During his State of the Union speech last night, President Obama said “We have subsidized oil companies for a century. That’s long enough. It’s time to end the taxpayer givaways to an industry that’s rarely been more profitable, and double down on a clean energy industry that’s never been more promising.”
The President was stretching the definition of the word “subsidize” beyond anything reasonable here. Perhaps it wasn’t quite a lie, but it was a very creative use of the word.
As regular readers have probably noticed, I’m disgusted with this whole media-fabricated “scandal” over Mitt Romney’s taxes. During Monday night’s debate Romney said that the overall effective income tax rate he’d paid for 2010 was around 15%. (His tax rate is much lower today than it was back in his Bain Capital days, because most of his recent income comes from capital gains on investments, which are typically taxed at 15%.) The media quickly erupted with stories claiming, falsely, that this effective tax rate is lower than the rate paid by most middle class workers.
The media treatment of this so-called issue is false in two ways. First, as I pointed out in my last two posts, the tax system in this country is actually steeply progressive. Media claims that “most middle class workers” pay higher effective income tax rates than Romney are just plain lies.
In yesterday’s post I took on the media claim that Mitt Romney’s self-reported effective income tax rate of 15% is higher than what most middle class people pay. I showed how most of the people in the bottom half of the income scale actually get a reverse tax paid to them by the IRS, instead of paying a tax to the IRS as Romney does.
The media is spreading all kinds of disinformation about the tax system, in order to drum up economic envy and resentment against Presidential candidate Mitt Romney. During Monday night’s debate, Romney said that he thought his “effective” federal tax rate was somewhere around 15%. The word “effective” is important here, because it’s the word various journalists have chosen to ignore.