I've seen a lot of dumb news reports in my life, but I'm not sure anything can quite match this one from ABC News. The premise of the report is this: Barack Obama plans to raise taxes on people who make more than $250,000, so the reporter has gone and found people who earn a little more than that sum who plan to decrease their income so that they come in underneath the magic line.
Now, the obvious objection here is that the tax code doesn't work that way. A tax increase affects the marginal dollar that a person gains. That's means only every dollar over $250,000 is taxed at a higher rate. Obama is not proposing a tax system whereby somebody who goes from $249,999 to $250,000 suddenly becomes poorer. Nobody has ever enacted a tax hike like that in the history of the United States.
That doesn't stop ABC News' intrepid reporter. This story has to be read to be believed:
President Barack Obama's tax proposal – which promises to increase taxes for those families with incomes of $250,000 or more -- has some Americans brainstorming ways to decrease their pay, even if it's just by a dollar.
A 63-year-old attorney based in Lafayette, La., who asked not to be named, told ABCNews.com that she plans to cut back on her business to get her annual income under the quarter million mark should the Obama tax plan be passed by Congress and become law. ...
"We are going to try to figure out how to make our income $249,999.00," she said.
"We have to find a way out where we can make just what we need to just under the line so we can benefit from Obama's tax plan," she added. "Why kill yourself working if you're going to give it all away to people who aren't working as hard?"
The attorney says that in order to decrease her income she'll have to let go of clients, some of whom she's been counseling for more than a decade.
"This means I'll have to tell some of my clients we can't help them and being more selective in general about who we help," she said. "I hate to do it." ...
Dr. Sharon Poczatek, who runs her own dental practice in Boulder, Colo., said that she too is trying to figure out ways to get out of paying the taxes proposed in Obama's plan.
"I've put thought into how to get under $250,000," said Poczatek. "It would mean working fewer days which means having fewer employees, seeing fewer patients and taking time off."
Oh my God, the stupidity. The article then quotes a financial advisor who explains the way that tax brackets rates work, but then quotes a right-wing business professor and the subjects of her article fulminating about class warfare. Pretty clearly the reporter started off on her mistaken premise, found some subjects who shared her ignorance, and then came across a financial advisor who gently corrected her. But, instead of nixing the collosally uninformed article, or writing a different kind of article ("Rich Morons Decreasing Own Income Due To Lack of Tax Code Knowledge") she instead plowed ahead with her initial premise.
This article is obviously an outlier, but it is an extreme manifestation of a broader phenomenon. Clay had a good post about how Politico's Jeanne Cummings has turned into a sounding board for right-wing economic notions. And Matthew Yglesias had a good point about how the media massively overrepresents the perspective of the rich in reporting and commentating on the tax debate. (It has framed Obama's plans as a tax hike when the vast majority of Americans will experience it as a tax cut.) Sadly, I think the next few months are going to bring us a massive surge of sympathetic and/or uninformed coverage of the tax debate from the perspective of the wealthiest segment of America.
--Jonathan Chait