The New York Times editorial page crossed the line from spirited opinion journalism to outright activism by tweeting phone numbers of key senators and urging constituents to demand lawmakers oppose the Republican tax bill. Sadly, the publication’s activism has polluted its news coverage.
While the Republican plan is by no means perfect and can and should be improved in a number of ways, debate should at least be conducted with an intellectually honest presentation of basic facts.
The Times ran a front-page story on Thursday with the breathless headline, “G.O.P. Tax Plan Could Reshape Life in the U.S.” Though it was dubbed “analysis,” that doesn’t excuse this line, which was widely-cited on social media: “By 2027, people making $40,000 to $50,000 would pay a combined $5.3 billion more in taxes, while the group earning $1 million or more would get a $5.8 billion cut, according to the Joint Committee on Taxation and the Congressional Budget Office.” It isn’t merely misleading, but factually inaccurate. And it’s indicative of a lot of media coverage about the tax bill, so it’s worth exploring in more detail.
The first thing that stands out is the myopic focus on the year 2027, without any other context. The reason is that the plan makes major changes to the individual tax code that would undeniably reduce taxes in every income group through 2026. That’s the conclusion of the CBO and JCT. Even the Tax Policy Center, which Democrats love to cite, concluded of the version of the Senate bill that cleared committee, “We find the bill would reduce taxes on average for all income groups in both 2019 and 2025.”
The key issue is that the bill’s changes to individual taxes will go away in 2026. So, cumulatively, over the standard 10-year budget window, it’s clear that every income group would see a tax cut. It’s one thing to challenge Republicans for making the corporate tax cuts permanent and the middle-class tax cuts temporary. But to focus merely on the final year, without even mentioning the previous nine years of lower taxes, is misleading.
A more glaring factual error is the assertion that immediately follows the mention of 2027: “people making $40,000 to $50,000 would pay a combined $5.3 billion more in taxes.” Anybody who takes the time to click on the source cited will notice that the figure comes from a table titled, “Allocation of Changes in Net Federal Revenues and Spending Under the Tax Cuts and Jobs Act.” In plainer English, what this means is that it’s a measure of how the tax bill affects various income groups when tax changes are combined with spending changes, rather than by looking at tax changes alone.
The main issue is that the bill eliminates the penalties associated with the individual mandate. Because of this, the CBO assumes that fewer people would choose to purchase health insurance. That means the government will be paying fewer subsidies to insurance companies to help individuals purchase insurance. Some of those subsidies go to individuals earning $40,000 to $50,000, thus leading to a reduction in government spending for individuals in that group. So what the Times is doing is saying a person who chooses to go uninsured and thus does not claim subsidies toward the purchase of coverage is the same as a person who has to write a check to cover “more in taxes.” If the authors still wanted to argue that this is a distinction without a difference, at least explain to readers what the numbers represent.
A separate analysis done by the CBO and JCT that excludes the effects of eliminating the individual mandate penalties, found that the $5.3 billion number cited by the Times would actually be about $5 billion lower, or $287 million, in 2027. That compares to the $24.3 billion in tax cuts (+/- any other spending changes) that the same income group would receive in four other years of the tax bill. (The JCT did not offer income group data for every year over the next decade, only for the years 2019, 2021, 2023, 2025, and 2027). So basically, the totality of the data the Times had access to showed that in the five years analyzed by the JCT, individuals earning $40,000 to $50,000 would be cumulatively $24 billion better off under the Senate tax bill. What the Times decided to do was focus on one year and ignore the other four while not accurately explaining what the $5.3 billion actually represented. The resulting $287 million, spread over the 14.4 million filers the JCT figures to be in the income range singled out by the Times, would amount to an average of about $20 per filer. Those with higher incomes would still benefit once the individual tax cuts expire because they benefit more directly from changes to the business side.
As said at the outset, the tax bill shouldn’t be immune from criticism. Republicans have pursued a strategy of making the corporate tax rates permanent and the individual tax cuts temporary to help make the math add up. Their assumption is that come 2027, it’s more likely that even Democrats would extend the middle-class tax relief (as Barack Obama agreed to do after his re-election), whereas they would have no hesitation about letting corporate rates jack back up. But individuals also benefit from certainty in the tax code, and there’s a strong case to make for making all changes permanent.
It’s also undoubtable that while income groups in aggregate will see their taxes fall for nine of 10 years, there will be individuals who will see their taxes go up under this bill — particularly those who live in states with high taxes who tend to take advantage of a lot of itemized deductions that are being eliminated. There are arguments that can be made about maybe providing less relief on the upper tax brackets so that lawmakers can plug up some of the holes that could lead to tax increases on others with relatively lower incomes. In the case of Sens. Mike Lee and Marco Rubio, they have argued for making the corporate tax cut slightly less generous to further expand the child tax credit.
The point is, there are many things to debate in this legislation. Liberals are free to argue that any tax reform should be revenue neutral, or that eliminating the individual mandate is an abomination. Conservatives could argue for steeper tax cuts coupled with real spending reductions. But any argument should at least be taking place within a universe in which the basic facts of what the bill does are presented accurately.