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Thursday, July 16, 2009
CNS Distorts Proposed Health-Care Tax
Topic: has been increasingly distorting a proposed tax surcharge for high-income earners to pay for health care reform.

A July 11 article by editor Terry Jeffery screamed in its headline, "House Democrats Will Seek Massive $540 Billion Tax Increase." Jeffrey did note (though not until the fourth paragraph) that the figure in question is over 10 years; he later quoted the AP and the Washington Post on the income breakdown of the surcharge but failed to clarify that the tax would follow the marginal formula of the current tax system. As the New York Times described it:

The surtax, starting in 2011, would be calculated through a series of building blocks, beginning with a 1 percent tax on income exceeding $350,000 for couples and $280,000 for individuals. So a couple earning $500,000 would pay 1 percent of $150,000, or a tax of $1,500.

LaterCNS articles, however, has substituted explanations for scaremongering by focusing on the number:

A July 15 article by Adam Brickley and Fadia Galindo carries the headline, "Democrats' $540-Billion Tax Hike Will Force People Into Government-Run Health Care, Congressman Says." Brickley and Galindo reference "The Democrats’ proposed $540-billion tax hike to help pay for President Obama’s health care reform plan" but do not explain that the figure is over 10 years; they note the income breakdown but, like Jeffrey, fail to clarify that it's marginal.

Another July 15 article by Matt Cover -- which also references "Democrats' Planned $540-Billion Tax Hike" in its headline -- does the same thing. He then distorted reality by claiming that as of 2006, "nearly 68 percent of small business profits ($470 billion) were reported by people making over $200,000 a year, meaning that the majority of small business profits would be subject to the Democrats’ tax increases." That's false -- since the tax is marginal, only the amount over $280,000 (for an individual, $350,000 for a couple, under the proposed plan, as reported by Cover) would face the surcharge; income under that would not.

Posted by Terry K. at 9:31 AM EDT

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