ABOUT THAT DOUTHAT COLUMN…. The New York Times‘ Ross Douthat, in a column about taxes, makes a claim today that’s intended to be startling.
Today, for instance, a family of four making the median income — $94,900 — pays 15 percent in federal taxes. By 2035, under the C.B.O. projection, payroll and income taxes would claim 25 percent of that family’s paycheck. The marginal tax rate on labor income would rise from 29 percent to 38 percent. Federal tax revenue, which has averaged 18 percent of G.D.P. since World War II, would hit 23 percent by the 2030s and climb even higher after that.
Such unprecedented levels of taxation would throw up hurdles to entrepreneurship, family formation and upward mobility. (Or as the C.B.O. puts it, in its understated way, they would “tend to discourage some economic activity,” and “harm the economy through the impact on people’s decisions about how much to work and save.”)
That sounds pretty dramatic, doesn’t it? It might even be an important observation if it were painting an accurate picture.
But it’s not, and I’m amazed NYT editors let the column slide. For one thing, Daniel Gross explained, “For all households in the U.S., the median income in 2009 was $49,777. For married households it was $71,830. That’s higher, but nowhere near $94,000.”
For another, Douthat’s claim that the household making the median income pays 15% in federal taxes is deeply misleading.
Perhaps most strikingly, what Douthat describes as “unprecedented” is really just tax burdens consistent with where we were in the 1980s.
Gross concluded, “Look. Taxes are complicated. I know Douthat is a single guy who has an income substantially higher than $94,000. So perhaps we shouldn’t expect him to be familiar with the basics of median family income and how the tax code works. But if you want to write about these topics and be taken seriously, you have to get at least some of the numbers right.”
That seems like wise advice.