand to lose potentially thousands of dollars worth of services because of the cuts for wealthier households.

Citizens for Tax Justice calculated (2/15/01) that the revenue lost from the plan's proposed tax cuts for households in the richest 1 percent totals $774 billion over 10 years-- more money than the $738 billion it would take to add a fully funded Medicare prescription-drug benefit, an idea so popular it was favored by both the Gore and Bush campaign last year.

"The fate of the package," U.S. News writes, "may well depend on whether everyday Americans conclude there is enough there to make a real difference in their lives, no matter how much the rich stand to gain." But to make up their minds about the tax cut, everyday Americans need meaningful information about the plan. U.S. News' February 19 cover article did little to supply it.

ACTION: Please ask U.S. News & World Report to take a broader look at the effects of the Bush tax plan-- examining the impact of the tax cuts on all income levels, by looking at all federal taxes and at potential losses in public services.

CONTACT:

U.S. News & World Report

Letters to the editor

letters@usnews.com

Michael Tackett, Assistant Managing Editor

mtackett@usnews.com