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.