01 October 2017

Trump's Tax Plan and How Corporate Media Reported It

If you wonder why the "basket of deplorables" will not abandon Donald Trump, one of the answers is lack of correct information.

Take the proposed tax reform.

It is a massive giveaway to the One Percenters.

According to Tax Policy Center, a nonpartisan think tank these are the effects of the proposed reforms:
We find they would reduce federal revenue by $2.4 trillion over ten years and $3.2 trillion over the second decade (not including any dynamic feedback). In 2018, all income groups would see their average taxes fall, but some taxpayers in each group would face tax increases. Those with the very highest incomes would receive the biggest tax cuts.
In fact, 
Taxpayers in the top 1 percent, with incomes above $730,000 a year, would gain half of the overall benefits in 2018, with their average post-tax incomes jumping almost 9 percent. More than 97 percent of filers in the top 0.1 percent would see a tax cut due to the Trump plan—and a very large one, worth an average of $747,580—compared with about 70 percent of the poorest households.
All of this is to be expected. Reagan did it, Bush II did it. It is a classic Republican tactic. Make the deficit huge again by giving freebies to the richest and become a deficit-scold when there is a Democrat in the White House.

What irks me is the fact that the corporate media goes along with the Republican narrative every single time.

For this cycle, the GOP talking points focused on how their reform would benefit the middle classes. They claimed that the standard tax deductions would nearly double under their new plan and it was breathlessly repeated by the corporate media.

CNBCBBC , CNN, New York Times, Washington PostWall Street Journal, Forbes, Axios and many more reported that the standard deduction would double under Trump's plan, as it would go to $12,000 up from the current $6,350 (and 24,000 for married couple).

The problem is that this is not true at all. 
Here's how that math works. Let's say you are single with no dependents, and you have a moderate income. Currently, you get to take the standard deduction ($6,350) and one personal exemption ($4,050). If you are 65 or older, you also get to take an additional standard deduction ($1,250). That adds up to $10,400, or $11,650 if you're over 65.

The Republican plan would replace all these provisions with a single deduction of $12,000 ($24,000 for married couples.) That's a 15% increase — except for seniors, who get a 3% increase.
But that modest break will be swallowed almost entirely because the GOP plan calls for the lowest income bracket to be taxed at 12 percent instead of the current 10 percent.

What that means that everyone will pay 12 percent tax on the $9,325 part of their income, which works out to be $1,119.

At the other end, the top tax bracket (which currently stands at 39.6 percent) will be brought down to 35 percent.

In other words, Trump's plan is increasing taxes for the lower income folks and massively reducing taxes for the richest households in the US.

And this is sold as "doubling the standard deduction" to the basket of deplorables.

Sure some media outlets questioned the math behind it. But, for the most part, in the mainstream media, the language was so timid that you couldn't be sure whether it was a good thing or a boldface lie.

Instead of pushing Russia meddling in election stories, corporate media should look into how they report the news.

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