Tendentious on Taxes
June 24, 2001
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As part of its continuing campaign against the Bush tax cuts, the New York Times op-ed page today prints an article complaining that 34 million American adults will get no tax rebate checks this summer, and that another 17 million won't get the full rebate of $300 per person. "The tax rebate program is only the most recent example of the federal government's awarding special preferences to payers of the income tax," the Times op-ed claims.
What are these "special preferences"? The op-ed goes on to explain: "People who donate to charities are permitted to take tax deductions offsetting the contributions, but the deduction can reduce only income taxes. If the taxpayer makes a contribution to a charity but owes no income tax, the deduction is completely lost. The same is true for virtually every deduction found in the tax code, including those for medical care, home mortgages, casualty losses and countless other everyday costs."
Well, by this strange definition, people who don't itemize on their taxes also receive "special preferences," because they are allowed to take the standard deduction even if they didn't make charitable donations or mortgage interest payments that added up to the amount of the standard deduction. In other words, in some cases of people who donate to charities but who do not pay income tax, the deduction is not "completely lost," it is subsumed in the standard deduction. Many people who pay no income tax are already getting substantial direct benefits from the government -- disability payments, subsidized housing, food stamps, the earned-income tax credit -- that far outweigh the value of any foregone tax deductions.
The Times op-ed says, "Greater fairness in taxation would require major changes in the tax structure, like allowing most taxpayers to obtain deductions currently tied only to the income tax." But fairness, at least outside the confines of the Times op-ed page, is a two-way street. For all the talk about fairness, the article never mentions the progressive rate structure of the American tax code. Is it fair for high-income taxpayers to pay higher rate on their last dollar earned than low-income taxpayers do? In fact, the Times suggestion wouldn't necessarily increase "fairness." It would probably have the effect of taking more money from the people who earn lots of it and giving it to the people who earn less of it. The Times article might consider this "fairness," but it often doesn't seem very fair to the high-income people who worked hard to earn the money in the first place. Proponents of a flat tax could use the "fairness" concept to argue for a tax code in which everyone, rich or poor, pays the same tax rate. But that is not what the Times means by "fairness."
The article concludes: "at the very least, when Congress gives a one-time rebate to share the surplus and give a boost to the economy, that rebate should apply to all taxpayers, not just those who happen to pay income tax."
Smartertimes.com has nothing against payroll tax relief. But the Times has stood athwart the centerpiece of President Bush's plan for payroll tax relief: a partial privatization of Social Security.
Lost in New Jersey: Gene Baumgaertner of Florham Park, N.J., notices that in the New Jersey section of today's New York Times, there is an article referring to Moorestown, N.J., and a map accompanying the article showing the location of Morristown, N.J., Moorestown in the article, Morristown on the map.
Note: Smartertimes.com is in Maine this weekend and is operating off the online edition of the New York Times.
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