Grading ZFC: More Republican Math!

PolitiFact Bias (PFB) writer Bryan White, via his conservatively skewed website Zebra Factcheck (ZFC), has committed a very similar error it pointed out in a recent PolitiFact Georgia fact-check on Cato Institute's Michael Cannon's statement concerning Obamacare "exchanges" being outlawed in Georgia. And I have to admit they both had a point: Cannon was talking about Obamacare exchanges in Georgia and in context he said--right at the beginning--that "by default" the feds would do their own exchanges in response. PolitiFact seemed to ignore this part of Cannon's claim and conflated it into something that should not have been called false. Yes, score one for PFB and Michael Cannon.

 

The error in this case is one which ZFC's writer Bryan White might call, if I had done the same thing, a logical "Red herring" or "Straw man." He does this in his fact-check of a statement by the Congressional Progressive Caucus (CPC)--that "Across the board tax rate cuts are regressive because a 20 percent tax cut for a millionaire – even as a share of income – amounts to a far greater benefit than a 20 percent cut for a hardworking low income American.” Instead of examining the premise of the statement he goes into a multifaceted dissertation on "effective tax rates" complete with pretty graphs, on how the overall rates were truly progressive up until seven years ago, and why poor Mitt Romney pays a lot more than Joe the Plumber.

 

He did not even try to actually calculate in numerical terms  whether there was a disproportional benefit to the rich of the across the board tax cut in and of itself. He even had something in his fact-check on how to "get there", quoting the IRS: “A tax that takes a larger percentage of income from low-income groups than from high-income groups.” So I will "get there", using two hypothetical progressive tax rates very close to what we have today, utilizing the 20% across the board factor.

 

Click to enlarge:  The 3rd thru 7th columns only needed formulas.

In the example above, we are using a 10% rate for a person with taxable income of $25,000 and a 25% rate for someone with income of $250,000, the current taxes paid using those rates, then re-calculated for a uniform across the board tax rate reduction of 20 percent. All other factors--excise taxes, corporate taxes--would be ignored because we are only concerned with the income tax cut itself and its effect on after-tax income (as that is the premise of the CPC statement). As shown in the last, highlighted bright yellow column, as a percent of after-tax income, the $250K earner has three times the additional income than that of the $25K earner. Now, you might say that it's because of the difference in tax rates, but even if you factor that in, the $250K earner still has 20% more after-tax income. THAT is the "far greater benefit" the CPC is talking about. The (yes, liberal) Center for Budget and Policy Priorities explains this "concept" as well in a website article. They chart the "regression" by income category.

Lil White (Un)Lies: Ineffective Tax Rates Part 2

Actually this could be called Part Three of a Lil White Lies post on a Sublime Bloviations/PolitiFact Bias cross-post of two critiques, on the way PolitiFact makes use of “effective tax rates” in its rulings. The first part, however, had to do with one fact-check to another, so I made that a separate post. Both of these have to deal with those effective tax rates.

Author Bryan White claims that PolitiFact has shown a “persistent pattern of ignoring and/or minimizing data on effective federal tax rates, including a study by the otherwise esteemed Congressional Budget Office.” So, do they? Well, it depends.

Carried Away with Carried Interest. Let's first take a look at the payroll tax, where one half is paid by the employee and the other is paid by the employer, for herein lies the "rub." For effective tax rate purposes, the half paid by the employer is usually shown as part of the employee’s tax burden, because supposedly their income would be increased if they did not have this tax. I realize there’s currently a payroll tax holiday of 2 percent, but we know that’s going to have to end sooner or later. The total tax for Social Security and Medicare is 15.3 percent, and that is taxed on all income from the get-go. The carried interest rate is the capital gains rate of 15 percent on taxable income—that’s income after deductions. So it could be said that if you’re not an investor, you’re saddled with pay roll taxes at a slightly higher rate than the carried interest. But there’s more-- the carried interest person is “done” at this point—they owe no more. You still have to pay federal income taxes. That’s why Warren Buffett calls payroll taxes "heavy."

So with that in mind, when Buffett talked about his secretary and Sherrod Brown talked about sheet metal workers and teachers in Cleveland (although I have a few misgivings about that one, explained below), they were comparing capital gains/carried interest tax rates versus middle class straight compensation tax rates. For the middle class (in 2011) it’s 10 percent up to $8,500, 15 percent up to 34,500, then 25 percent (single--double that for married filing joint). When it gets to the top rate of 35 percent it’s not “middle class” anymore. But compare that 25 percent to the 15 percent flat rate for capital gains and carried interest, and then think about the payroll taxes already paid. It should be obvious the investors pay far less in income taxes.

Where a statement used “hedge fund managers” or implied carried interest/capital gains (as Buffett did when he said “investors”) PolitiFact writers seemed to keep that in mind, awarding Buffett and Sherrod a “True.”

Historically Taxing.  White’s beloved overall effective tax rate which includes corporate tax rates was used in comparing taxes paid historically, as in two rulings about rates in the 1950’s compared to now, from Obama and Debbie Wasserman-Schultz. It was also used (the CBO reports to which he refers) in a ruling on a statement by Timothy Geitner. He was ruled Half True because his statement was a combined one: he said “For people in the top 1% of income, ‘your effective tax burden is in the low 20's, the lowest it's been in decades’ (effective tax rates = True) ...’lower than somebody who might make substantially less money’ “ (effective tax rates = False, because he’s NOT talking about carried interest/capital gains).

Click to enlarge:  This graph from the Piketty/Saez tax rate report shows how rates have changed at the top over the years.

Call Me Maybe. When the context of the statement isn’t clear—where it may be referring to investors as well as those compensated ( both types in one income group), PolitiFact generally equivocates to Half True. Obama’s statement about Mitt Romney's 14% tax rate being lower than most other Americans , or when he stated that a construction worker who made $50,000 shouldn’t pay a higher tax rate than someone making $50 million a year, were both rated Half True. However, in a similar comment made a few days before the one about the construction worker, Obama said “somebody who's making $50 million a year in the financial markets should be paying 15 percent on their taxes when a teacher making $50,000 a year is paying a higher rate” which is clearly about carried interest/capital gains, and probably would have garnered Obama a higher ruling. But Obama was not that specific in the statement PolitiFact decided to rate.

Lil White Lies: Ineffective Tax Rates Part 1

Trying to determine a link gone bad at PolitiFact, I came across an interesting article in defense of Mitt Romney’s 13.9% tax rate from the Tax Foundation, one of PolitiFact’s oft-used sources. An article by William McBride is headlined “At least 90 Percent of Americans Have a Lower Income Tax Rate than Romney” complete with a large pie chart depicting by slice the range of rates Americans pay. Between this and another article disputing it from a website called “Just Facts” it would seem PolitiFact might rethink its position on a ruling of “Half True” for Obama stating that most people pay more taxes than Mitt Romney.

But there’s a lot of argument about what rate is being talked about, because it would appear that the Tax Foundation article concerns itself with federal income taxes only. And for that part, PolitiFact’s ruling was in agreement. However, it wasn’t in agreement when the payroll taxes were included. An article at Factcheck.org essentially said the same thing: “it depends.”

My conservative counterpart (in two posts) argues that if payroll taxes are included, so should corporate and excise taxes, as part of an overall effective rate. The corporate tax rate appears to be something, however, that all the fact-checkers seem to avoid, for a lot of good reasons. As noted in one PolitiFact tax-related ruling:

The burden for some taxes, including corporate taxes, excise taxes and estate taxes, are hard to attribute to individual returns, so we’ll set those aside. But one federal tax is straightforward to throw into our calculations: payroll taxes.

And since the fact-check is on Romney’s individual return, corporate taxes were not included. It’s not a direct, out of pocket tax like the payroll tax. It’s what’s known as an “imputed” tax, and it’s very difficult to measure:

We will assume that the corporate income tax falls entirely on capital income and that all financial assets (and not only corporate stock) bear the tax equally. Auerbach (2006) summarizes the literature on the incidence of the corporate income tax and points out that there is still considerable uncertainty on the question because of the inherent difficulty in measuring empirically the economy-wide incidence of the corporate tax.

“Just Facts” (which I like to call “Just Cherry-Picked Facts” because they appear to be only about “facts” right-wingers love) insists that the corporate tax be “incorporated” into Romney’s effective income tax rate, but proposes three scenarios in how it might be computed, resulting in an “effective rate” of anywhere from 18 to 26 percent. In other words, it’s not very accurate, because we don’t know how to apply it.

Not only that, they may have determined the rate based on too much of Romney’s income.  According to an article in Daily Finance on Romney:  (emphasis mine)

Lil White Lies: Panic A Tax

Say we were three ambitious little kids who agree to contribute one third of our lemonade stand take to start the Big Lemonade Corporation. I had a really great traffic spot and made $900, but each of my buddies collected $300 each. So we had $500 total from the one third rate of contribution , $300 from me and $100 from each of my buddies. Of that $500, 60 percent was from me ($300) and theirs was 20 percent each ($100)…. In other words, I paid the same rate (one third) but it was a greater share (60%).

I don’t know how else to more simply explain this recent complaint at a cross-posted item at PolitiFact Bias and Sublime Bloviations, comparing a statement by Obama about tax rates with a statement last year by Michele Bachmann about tax share (as well as an insistence that PolitiFact is bound to use the "effective tax rate" he prefers).

Instead of reaching back to 2011 for apples to oranges, he needed only go to a recent PolitiFact Ohio ruling in March of Republican congressional candidate Jim Renacci, a ruling he may have dismissed since PolitiFact judged it to be True. Renacci said "The top 1 percent (of income earners) paid 36.7 percent (of the taxes). ... The top 50 percent pay 97.7 percent." We also need to put this in proper context, because he was talking about income taxes: as noted by the PolitiFact ruling “he was attempting to shoot down ‘a misconception on wage earners and income taxes paid,’ citing the percentage of the nation’s taxes paid in 2009 based on income levels.”

Previous to Renacci’s statement, PolitiFact had found four statements of the same order—income tax share—all True by Republicans Ron Cornilles, a congressional candidate, Texas Senator John Cornyn, Virginia congressman Eric Cantor and Georgia congressman Tom Graves.  Why didn't PolitFact Bias' Bryan White cite one of these (even though it was still apples to oranges)?  Perhaps because, Bachmann was found False, or as stated in the Cornyn ruling "...scoring points on tax policy depends on how you frame the issue."

And  Bachmann framed it incorrectly.  She was asked in an interview “shouldn’t the tax burden be equally shared.” To which she responded similarly to the others, only she (very clearly) said all taxes, not just income taxes, as was used in the rulings above.  Her ruling cross-referenced a claim made in 2009 by Nancy Pelosi—found False by PolitiFact-- that Bush's tax cuts for high earners "have been the biggest contributor to the budget deficit."

This seems to be the difference between Republicans and Democrats when it comes to debating our tax policy: Republicans stress share while Democrats stress rates. By the way, Democrat Debbie Wasserman-Schultz was called out False by PolitiFact for telling Wolf Blitzer on CNN that what he may have heard from one of these congressmen about the income tax share wasn’t true .

As far as White's complaint about "effective tax rates" ("that messy corporate and excise tax stuff") an extensive review of statements by Democrats on this topic as graded by PolitiFact did reveal some  incongruities and it's going to take another post all its own to reconcile them all, if that can be done. So while I'll say he may have a point, I won't be getting into it until later.

White needs to find a PolitiFact statement by a Republican on rate of taxation used in a similar context, particularly one rated “worse” for a Republican, where rates are compared between high and low income earners, or on an historical basis, not the share of taxes paid. The ruling evidence indicates that on income tax share, Republicans tend to emphasize that lower income earners don’t contribute a lot, which has been consistently rated True by PolitiFact.  Comparing the Obama ruling to  the one he chose of Bachmann didn't prove anything.

And don’t call PolitiFact overwhelmingly hypocritical when a decent apples-to-apples example of how PolitiFact rates Republicans differently than Democrats can’t be cited. Yes, PolitiFact is not perfectly consistent (and neither is White, obviously!), but it doesn’t prove any liberal bias.

Grading PolitiFact *Liberal*-Style: Tricky Mitt

The Merriam-Webster web page for the definition of “trick” includes a “synonym discussion” at the bottom of the page. There it lays out different forms of the word trick as a maneuver which“suggests adroit and skillful avoidance of difficulty < last-minute maneuvers to avert bankruptcy>."

So, let’s replace the “avert bankruptcy” with “avoid paying taxes” and you can see why PolitiFact’s calling a recent claim by Obama describing Romney’s carried interest maneuvers as “tax tricks” isn’t quite as “Mostly False” as its ruling portrays.

Obama never said Romney was doing anything illegal. Tricks may imply deception, but, as described in the definition, they are often to a harmless end. Romney may have avoided millions in taxes, but this is supposed to encourage entrepreneurship.

I would not call itemized deductions for property taxes and mortgage interest “tricks” because they are commonly used, available to everyone who owns a home, and transparent. “Carried interest” however is a complicated strategy, for only the extremely wealthy, that must be explained, often in the “fine print” of management agreements. Its “trickiness” derives from its complexity.

It should also be noted that getting rid of the carried interest “trick” (and taxing carried interest at higher ordinary income rates instead of at the  lower capital gains rate) was on Obama’s promise list, and it is considered “stalled.” There, it is termed a “tax loophole”, which is defined by Wikipedia is a “an ambiguity in a system, such as a law or security, which can be used to circumvent or otherwise avoid the intent, implied or explicitly stated, of the system.”  Circumvent?  Avoid the intent of the system? Sounds like a "tax trick" to me.

There’s also an underlying argument here with regard to Mitt’s not disclosing previous tax returns (which exacerbate the “trick” because they also imply some deception) and all the money he stashes in  those offshore accounts,  in order, of course, to avoid taxes, which PolitiFact has found to be, in two cases, True. This tends to makes the trickiness factor of Mitt’s tax maneuvers inconclusively Half True—partially accurate but leaving out important details, not really misleading as would be the case of a Mostly False. 

Even the ruling admitted that some of the tax experts they (writers Jon Greenberg and Louis Jacobson) consulted thought that "Obama's use of the word 'trick' is fair."  Fair enough.  "Mostly False" is a little too harsh.

Grading PolitiFact *Liberal*-Style: Flat Tax Fever

Rick Perry's Tax Plan appears to have a different satirical pop culture twist than the “9-9-9” Cain Tax Plan: Herman Cain’s plan comes from the game SimCity 4, while Perry’s pandering “Taxpayer’s Choice” is not taken from anyone (except maybe Steve Forbes) and amounts to nothing more than maybe one of the Seven Dwarves: Dopey. Well, he was acting that way recently himself, so maybe there’s a connection.

According to Rachel Maddow, this plan “accomplishes the same goal of huge tax cuts for rich people and big tax hikes for everyone else." The “same” refers to Cain’s “9-9-9" Plan. PolitiFact’s verdict on the ruling:

Some other Americans--including 45 percent of residents earning $19,343 to $39,862--also would see tax cuts, a projection that does not support the claim that the plan means big tax increases for everyone but the wealthy. Perry’s plan allows every taxpayer to continue under the current system. No one would pay more unless he or she chooses the flat tax against their financial self-interest.

Maddow’s statement, leaving the incorrect impression that Perry’s tax plan hugely benefits the rich while everyone else pays more, rates Mostly False.

Here’s what FactCheck.org has to say about the Perry Tax Plan: (emphasis added)

But that’s not true for everyone, even though the Perry plan would result in a dramatic decrease in overall revenues, according to the Tax Policy Center analysis. The Tax Policy Center predicts that Rick Perry’s “flat tax” plan would amount to a tax cut of $570 billion in its first year after enactment, compared with current tax rates. More than half the benefits would flow to persons making more than $1 million a year.

However, many lower-income persons and families would see taxes go up. That’s because, although Perry has said he would continue the “current” income-tax system for those who prefer it, the TPC said Perry’s plan seems to allow all the Bush cuts to expire on schedule, including lower marginal rates at the bottom.

As a result, either the new Perry flat tax or the “current” tax system (once the Bush cuts expire) would mean higher taxes for many, compared with what they would pay at current rates. The TPC projected, for example, that taxes would go up for 63 percent of individuals and families earning between $40,000 and $50,000 a year, for an average increase of $248 in 2015. For those earning between $20,000 and $30,000, the tax hike would be even more painful, amounting to an average of $462 in higher federal income taxes.

Based on this information we can conclude that the Perry Tax Plan:

Grading PolitiFact *Liberal*-Style: Slam Bam Bachmann!

Or:  How to give Michele Bachmann a *True* in 240 words or less

The United States in 1913 was far different than the it is today. “Unions” were limited to craft guilds (and I believe that “collective bargaining” as we know it today was illegal). There was no Social Security, no Medicare, no Medicaid. The freeing of the slaves in the south gave way to rampant Jim Crowism along with racial subordination. Women could not vote. When you went to the hospital, it meant you were going to die. There was no infrastructure yet—such as the interstate highway system—as cars were just coming of age. And it would be another year before a major world war would start, necessitating a stronger defense, and the U.S.'s coming new world role as a formidable foreign power. Military investments by our government later enabled the space age and the advent of NASA.

So yes, Michele Bachmann saying that income taxes were 7% in 1913 and were 70% by 1980 (in this PolitiFact ruling) was True, but it was a far different country we lived in as far as what services our tax revenues  provided. And, taxes didn’t rise on a straight line, either, as writer Lou Jacboson briefly recognized in two short paragraphs, “…For every year between1944 to 1963, the top tax rate exceeded 90 percent.” That’s a period of 19 years, until it was lowered to the rate Bachmann specifies.

The other implication of her statement seems to be that taxes rose steadily until about the time Reagan became president, to give Ronald Reagan credit where credit wasn’t really due, as the one who started the movement to cut taxes (since shortly after his initial cuts, he went on to raise them several times). One Facebook commenter, Dean Hare, put it this way:

I would have ranked this as Mostly True due to the cherry-picked dates, because the rates during the Eisenhower administration were 91%, and all the current Republicans want to out-Reagan Ronald Reagan by making 'Historic" tax cuts. You were a little generous and need to re-visit this. I think you need to keep in mind with ALL your tax policy rulings the facts that the World War II debt was paid off with these high tax rates and an economy booming with publicly funded physical and intellectual infrastructure spending (ie: Government Stimulus on roads, the military and education). Too many of your rulings forget the tax policy and federal spending history from the 1945-1980 era -- and you also refuse to cite the eleven tax increases Reagan signed into law after it became obvious his initial cuts were too deep, requiring additional revenues.

Another Facebook commenter (or topic page) with the  name "Economics Online Tutor" published a comparison of U.S. economic performane and tax policies since 1913 on their Facebook wall, and it's worth a view in the context of Bachmann's other implication in this statement, that tax cuts stimulate the economy.

If a Democrat had said this I could just hear my conservative counterpart screaming that writer Lou Jacobson was ignoring the underlying argument (but neither blog post nor Facebook comment could be found on that from him, being as Bachmann is a Republican). Without underlying context Bachmann’s statement means very little, and there’s more than a few caveats here. This is not the usual Bachmann whopper, but PolitiFact certainly appears to be throwing her a bone in the way it was ruled on.

Lil White Lies: No Way Out

My good friend Janet is a smart lady who’s worked in IT most of her life, has taught herself the cryptic programming language C++ (I don’t know if it’s even in use anymore) and has a web host certification along with a lot of other skills. She’s been off and on employed since late 2003, currently unemployed. Her husband has a very steady job so she isn’t hurting; she’s been wise enough to pay off her home and I’ll just say, Suze Orman would probably love to make her an example of living lean and not getting into debt.

Anyway, when we visit we usually go out to eat and sit and talk until the restaurant kicks us out. One of our last conversations was about taxes. She’s accepted that she can no longer get the type of IT programming job she once had in the higher income brackets, but the marginal tax brackets made the lower paying jobs less desirable because of the large bite of Federal taxes when her pay was added to her husband’s: in other words, her entire paycheck got taxed at the 15-25% rate once his pay has been subjected to the lower bracket rates. On top of that, she would be hit with 7.65% in payroll taxes.

This is an intro to my conservative counterpart’s most recent missive on PolitiFact’s ruling of True on Warren Buffet’s New York Times op-ed statement “The ‘mega-rich’ pay about 15 percent in taxes, while the middle class ‘fall into the 15 percent and 25 percent income tax brackets, and then are hit with heavy payroll taxes to boot..’" You’ll see how it figures in as we go along.

Screenprint to prove Bryan's error before he sneaks in and corrects it.

 Bryan White gets off to a great start with his own flub on Adjusted Gross Income (AGI). AGI is the line on your Federal Income Tax Return where you add together all your sources of income and make any adjustments: this would include, but is not limited to, wages, interest, dividends, capital gains, rental income, pensions, etc. He provides an example of “effective” tax rates as follows: (emphasis added)

For purposes of illustration, suppose we have a worker who earned $15,000 over the course of a year. After deductions, the worker has $1,000 of taxable income, and that falls for purposes of our illustration into a 10 percent tax bracket. The worker would owe $100 in taxes, and that tax payment would represent an effective tax rate of 0.67 percent (100/15,000). Alternatively, one might use adjusted gross income as the denominator in the equation. In that event the effective tax rate in our example would equal the marginal rate (10 percent).

He’s saying that the Adjusted Gross Income is $1,000?  A review of the adjustments to gross income to be subtracted are not the type of things a “worker who earned $15,000” would be likely to have, such as self-employment taxes, and IRA/HSA deductions are limited in amount. Apparently, Bryan has his taxes done or knows nothing about them. But the 10% of AGI is not correct, it would still have to be taxable income, or the term I think he meant to use, which is the marginal income, or $100/$1000. The other problem here is he’s ignoring the “heavy hit of payroll taxes” as Buffet said in his op-ed, so his example actually paid an effective rate of 8.3% ($1247.50/$15,000). That’s more than 12 times higher than Bryan’s .67% example, but that’s more like reality. So let’s look at that in total compared to Buffet: he made 2,667 times what Bryan’s taxpayer example made in AGI, or 40,000 times what he made in taxable income; percentage wise, though, Buffet paid just less than twice as much tax. Yeah, that probably sounds fair enough to Bryan.

So now that we’ve cleared up Bryan’s muddled way of providing “background” let’s continue with his twisted tale of PolitiFact analysis. He quotes PolitiFact’s story on Buffet, where Buffet establishes the point that writer Angie Drobnic Holan is going to fact-check. He comments:

…it should be instantly obvious that Buffett is talking about effective (federal) income tax rates on adjusted gross income. In Buffett's version of events, the progressive system of tax credits and deductions does not exist. Neither counts against the type of effective tax rate he measures with his informal workplace survey. Misleading? Yeah.

I don’t think Buffet is pretending the “progressive system of tax credits and deductions does not exist.” “Their tax burdens ranged from 33 percent to 41 percent and averaged 36 percent” along with the headlined fact-check “the middle class ‘fall into the 15 percent and 25 percent income tax brackets’” indicates he is highly aware of the way progressive taxes work.

But because Drobnic Holan confines her review to Buffet’s contention that the middle class tax rates generally fall between the brackets of 15-25%, and because Bryan believes Buffet is talking about effective rates, he terms Drobnic Holan’s review criteria as “very narrow” and then finds a way to mischaracterize both.

Sidebar: TIN-flation

Recently Rick Snyder, the newly elected “One Tough Nerd” governor of Michigan, put forward his proposals to get the state out of its huge fiscal deficit: one of them was to no longer exempt pensions from the state income tax. Apparently this would bring revenues of roughly $900 million for the state.

At first, the thought that retired hardcore Republican Michigan residents (like Rich Peasel, and other retirees I know) would now have to pay this tax made me smugly smile and giggle with vengeful pleasure. Rich has gone silent lately with his Flint Journal journalistic career: maybe because he knows he might see a comment from me that says “Hey Rich—how’s that voting for Rick Snyder workin’ out for ya?” But eventually, the tax implications also came home to roost for me as well, when I sat down with a calculator to determine their impact.

Michigan has a lot of auto company retirees and public employees with pretty sizable defined benefit pensions. So it made sense in that regard. On the other hand, the pensions are fixed incomes: for most retirees, it’s a zero sum game. If you’re working, you might be able to make up for the income lost by a new tax by working harder, by getting another job, by getting a raise or bonus. But if you are elderly and not able to work (especially in this economic climate), you have to take from something else in your budget to pay the tax. So it means that $900 million will come out of the Michigan economy somewhere because consumption will be reduced.

But there’s another factor at play for me, and I call it TIN-flation: it’s the combination of TAXES and INSURANCE. Inflation has been relatively benign since the 1970’s: and as a consumer, we have some degree of control over it. It was not a huge concern for me when I retired in 2008, I had some strategy for contending with it. But taxes and insurance have already eaten away, by my estimation, almost 10% of my income. And both are something over which I have NO control, except perhaps with the income tax proposal by Governor Snyder.

Lil White Lies: The Tax Cut Billemma

Emphasis added is a very important feature of this critique, for it spells out the differences for which PolitiFact’s critics think it can be rebuked.

PolitiFact Virginia’s fact-check reads as follows (emphasis added): that Robert C. “Bobby” Scott (D-Va.) claimed “The tax-cut deal [Tax Cuts Compromise] ‘adds more than $800 billion to the deficit over two years -- more than the cost of TARP and more than the cost of the Recovery Act’ and about the same as health care reform.”  It ruled his statement Mostly True.

Robert C. "Bobby" Scott (D-Va.) actually said in his statement: (emphasis added)

“This bill adds more than $800 billion to the deficit over two-years – more than the cost of TARP and more than the cost of the Recovery Act. It costs about the same over two years as the 10 year cost of the Health Care Reform bill, which we paid for." …

But Bryan White finds his loophole in the second paragraph: (emphasis added)

“We cannot add more than $800 billion to the deficit through tax cuts and tell the American people with a straight face that they won’t have to sacrifice anything in the future to balance the federal budget. If we didn’t have the political will to end the Bush-era tax cuts tonight, we certainly won’t have the political will to do it two years from now during a presidential election.”

According to Bryan, it’s “tax cuts” only that adds $800 billion to the deficit, and not “the bill”, and since it’s only tax cuts, the $800 billion is incorrect and also less, not more than the cost of the TARP, ARRA and the HCR bills. Note (1) That it is the bill he says adds more to the deficit than TARP and the Recovery Act, and that IT (the bill) costs about the same as HCR; and that (2) Scott initially calls it “the bill” and then (in the second paragraph) refers to it as tax cuts. It appears Scott is using “the bill” (or “tax deal” as PolitiFact refers to it) interchangeably with tax cuts. He could be talking about either one or both. Maybe he just didn't want to get into all the detail, since even Bryan admits, 90% of it was tax cuts.  So PolitiFact writer/researcher Wes Hester chooses (or as Bryan would say, selects “with bias”) the FIRST description—bill—the beginning subject line for the statement--but Bryan thinks it should be the second paragraph “context” line, which is “tax cuts”. Further aggravating the rhetoric is PolitiFact referring to the bill (or tax cut) as “tax deal” in its title which Bryan uses to further his cause.

As a believer in the “Laffer” curve, I find it troubling that the tax cuts, as they were originally put in place in 2001 and 2003, failed to increase tax revenues, and job creation remained flat. So, while there may be some economic recovery, there will likely be no “payback” for this tax compromise. This means in terms of “offsets” to cost, the TARP and HCR contain more “offsetting” factors than the Tax Compromise, while the ARRA is about the same, i.e., it’s hard to tell.

Sidebar: Vampire Vegetarians

Some PolitiFact commenters who are ardent conservatives like to label all Democrats as having an *entitlement mentality.* I do not believe that. I know more successful business owners who are Democrats and even more life long union members who are Conservatives. One would think it should be the other way around.

I love this toon!

As a committed stock market investor since about 1985, one would think I was Republican. Personally, I could be if the party accepted moderates or socially liberal Republicans. Even now being retired, my 401K, IRA and outside investments have (obviously) become much more….conservative. I still get a lot of emails from different investment websites I’ve (somehow) given my email address to, just to see what they have to say. Many so-called investment advisors put their conservative leanings out there, such as this email from Gary Shilling of Forbes. Nevertheless, they still have compelling things to say.

The sentence that jumped out in this letter was “By 2018, 67.3% of the population will be financially dependent on government.” As of 2007, according to Shilling, 58.2% of “Americans…are dependent on the government for major parts of their income.” Shilling offers no solutions to this criticism, however, only to use it to make the claim he can make me money “hand over fist” with his for-fee-only investment advice…well, as a conservative investor, I’m not touching that.