Dec
04
2012

CBS, Cliff Jumping and Your Family's Tax Burden

The inability of major media to accurately discuss the "fiscal cliff" continues on a nearly daily basis. 

CBS Evening Newson Sunday (12/2/12) saw this report by reporter Anna Werner:

CBS reporter Anna Werner

CBS's Anna Werner

WERNER: If nothing is done and the gridlock continues, about $110 billion in spending cuts and a $500 billion tax increase will automatically start to take effect in 2013. And the Tax Policy Center estimates the average American household would ring in the New Year owing about $3,500 more on their taxes. Republican Senator Lindsey Graham says it's a possibility–

SEN. LINDSEY GRAHAM: I think we're going over the cliff. It's pretty clear to me they have made a political calculation.

WERNER: –blaming Democrats for not doing enough to meet Republicans halfway.

The Republican complaint about not getting what they want is what you expect to hear. But the notion, coming from  Werner, that come January 1 an average family will be stuck with a bill for $3,500 is misleading–a deception in some sense borrowed from the faulty "cliff" analogy in the first place.

Most people know that this is not the way taxes work–you don't pay the new year's tax bill on the first day of the year. Those total figures reflect the tax increases that would roll out gradually over the course of the 2013 calendar year–if the White House and Congress never come up with a workable plan to avoid  hefty tax increases and spending cuts that could cause another recession. 

 As a New York Times reported a couple months ago (10/10/12), "Policy and economic analysts projecting its complicated and wide-ranging potential impact said the term 'fiscal hill' or 'fiscal slope' might be more apt: The effect would be powerful but gradual, and in some cases reversible."

The piece added:

The Treasury Department has significant discretion over whether to adjust the withholding tax tables, meaning it could choose to keep last year's rates and avert much of the blow from the tax increases. Policy makers could also apply lower tax rates retroactively: If the Bush-era tax cuts expired for all households in January, they could be reapplied in February.

That's reality– and it bears little resemblance to a "cliff." 

About Peter Hart

Activism Director and and Co-producer of CounterSpinPeter Hart is the activism director at FAIR. He writes for FAIR's magazine Extra! and is also a co-host and producer of FAIR's syndicated radio show CounterSpin. He is the author of The Oh Really? Factor: Unspinning Fox News Channel's Bill O'Reilly (Seven Stories Press, 2003). Hart has been interviewed by a number of media outlets, including NBC Nightly News, Fox News Channel's O'Reilly Factor, the Los Angeles Times, Newsday and the Associated Press. He has also appeared on Showtime and in the movie Outfoxed. Follow Peter on Twitter at @peterfhart.