DO YOU UNDERSTAND HOW THIS WORKS: Does anyone know how the Perry plan works? Watching cable TV last night, we were reminded of the old joke, the one called Goldberg’s Law:
“The man with one watch always know the time. The man with two watches is never quite sure.”
So it was as we watched the pundits describing this tax plan last night. How does the Perry tax plan work? If you watched one channel, you might think you know. If you watched two, you aren’t really sure.
Let’s run through a set of cable hosts and guests, several of whom are clearly part of the cable TV booboisie:
Chris Matthews, Hardball: Let’s give this big dumb nut-case some credit for once. It’s always hard to tease a coherent statement from Matthews’ nightly rants. But on Monday, he seemed to be saying that everyone pays the same percentage of their income under “flat tax” plans.
That wasn’t true of the Forbes tax plan. It isn’t true of the Perry proposal. And by gum! Last night, Matthews had adopted a different rant altogether! Plainly, someone had re-scripted this big dumb cable nut.
By last night, Matthews’ basic complaint was even accurate! But not before he kicked things off with this off-message statement:
MATTHEWS (10/25/11): Now [Perry] is going into taxes. Taxes bother people. They’re heavy in this country, maybe not as heavy as they have to be at some point, but they’re heavy already. They hurt people. And here he is with this plan. Now, I’m going to ask you guys what you think of this so-called plan. He unfurled his economic plan today. The plan gives taxpayers the option of playing a flat 20 percent tax, or they can keep their old rates. The plan also calls for lowering the corporate tax rate to 20 percent.Taxes are heavy in this country? Taxes are about as low as they have ever been! Obvious explanation:
Chris hasn’t completed his reprogramming from the Jack Welch days. At times, he still emits the bumper stickers of the side for which he once whored. But give him credit! Once he got last night’s rant in gear, he remembered what he was being paid to say now. He didn’t pretend that everyone would pay the same percentage of income under Perry’s plan. Instead, he advanced an accurate criticism, complaining that the Perry plan “would overwhelmingly help the wealthiest Americans...It’s clearly aimed directly at helping the rich.”
Chris didn’t mention the larger problem—the fact that this plan would drain the treasury at a time when we need more revenue. But give him credit! At $5 million per year, a flea-ridden poodle can only learn so many new tricks in a day.
Let’s move to the evening’s contradictions:
Jim Angle, Special Report: On last evening’s Special Report, viewers got a fairly good idea about the way those per-person exemptions work. Bret Baier called on reporter Jim Angle to “break it all down:”
ANGLE (10/25/11): The centerpiece is a flat tax of 20 percent for corporations and individuals...Perry's plan to keep deductions for home mortgage interest, charitable contribution, and state and local taxes along with the $12,500 exemption per person make the tax less flat, but for those who might be thinking about leaping into an entirely new tax system, allowing a choice may be comforting.Let’s give Angle some credit. That last highlighted statement was clear and concise—and it was even accurate! A family of four earning 50K owes nothing under this plan!
That didn't stop the Obama campaign from launching an early attack arguing the Perry plan would, quote, "shift the greater share of taxes away from large corporations and the wealthiest on to the backs of the middle class." But with all the deductions, a family of four would have to make substantial more than $50,000 to face any federal income taxes.
Bruce Bartlett, the Last Word: Doggone it! Just when the viewer thought he understood, he might have switched over to the Last Word. Lawrence did mention those per-person exemptions. But look what Bruce Bartlett said!
O’DONNELL (10/25/11): This is a massive, massive tax cut for the very rich. It’s presented as “you have your choice which way you want to go.” But it’s clear at the top end of the income structure in this country, there’s only one way to go and that would be with his flat tax.Say what? According to Angle, a family of four earning 50K (or below) owes nothing under this plan. According to Bartlett, any such family is probably going to pay more under Perry’s plan than they do now—perhaps even “massively” more!
BARTLETT: Well, it’s worse than that because it’s a massive tax increase for a very large portion of the American population. I don’t know the exact figures, but I would guess probably any family making less than $50,000 a year or so is probably going to pay more under Perry’s plan than they do now.
We’re not even saying that’s wrong. But by now, a cable viewer might well have been confused.
O’Donnell’s reaction to this dramatic claim? He simply moved ahead to his next preplanned topic.
Austan Goolsbee, OutFront: The former Obama aide guested on CNN’s brand new OutFront, one of cable’s most horrific “news” programs. Erin Burnett is about as dumb as it ever gets on cable—and she plainly tilts the news toward the plutocrat world-view. Besides that, she is constantly scrunching up her face in one of her trademark “I’m the cutest puppy you ever saw” looks. And unless we’re mistaken, she and her producers are trying to steal a bunch of highly annoying Maddow shtick.
Burnett was horrible all night long. But look what Goolsbee said:
BURNETT (10/25/11): Austan Goolsbee, does it surprise you that 47 percent of Americans have a positive view of a flat tax?Is that accurate? Under the Perry proposal, would 90 percent of people’s taxes go up? Burnett didn’t ask.
GOOLSBEE: No, not especially because I think in these polls, they are confusing radical simplification with reducing the top marginal rates. Most polls—and we've known this for 20 years. We're kind of “back to the future” on this stuff. When you actually show that the top 1 percent of people get a gigantic tax cut and 90 percent of people’s taxes go up, suddenly the support for the flat tax goes way down.
Tom Foreman, Anderson Cooper 360: We rarely look to Cooper for clarification. He’s too busy furrowing his brow so viewers will know he cares.
Last night, things were different. Cooper threw to Tom Foreman, asking him to explain the tax plan. Foreman played tape of Perry saying this: “Taxes will be cut across all income groups in America.” Foreman took things from there, stressing the current lack of clarity about some ways this plan would work:
FOREMAN (10/25/11): That's a big, big claim, Anderson. Let's look at some of the facts here.Foreman seemed to say that programs like the EITC may be terminated under the Perry plan. That may explain a point of confusion in today’s New York Times news report.
Certainly under his plan it looks like there would be lower taxes for wealthier people. There's be lower corporate tax rates for companies, no tax on dividends or capital gains, no inheritance tax. Those are things that generally tend to favor people who have a lot of money. They're the ones who benefit from those sorts of things.
But what about everybody else? Well, that's a different matter. He's talking about a $12,500 exemption before you pay taxes. That's higher than what we currently have. So you can argue that's better for people at the lower end of the spectrum. If you have two parents and one child, for example, they easily go over $36,000 before they start paying an income tax of any sort.
But then he's talking about a 20 percent flat rate over that. So the problem here— When I say “the part we don't know,” Anderson, is— For all of the 95 percent we know here, the 5 percent could have tremendous details and that could make a big difference.
What kind of breaks do people lose at the lower end of the scale? Things like the earned income tax credit. Do they still get credit for that in the long run? There are many, many, many details left in this, Anderson. So the bottom line is, when we judge this one, we have to say this is really a case of it being at best true but incomplete.
In this puzzling, unexplained graphic, the Times shows many households paying no tax under the Perry plan. But it shows them better off under current law, in which they actually get money back from the IRS! In the graphic, the Times makes no attempt to explain how this works, a typical move from the Times. Richard Oppel makes a fleeting, unhelpful reference in his news report. But then, what else is new?
It’s always murky in the Times. On cable TV, we’re in the wild west. Do you understand how this tax plan would work?
We’ll take a guess: No. You do not.
Coming later today: Rick and the birthers (and Sherr)