Bush tax cut tactics spread to Democrats and beyond
By Bryan Keefer
In recent weeks, former Vermont governor Howard Dean's proposal to repeal the tax cuts passed in 2001 and 2003 has come under fire from other contenders for the Democratic presidential nomination as well as conservative pundits. Regrettably, some of these critics - including two of Dean's Democratic rivals - have used slanted statistics and outright misstatements that echo tactics employed by President Bush during his campaigns to pass the cuts.
During last Tuesday's radio debate among the Democratic candidates, for example, Senator Joseph Lieberman, D-CT, claimed that Dean "would repeal the middle class tax cuts. That would cost middle-class families in New Hampshire, [an] average family, $2,000 a year that they worked so hard for. He would take it back." (Lieberman also told reporters that Dean's plan "would take back $2,000 from the average family in New Hampshire" during a conference call on December 18, 2003.) The Connecticut senator made a nearly identical claim in a January 4 debate, stating that, "here in Iowa, [an] average family of four saved $1,800 a year under those tax cuts." Nor is Lieberman the only Democratic candidate to make such assertions. Senator John Edwards, D-NC, said on December 29 that Democrats "cannot say to the average family of four in Iowa: your taxes are going up by more than $1,700."
These statements appear to calculate the benefit to the "average" family either by dividing the total amount of the tax cut by the number of families receiving a cut, or by calculating the benefits of the cuts to specific hypothetical families. However, such methods often exaggerate the benefits of the tax cut for those with incomes in the middle of the income distribution - either because the arithmetic mean is skewed upward by the incomes of the wealthiest Americans, or because calculations are based on hypothetical families which benefit disproportionately. According to calculations [48K PDF] by the left-leaning Citizens for Tax Justice (CTJ), for instance, the average reduction in taxes for Iowa residents with incomes in the middle 20% of the income distribution resulting from the 2001 and 2003 tax cuts is actually $908 for 2004, not $1,700-$1,800 as the Democrats quoted above claim. Likewise, CTJ notes that the average cut for New Hampshire residents with incomes in the middle 20 percent of the state's income distribution is $1,110 in 2004, not $2,000. [48K PDF]
These are tactics that the Bush administration has repeatedly used since it came into office. On several occasions last year, for instance, the President cited a hypothetical family of four making $40,000 that benefited disproportionately from the 2003 tax cut (its taxes would have fallen from $1,178 to $45) as proof that his plan "is good for the average citizen," including during a speech in Ohio on April 24, 2003. He also claimed in 2003, as he put it during his January 11, 2003 radio address, that "Ninety two million Americans will keep an average of $1,083 more of their own money" under his 2003 tax cut (one of many such misleading "average" statistics he has cited).
Democratic candidates are not the only ones to use such misleading figures to attack Dean's economic proposals. Heritage Foundation fellow Daniel Mitchell suggested in a December 19, 2003 opinion column that "Howard Dean, for instance, has said he would repeal the Bush tax cuts -- even though this would boost the average family's tax burden by nearly $2,000." Club for Growth President Stephen Moore, whose organization is running ads in Iowa and New Hampshire asserting that Dean "says he'll raise taxes on the average family by more than $1,900 a year," made a nearly identical claim on CNN's "Crossfire" on January 7 of this year. Moore stated that "the torch-bearer for the Democrats is a guy who's talking about this gigantic tax increase on middle-class voters. He's not talking about taxing the rich. He's talking about average middle-class voters who would have to pay about $1,900 a year more on his tax program." As we have previously noted, however, Moore is referring to an "average family" constructed by the Bush administration that benefits disproportionately from the marriage penalty phaseout and accelerated child tax credit, and is not representative of the tax cuts received by families in the middle of the income distribution.
Another misleading statistic came from syndicated columnist Robert Novak last week. Novak wrote that "The Heritage Foundation 's analysts show the Dean repeal would mean a 74.2 percent tax increase for families with adjusted gross income between $10,000 and $20,000 and a 44.9 percent boost for $20,000 to $30,000. Incomes over $500,000 would face a 4.4 percent tax increase." The October 2002 Heritage Foundation study Novak cites does indeed make these claims. However, by repeating the Heritage statistics, which omit the actual dollar figures for the tax cuts received by these families, Novak exaggerates the cost of repeal for low-income families, which are often quite small since low-income households already pay little in federal income taxes. By contrast, those at the top of the income distribution receive far more of the benefits of the 2001 and 2003 tax cuts in absolute terms - and would bear a much greater share of the burden of repeal.
Novak is echoing another tactic that the White House has employed in arguing for the benefits of its tax cuts. By omitting dollar amounts, Novak makes the potential distributional effects of repealing the Bush tax cuts seem skewed against the poorest Americans, while failing to provide the context that absolute dollar figures offer. Bush has frequently employed just this strategy in the past, focusing on misleading percentage reductions for hypothetical low- and middle-income families, as he did in a January 22, 2003 speech.
Candidates and pundits have also incorrectly suggested that "Dean wants to raise taxes on everybody," as Lieberman put it in a December 14, 2003 interview in the Ft. Lauderdale Sun-Herald. Repealing Bush's tax cuts, however, would not affect workers who paid no income taxes prior to the 2001 tax cuts. Yet Jonah Goldberg suggested that Dean's proposal would "raise taxes on everybody" in his January 6 syndicated column, which was also published in the Washington Times (1/6), Philadelphia Inquirer (1/8), and Kansas City Star (1/8). And commentator Bay Buchanan stated on CNN's "Inside Politics" on January 8 that Dean "spent most of the last year saying that the president's tax plan was an awful thing, it should be repealed, which basically says he wants to raise taxes on everyone."
Bush has frequently made similar claims, like his statement on January 9, 2003 that the 2001 tax cut was "tax relief for all citizens" and that "We've reduced the tax rates for everybody who pays taxes." In fact, only workers who paid income taxes received any benefit from the cuts (workers who paid payroll taxes but not income taxes did not receive any benefit).
The fact that so many pundits and politicians, including prominent Democratic presidential candidates, have adopted the administration's deceptive strategies indicate that the White House is setting the tone for the 2004 campaign.