There's no defending the CNBC team that conducted the Republican debate in Boulder Wednesday night. Many of their questions were biased and argumentative, and sometimes veered far afield from the economic topics that were to be the debate's focus.
But when it comes to one particular issue — a hotly-disputed question from CNBC's John Harwood to Marco Rubio on Rubio's tax plan — the critics are wrong.
Several voices on the Right have accused Harwood of lying about the Rubio proposal. "@JohnJHarwood blatantly lied about Rubio's tax plan," tweeted The Federalist's Sean Davis. "Harwood was caught outright lying in a loaded question to Sen. Marco Rubio," said Breitbart. "Harwood doubles down on lie to Rubio," said Newsbusters.
The critics contend Harwood lied when he said to Rubio that the Tax Foundation "scored your tax plan and concluded that you give nearly twice as much of a gain in after-tax income to the top 1 percent as to people in the middle of the income scale."
Rubio denied it. "You're wrong," he told Harwood. "In fact, the largest after-tax gain is for the people at the lower end of the tax spectrum under my plan. And there's a bunch of things my tax plan does to help them."
You can see the full exchange below, but that is the crux of the issue. "Harwood accused Rubio of offering a tax plan that was heavily tilted towards the rich," the Federalist's Sean Davis wrote. "When Rubio corrected him and said that no, lower-income taxpayers receive a higher percentage of the plan's benefits than rich taxpayers, Harwood repeatedly argued with him…Guess what? Harwood got his facts wrong. Very wrong. Embarrassingly wrong."
Actually, Harwood's assertion — that the Tax Foundation estimates that Rubio's tax plan would "give nearly twice as much of a gain in after-tax income to the top 1 percent as to the people in the middle of the income scale" — was correct. The data on which both question and answer were based, is this, from the Tax Foundation:
It appears both Harwood and Rubio were using figures from the dynamic side of the table. Under those estimates, Americans in the top 1 percent would see a 27.9 percent increase in their after-tax income. The middle income brackets would see much less: a 17.2 percent increase for the 30%-40% decile of income, a 15.7 percent increase for the 40%-50% decile, a 15.3 percent increase for the 50%-60% decile, a 15.0 percent increase for the 60%-70% decile. Combine those groups into a broad middle, and the average increase is 15.8 percent. Just include the groups smack in the middle, and the average is a bit lower.
So: an average increase of 15.8 percent for the middle versus an increase of 27.9 percent for the top. The only thing to quibble with is Harwood's assertion that 27.9 percent is "nearly twice" 15.8 percent. The critics don't accept that characterization, but it seems likely that for many people, it's close enough. Harwood could have avoided the problem by saying "much larger" instead of "nearly twice," but the question as he posed it was hardly a lie.
By the way, if one looks at the Tax Foundation's static estimates, Harwood's question is not only accurate but understated. For example, the after-tax income gain of the top 1 percent is more than six times that of the 50%-60% decile.
Part of the controversy might owe to the way Rubio quite skillfully changed the premise of the question. Harwood asked about the contrast between the highest income group and middle income groups. Rubio answered by comparing gains in the highest income group with the lowest income groups. And indeed, the Tax Foundation estimates that the very lowest decile would see a 55.9 percent increase in after-tax income, compared to the 27.9 percent for the top 1 percent. So Rubio was right when he said that "the largest after-tax gain is for the people at the lower end of the tax spectrum under my plan."
But of course, that is not what Harwood asked. It would have been interesting to see Rubio address his decision to structure the plan in a way that would benefit top and bottom most, while awarding relatively lower benefits to the middle. But that's not what happened.
Below is the entire exchange between Harwood and Rubio.
HARWOOD: Senator Rubio, 30 seconds to you. The Tax Foundation, which was alluded to earlier, scored your tax plan and concluded that you give nearly twice as much of a gain in after-tax income to the top 1 percent as to people in the middle of the income scale. Since you're the champion of Americans living paycheck-to- paycheck, don't you have that backward?
RUBIO: No, that's — you're wrong. In fact, the largest after-tax gains is for the people at the lower end of the tax spectrum under my plan. And there's a bunch of things my tax plan does to help them. Number one, you have people in this country that...
HARWOOD: The Tax Foundation — just to be clear, they said the...
RUBIO: ...you wrote a story on it, and you had to go back and correct it.
HARWOOD: No, I did not.
RUBIO: You did. No, you did.
HARWOOD: Senator, the Tax Foundation said after-tax income for the top 1 percent under your plan would go up 27.9 percent.
RUBIO: Well, you're talking about — yeah.
HARWOOD: And people in the middle of the income spectrum, about 15 percent.
RUBIO: Yeah, but that — because the math is, if you — 5 percent of a million is a lot more than 5 percent of a thousand. So yeah, someone who makes more money — numerically, it's gonna be higher. But the greatest gains, percentage-wise, for people, are gonna be at the lower end of our plan, and here's why: because in addition to a general personal exemption, we are increasing the per-child tax credit for working families.
We are lowering taxes on small business. You know, a lot of business activity in America is conducted like the guy that does my dry cleaning. He's an S corporation. He pays on his personal rate, and he is paying higher than the big dry-cleaning chain down the street, because he's paying at his personal rate.
Under my plan, no business, big or small, will pay more than 25 percent flat rate on their business income. That is a dramatic tax decrease for hard-working people who run their own businesses.
The other thing I'd like to make about our plan, one more point, it is the most pro growth tax plan that I can imagine because it doesn't tax investments at all. You know why? Because the more you tax something, the less of it you get. I want to be in — I want America to be the best in the world for people.
HARWOOD: Senator, thank you.