The general line in corporate media coverage of the so-called "Supercommittee" tasked with coming up with a long-term budget plan is that both sides aren't willing to budge: Republicans won't agree to raise taxes, and Democrats want to protect "entitlements" like Social Security and Medicare.

While some might find the idea of Democrats standing up for Social Security and Medicare, it's not really true--Democrats have offered to make such cuts if there are some tax increases to go along with them. This insistence that a compromise involve a compromise has been depicted, oddly enough, as a refusal to compromise.

But things got slightly more confusing when it was reported that the Republicans had broken their anti-tax stance, and were putting a $300 billion revenue increase on the table. In the Washington Post, Lori Montgomery's piece led with this:

Congressional Republicans have for the first time retreated from their hardline stance against new taxes, offering to raise federal tax collections by nearly $300 billion over the next decade as part of a plan to tame the national debt.

That is big news. In the New York Times (11/9/11):

Republicans, long opposed to tax increases, said Tuesday that they might allow $250 billion to $300 billion of additional tax revenue as part of a deal to shave $1.2 trillion from federal deficits over the next 10 years.

One slight problem: The GOP tax increase is, it turns out, a massive tax cut for wealthy Americans. As Steve Benen noticed (Political Animal, 11/9/11):

Way down in the same article, in the 16th paragraph, the piece gets around to mentioning that Republican want to trade nearly $300 billion in new revenue for "permanently extending the George W. Bush-era tax cuts past their 2012 expiration date, a move that would increase deficits by about $4 trillion over the next decade."

That's the kind of detail that more or less debunks the article’s headline and lede. Think about it: as part of a debt-reduction deal, Republicans want to increase tax revenue by less than $300 billion and cut tax revenue by roughly $4 trillion.

This bit of trickery is still being misreported--in today's Post, for instance:

Some conservatives in the Republican House majority said they could not support the latest GOP offer to raise taxes by as much as $300 billion over the next decade as part of a broader deal to cut spending. The offer marked the first time Republicans other than Boehner have proposed raising taxes above current levels.

Readers had to keep reading several paragraphs to learn that this tax increase is actually part of a massive tax cut--bringing the top rate down to 28 percent.

Perhaps the most bizarre exchange on this topic came on Sunday's Meet the Press, where NBC host David Gregory insisted that his own reporting should be trusted over the word of Democratic Rep. Debbie Wasserman Schultz of Florida:

GREGORY: They did agree for tax increases that Democrats have not accepted this week. But I want to ask you about, specifically, about the debt.

SCHULTZ: Well, no, no, no.... Come on, David, that was not a serious proposal. What they proposed was, you know, reducing the number of itemized deductions in exchange for a passage, an extension of all the Bush tax cuts, which actually would've resulted in less revenue and brought the overall top tax rate down to 28 percent. So that was not a serious proposal. We need a serious proposal that balances the revenue the super committee generates and the cuts.

GREGORY: All right. Well, there was new revenue that was proposed, but I realize that's still a subject of debate. But let me, let me focus...

SCHULTZ: That would result in less revenue overall.

GREGORY: Let me--well, again, that's in dispute, according to my reporting on that.

It would be of great value to the country--and to the GOP--if Gregory could explain what his investigation turned up.

Charles Krauthammer's  column today in the Washington Post ("Return of the Real Obama," 9/23/11) reveals the Barack Obama, who's apparently been hidden away for the past few years:

In a 2008 debate, Charlie Gibson asked Barack Obama about his support for raising capital-gains taxes, given the historical record of government losing net revenue as a result. Obama persevered: "Well, Charlie, what I’ve said is that I would look at raising the capital-gains tax for purposes of fairness."

A most revealing window into our president's political core: To impose a tax that actually impoverishes our communal bank account (the U.S. Treasury) is ridiculous. It is nothing but punitive. It benefits no one--not the rich, not the poor, not the government. For Obama, however, it brings fairness, which is priceless.

That was, indeed, a memorable moment--but not in the way that Krauthammer thinks. The real problem was that the question Charles Gibson asked was premised on a falsehood. As  FAIR pointed out at the time, Gibson was

pressing Obama about his plan to raise capital gains tax rates to levels of the early 1990s--a position that struck Gibson as bizarre, since lowering these taxes increases government revenue:

In each instance, when the rate dropped, revenues from the tax increased. The government took in more money. And in the 1980s, when the tax was increased to 28 percent, the revenues went down. So why raise it at all, especially given the fact that 100 million people in this country own stock and would be affected?

This question rests on two false assumptions. The capital gains tax is paid by a small percentage of the population. As Citizens for Tax Justice pointed out (3/16/06), "The wealthiest 10 percent of taxpayers enjoyed 90 percent of the capital gains eligible for this special tax break." Gibson's reference to the 100 million Americans who own stock is irrelevant, since this tax is applied to the sales of stocks and real estate--not the act of having a retirement account.

Gibson's other point--"History shows that when you drop the capital gains tax, the revenues go up"--might be popular in certain conservative circles, but the evidence to support it is thin. As the Center on Budget and Policy Priorities pointed out (7/12/07), there is little causal relationship between the capital gains tax cuts and increased federal tax revenue. Economist Jason Furman of the Brookings Institution pointed out the the "Joint Committee on Taxation and Treasury both score raising capital gains taxes as raising revenues" (New Republic, 4/16/08).

When a super-wealthy guy like Warren Buffett talks about taxing the rich-- in the pages of the New York Times, no less-- it gets the rest of the media talking. But that doesn't mean that talk will get things right.

Here's one example from ABC World News (8/15/11):

BIANNA GOLODRYGA (ABC NEWS): Much of Buffett's income comes from capital gains, profits resulting from investments, and they're taxed at only 15%. Buffett's solution, rates should be raised for the 300,000 Americans who make more than a million a year, left alone for everyone else. An additional 1% tax on the richest Americans is estimated to raise $100 billion in extra revenue during the next decade. But tax experts say it's not enough for just the super-rich to pay more.

MAYA MACGUINEAS (PRESIDENT OF THE COMMITTEE FOR A RESPONSIBLE FEDERAL BUDGET)

The bottom line is that the fiscal hole that we face is so large that everybody is going to have to be prepared to pay more in revenues in the end.

Nowhere does Buffett propose that his income tax rate should be increased one percentage point. In fact he talks about how his income tax rate is about half of what people who work in his office are paying. His column also talks about how the super-rich get a break on capital gains;  as Buffett sees it,  when the capital gains rate was 39.9 percent-- over twice what it is now-- it didn't stop people from investing.

So why is ABC low-balling his call to tax the wealthy? More realistic projections of how much can be gained by rolling back tax cuts for the wealthy tell a different story.   Chuck Marr at Center on Budget & Policy Priorities pointed out one way to raise a trillion dollars over 10 years:

Returning the average tax rate on the top 1 percent of taxpayers to its 1996 level of 29 percent could raise about $100 billion a year, or $1 trillion over the next decade.

Chuck Collins and Alison Goldberg note that

Almost 500 high-income taxpayers support the Fairness in Taxation Act, that would increase top tax rates on millionaires, generating an additional $78 billion in urgently needed revenue.

A New York Times story following up on Buffett's column pointed out that

his proposal would put a significant dent in the nation’s budget shortfall. Based on projections by the Joint Committee on Taxation, the Congressional Budget Office and the Treasury, the tax increase on all three fronts would generate as much as $500 billion in new revenue over the next decade — about a third of what the Congressional committee is supposed to cut from the deficit.

The ABC report does conclude by pointing out that this $100 billion figure could build 7,000 new elementary schools. But Buffett's actually proposing to raise far more money than that. Why is ABC trying to give the super-wealthy a break?

"2 Republicans Open Door to Increases in Revenue" reads a headline in Monday's New York Times. The suggestion is that a few Republicans are walking away  from the the party's no-tax-hike orthodoxy. That much is clear from John Broder's lead:

Two senior Republicans said Sunday that they might be open to raising new government revenue as part of a deal to resolve the dispute over the federal debt ceiling, but they warned that there was little time to enact a comprehensive deal.

This would be a pretty remarkable development. So who are we talking about? Broder reports:

One of the senators, John Cornyn of Texas, said he would consider eliminating some tax breaks and corporate subsidies in the context of changes in the tax code, provided there was not an overall increase in taxes.

That sounds like no shift at all-- Cornyn went on to rule out any tax increases.

But he insisted that any changes in taxes be “revenue neutral,” meaning that the government would not take in any more money from individuals or businesses than it does now.

OK-- he supports raising revenues, so long as there is no increase in, well, revenues. Is there a clearer example Broder is thinking about?

The other senator, John McCain of Arizona, said he would be willing to consider some “revenue raisers” as part of a broad deal, but he refused to name specific measures.

He was specific about one thing:

“The principle of not raising taxes is something that we campaigned on last November, and the result of the election was that the American people didn’t want their taxes raised and they wanted us to cut spending,” he said on the CNN program “State of the Union.”

This article provides the evidence to refute its premise, which I guess is helpful.

Wisconsin Rep. Paul Ryan (R.-Wisc.) is used to being celebrated by pundits for his "courageous," "bold," "serious" budget proposals (even though his numbers don't add up). Indeed, Ryan has become a genuine media darling.

So it must have been a little surprising to find himself being booed earlier this week, at a town hall meeting he hosted in his congressional district.

It happened after one attendee at the event, a constituent describing himself as a "life-long conservative" challenged GOP views on income disparity, taxes on the wealthy, and raising the income cap on Social Security taxes:

The middle class is disappearing right now. During this time of prosperity, the top 1 percent was taking about 10 percent of the total annual income, but yet today we are fighting to not let the tax breaks for the wealthy expire? And we're fighting to not raise the Social Security cap from $87,000? I think we're wrong.

The boos came a moment later when Ryan responded insisting, "We do tax that top."

The contrast between the easy ride Ryan's had from professional journalists and the way he was challenged by his constituents demonstrates (once again) the disconnect between pundits and the people they often claim to speak for. (As Think Progress reports, a recent Washington Post/ABC News poll "found that 72 percent of Americans wanted Congress to raise taxes on wealthy Americans making more than $250,000 per year.")

In the summer of 2009, the corporate media frequently covered town hall meetings where Democratic politicians were challenged, sometimes even shouted down, by opponents of the party's healthcare initiatives. So far Ryan's awkward town hall moment has created an online buzz, but besides a few mentions on MSNBC (e.g., 4/20/11, 4/22/11) and 0ne Chicago Tribune report, it's received scant corporate media attention.

There's a simple way of looking at the debate over the Bush tax cuts. The White House and most Democrats say they want to extend them for the vast majority of the population, but keep higher rates in place for families making over $250,000 a year. Republicans seem to know that "Keep Taxes Rates Low for the Rich!" isn't a winner, politically speaking. So they argue that these tax increases are really going to punish "small businesses."

There's ample evidence that this is mostly untrue--the number of "small businesses" that would affected is somewhere between 2 percent and 5 percent, depending on how you define the term. But some media outlets seem unwilling to render judgment on the GOP's talking point--see the New York Times today (9/13/10):

Many Senate Republicans have said that letting the Bush cuts expire for high earners amounts to raising taxes on small-business owners, some of whom fall into those rates because they report their business earnings as personal income.

Or last week (9/9/10):

Mr. Boehner got out ahead of Mr. Obama's speech. Appearing on ABC-TV's Good Morning America, he said that extending the top Bush tax rates would benefit small businesses; Democrats argue that few small businesses pay taxes at the top rates.

Journalism should tell us more than what politicians say about this or any other issue. How something will work in the real world is vastly more important than what John Boehner thinks, or what "Democrats argue" in response to what Boehner says. Oddly enough, you had to read a Times editorial on the same day (9/9/10) to get a meaningful sense of what was going on:

Mr. Boehner's much professed concern for small businesses is misdirection. The tax cuts that Mr. Obama would let expire would affect very few owners of small businesses--how many do you know who make more than $250,000 a year?--by any common-sense definition of that term.

How would the debate over tax cuts change if more reporters were willing to let reality intervene in this debate?

The New York Times' Jackie Calmes has a report today (4/15/10) about the brewing fight over the Bush tax cuts, which were passed for limited time period and will phase out if Congress does not pass legislation to extend them. The Obama White House will ask lawmakers to renew most of the tax cuts, but let those for wealthy taxpayers expire. This obviously does not sit well with Republicans, and they have a plan, which the Times describes in the third paragraph of the story:

For all of the talk from President Obama and his party of ending the Bush tax cuts, letting that happen could be harder for some Democratic lawmakers from Republican-leaning districts or states. Republicans already are reviving what has sometimes proven an effective, if disputed, argument in the past: that rich taxpayers include many small businesses whose owners pay income taxes as individuals.

So Republicans will say that small business will be hurt if the tax cuts expire as the law stipulates. This argument is "disputed." How, and by whom? Well, if you want to know that, you have to read all the way to the final two paragraphs of the article (emphasis added):

 Democrats express confidence that Republicans will not kill a bill that benefits most Americans. But some worry that Republicans could delay action by pressing the argument that it would increase taxes for small businesses, discomfiting Democrats with re-election troubles and requiring some Republican votes for a supermajority.

Already Democrats are countering that most small businesses would not be affected; government data show that 97 percent of individual tax returns with business income would not be hit by the top rates. But, some Democrats acknowledge, the Republicans’ argument has proven politically potent in the past.

So now, after reading to the very end of the article, we know the answer--that this GOP talking point is bogus. Why not put that at the top, where the claim about hurting small businesses actually appears?

The reason these arguments are "politically potent" might have something to do with the media's reticence to call them what they are.

Detroit Free Press columnist Mitch Albom--best known for his bestseller Tuesdays With Morrie--had a July 25 column that criticized the Obama healthcare reform with an argument that suggested an unfamiliarity with how the U.S. tax system works:

In explaining why it was OK to sock a new 5.4 percent tax on the highest earners in this country--to pay for healthcare reform--President Obama’s press secretary, Robert Gibbs, said this:

"The president believes that the richest 1 percent of this country has had a pretty good run of it for many, many, many years."

Ah. So that’s it. The old "You’ve had it good enough for long enough" policy. That’s why a family earning a million dollars a year should now cough up $54,000 of that--in addition to all the other taxes it pays--to cover healthcare for people who may not pay a penny of new tax themselves.

But a family making $1 million a year wouldn't pay an extra $54,000 in taxes from the proposed 5.4 percent surcharge--because that surcharge would only apply to income beyond the first million dollars of income. A smaller surcharge would kick in at $350,000, and increase at $500,000--but the total tax increase for a couple making $1 million would be $9,000, or one-sixth of what Albom claimed was a "grossly overweighted tax."

This is how taxes generally work, with marginal tax rates that apply to income over a certain level. You'd think that Albom, who has an MBA from Columbia University, would be familiar with the concept. But media outlets have been known to trip up on this subject, even when their stories are prepared in conjunction with tax experts (FAIR Action Alert, 9/22/08).

Albom's charge that the Obama administration is "engag[ing] in the worst and most destructive form of politics: class warfare" is also a familiar corporate media trope (Extra!, 1-2/01). Given that for the media, "class warfare" is almost always waged by the bottom against the top, it's perhaps not surprising that Albom has trouble figuring out what Gibbs means when he says that " the richest 1 percent of this country has had a pretty good run of it for many, many, many years." (Albom speculates that he's "suggest[ing] that the top 1 percent are a bunch of Bernie Madoffs, that they’ve been scheming their way to riches, evading the system, hiding their money in complicated offshore deals.")

Gibbs is presumably referring to data compiled by the Congressional Budget Office (CBPP, 4/17/09) showing that income for the top 1 percent has climbed by 256 percent from 1979 to 2006, while the take-home for middle-income households has grown by only 21 percent; for poor households, growth was just 11 percent. The share of all after-tax income that's gone to the top 1 percent has more than doubled since 1979, from 7.5 percent to 16.3 percent.  You might say they've had "a pretty good run."

Reading Wall Street Journal reporter Gary Fields' "point that a family making slightly over $250,000 doesn’t necessarily feel all that 'rich' when it comes to facing a tax hike from Barack Obama," Matthew Yglesias (Think Progress, 4/17/09) dubs his story "The Not-So-Compelling Plight of the Somewhat Rich" and notes that "what the story doesn't do is put this issue in the appropriate context of what an increase in the marginal rate really implies":

If you raise taxes on "people making over $250,000," that means an increase only in the 250,001st dollar and onward. It's not, in other words, as if a guy earning $249,999 and a guy earning $250,001 will be paying radically different amounts of taxes. In other words, though if you're earning $5 million a year, Obama's plan really will saddle you with a big tax increase, a person who's earning $260,000 and feels that he's facing a basically middle-class economic situation is only going to be facing a very small tax increase. And however much our $260,000 a year guy may feel not so rich, surely he can agree that $260,000 is a lot more than $130,000 or $65,000 so it's hardly absurd that he might pay a slightly higher rate.

After writing that, "even if you grant the premise of the story there's no actual problem here," Yglesias goes on to suggest ideas no career-minded corporate reporter would dare print:

That said, I wouldn't have a problem with launching a new, slightly higher rate, starting at $500,000 and a higher one starting at $1 million and another at $2 million another at $4 million another at $8 million and another at $16 million. I don’t see any reason to think that the progressivity of the scale should max out at $250,000 when obviously there's a huge difference between someone earning that much money and someone earning 10 times that amount.

While big media generally are terrified at the thought of such policies, a Gallup poll from this April 6-9 has 60 percent of respondents considering that "upper-income people" are "paying too little" federal taxes. (Fully 67 percent said the same of "Corporations.")

For more on corporate media having difficulty with the concept of marginal tax rates, see FAIR Action Alert: "CBS Cheats on Tax Coverage" (9/22/08).

The roundtable on Sunday's Meet the Press (2/1/09) sure didn't look promising: Republican flat tax enthusiast Steve Forbes, former McCain economic adviser Mark Zandi and CNBC reporter Erin Burnett. It was Burnett, though, who delivered a head-scratching defense of the $18 billion bonuses recently doled out at Wall Street firms (many of which are still standing thanks only to the government's multi-billion dollar TARP bailout).

As Burnett explained, the populist anger was misplaced (see bold):

BURNETT: I understand the outrage, and you understand the populism. There are, though--well, how should we say this? The taxpayer money is not being used to pay the bonuses. I think people could understand if you work for a company--right? If the three us worked for a company, your guests, and I lost $10 billion but Steve [Forbes] over there, he made a billion dollars. So overall the company actually loses money, but Steve went and did his very darndest for that company and he made money. So should he be paid for his work? That's essentially what we're talking about here. And reasonable people could argue about this, but many reasonable people would conclude, yes, he should be paid for that. And I think, David, you've raised a fair point, which is maybe it's the whole use of the word "bonus."

GREGORY: Mm-hmm.

BURNETT: If you explained to people this is how they are compensated, that might make a difference. But there is also a fundamental misunderstanding. The taxpayer money isn't being taken and paid out in the form of bonuses. It goes in a, a separate pool, shall we say, a separate account for banks. So maybe people don't care about that distinction, but it is there.

Really? That's just a "separate pool"  money? As Adam Green and Media Matters point out, that sure doesn't seem to be the case. The original New York Times report (1/29/09) and several others rounded up by Media Matters quote several experts making exactly the opposite point-- that without the bailout funds, bonuses would have been much lower.

This isn't the first time Burnett's raised some eyebrows; she once warned that critics of China should go easy, since safe food and lead-free toys are likely to cost more. And a Today show report she did cheering the soaring Dow and the lamenting the tax burden of the super-wealthy earned her an "attagirl" from Rush Limbaugh.