Posted on 06/09/2006 9:09:17 AM PDT by Cyropaedia
Facts? Who Needs Em? On the Washington Post op-ed page, facts are irrelevant by Alex Koppelman in New York, New York USA
Most people probably know that the op-ed pages arent exactly untarnished beacons of truth-telling. Thats a given. Still, youd hope that editors would ask their op-ed writers to at least try not to lie.
At the Washington Posts op-ed section Monday, that was apparently too much to ask.
Key to the page were dueling pieces debating a proposed repeal of the estate tax. This kind of setup, altogether similar to he-said, she-said news reporting, isnt uncommon. Theres little wrong with the idea, per se, except perhaps for the futility of the exercise here, readers: two totally opposing views; now, decide which one is right! But the enterprise depends on the truthfulness of both writers. On that scale the Post, and op-ed contributor Sen. Jeff Sessions (R-AL), failed miserably.
Up against regular Post columnist Sebastian Mallaby, Sessions pulled up a familiar argument: the estate tax he refers to it as a death tax will hurt small businesses and family farms. Indeed, Sessions says, The death tax hits hardest at heirs of small-business owners and family farmers. In many cases, the heirs cannot afford to pay the tax and are forced to downsize, lay off employees or even sell their business or farm.
Wonderful that hed be so compassionate to small-business owners and family farmers; horrible that hed lie, and reprehensible that the Post, fully aware of his lie, would let him get away with it.
See, what Sessions said the death tax hits hardest at heirs of small-business owners and family farmers well, its just not true. According to whom, you might ask?
How about the Washington Posts editorial page
This assertion, the Posts editorial writers concluded in a July 2005 editorial entitled Estate Tax Myths, is more convenient myth than fact A new study by the Congressional Budget Office examined estate tax returns filed by farmers and owners of small businesses in 1999 and 2000. The numbers that owed estate tax, the CBO found, were paltry, and the number without enough cash on hand to pay the bill even punier: In 2000, for example, just 1,659 farm estates had taxes due, of which 138 didn't report enough liquid assets to cover their tax liability.
But at that time the amount of money that could be passed on to heirs free of taxes was just half what it is now. With the current exemption level of $1.5 million, the CBO analysis found, only 300 farm estates in 2000 would have owed any tax at all and of those, just 27 would have a tax bill in excess of their liquid assets. At the even more generous exemption scheduled to take effect in 2009, $3.5 million, the ranks of those potentially hit hard by the tax would have dwindled even further; 65 farm estates would owe taxes and 13 would not have enough cash to cover the bill. (The CBO report can be found here. A similar report from Factcheck.org notes that The Tax Policy Center projects that roughly 440 taxable estates were primarily made up of farm and business assets in 2004. And even considering estates for which farming or business was a sideline, the Center found only 7,090 taxable estates for 2004 that included any farm or business income. That's still just 38 percent of all taxable estates. The fact is that repealing the estate tax entirely... would benefit mostly non-farmers and non-business-owners.)
And heres the best part: the Posts editorial page didnt just explode the myths it allowed Sessions to publish unchallenged not even a year later it got preachy about it, chiding anyone who would stoop so low as to, well, do exactly what it did ten months later.
The image of the grieving heir packing up his hoe as he trudges away from the family farm is just that, the editorial said, a powerful image but not an accurate one. Over the years, the discussion of the estate tax hasn't exactly been noted for its intellectual rigor. But members of Congress debating the issue now ought to look at the facts assembled by the CBO not the misinformation peddled by those maneuvering to make repeal permanent.
But Sessions was hardly done obfuscating. The Post allowed at least three more falsehoods to slip by.
First among Sessions list of reasons for abolishing the tax was that this tax punishes thrift and saving. In a philosophical sense, perhaps, hes correct. In an economic sense, hes not. That was the conclusion of a 2000 report by the Congressional Research Service, which said that, Given the paucity of empirical evidence on the issue [and] the evidence on savings responses in general it appears difficult to argue for repeal of the estate tax to increase private saving. Even if the responsiveness to the estate and gift tax is as large as the largest empirical estimates of interest elasticities, the effect on savings and output would be negligible and more than offset by public dissaving. Indeed, if the only objective were increased savings, it would probably be more effective to simply keep the estate and gift tax and use the proceeds to reduce the national debt.
Then Sessions turned to that old siren call of estate tax opponents double taxation.
Most of the assets taxed at death have already been taxed throughout an individual's lifetime, Sessions said.
Again, not true. The aforementioned Factcheck.org report notes that,It is true that some portion of a taxable estate might be made up of cash that was taxed before, when it was earned as income. But many estates are made up of stocks, bonds, real estate or other holdings that have appreciated greatly in value over the lifetime of the person who owned them. The owner didn't pay taxes on that profit during his or her lifetime because they weren't sold and the profits weren't turned into cash, or realized. Furthermore, heirs who inherit such appreciated assets won't have to pay tax on that unrealized profit either. The estate tax is the only tax that applies to such unrealized capital gains. Unrealized capital gains made up 36.3 percent of the value of all estates in 1998. That would make the double tax claim 63.7 percent true, and just over one-third false. For very large estates it is mostly false. Estates worth more than $10 million were 56.4 percent made up of unrealized, untaxed capital gains. (Remember, too, that as the liberal think-tank Center on Budget and Policy Priorities observed, 99 percent of estates cannot face double taxation under the estate tax for the simple reason that they owe no estate tax. The Factcheck.org statistic, it should be noted, counts all estates, not just those subject to the tax.)
Lastly, Sessions raises the issue of charitable giving. Proponents of the estate tax often argue that because charitable giving is one way to reduce estate tax burden, repeal of the tax would reduce donations. Not so, Sessions argues even though the phasing out of the death tax began in 2001, he says, charitable contributions in the United States reached a record high in 2004.
That may be true, but its ultimately meaningless. That number wasnt in real dollars that is, it wasnt adjusted for inflation, so preceding years will always be smaller, as the dollar is worth less each year and it came after the recession caused a few down years for donations. That 2004 was a record year, then, wasnt cause for celebration; anything else would have been a disappointment. Besides, those claiming that the repeal would hurt donations arent just partisans: the Posts old source, the CBO, reported in the supposed banner year of 2004 that permanently repealing the estate tax would cause a decline in charitable giving of 6 percent to 12 percent.
And yet in the face of all this, the Post allowed Sessions column to run. Sure, theres an argument that they didnt exactly allow it to run unchallenged, given Mallabys opposing column, but thats not the point. No newspaper should allow an op-ed contributor to baldly lie and hope that readers will be able to figure it out because of a dueling article. Opposing viewpoints are fine, but they depend, as does all journalism, on the truth.
And Now For More of the Same
Sen. Sessions article wasnt the only truth-challenged piece to appear on the Posts op-ed page Monday. There was also the White House press release.
Well, okay, it wasnt really a press release but it might as well have been. Peter Wehner, the director of Karl Roves in-house politics shop, the Office of Strategic Initiatives, penned And Now For Some Good News, a column devoted to telling Post readers just how good President Bush has made the country despite what that evil media might have told you, of course. And heck, it does read like a press release, hitting exactly the same economic points as one the administration put out on June 2.
That the Post allowed what is essentially a press release to run on their pages is bad enough; then they allowed the writer to lie. Wehners column is filled with distortions, omissions and outright lies.
Lets start with the lies.
As part of his list of reasons why we should all think the economy is doing well, Wehner says, Tax revenues are at an all-time high. That claim is so easily debunked as to be laughable; indeed, its not even what the rest of the administration is asserting. Rather, according to the Treasury Department, tax revenues for April 2006 were the second-highest of all-time. And even that number is suspect. Remember that whole real dollars issue?
Well, using an inflation calculator to adjust tax revenue numbers into real dollars, we find that April 2006 wasnt the second-highest. This April's revenues were $3.15 trillion, supposedly second only to April 2001's $3.31 trillion (which in real dollars works out to $3.77 trillion). Then there's April 2000, which at $2.95 trillion works out to $3.45 trillion in real dollars, and April 1999, which at $2.66 trillion works out to $3.21 trillion, and April 1998, which at $2.61 trillion works out to $3.22 trillion.
Then there are the omissions.
The American economy has added more than 5.3 million jobs since the summer of 2003, Wehner wrote. True enough, but not as impressive as Wehner wants it to sound. See, those jobs arent created in a vacuum: every month, new people enter the work force, and they need new jobs. 150,000 people, to be exact. Now, Wehner doesnt say when in the summer of 2003 hes counting from, but that June 2 press release does August. Thats 33 months. 150,000 times 33 gets you 4,950,000, meaning that an honest writer would tell you that in actuality only 350,000 truly new jobs have been created.
Wehner went after social indicators as well. He did no better there, noting that property crimes are near the lowest levels in the history of the federal survey without mentioning that property crime rates have, after a long decline, been stable over the past half-decade and trumpeting a lower teen birth rate without mentioning the countrys skyrocketing STD rate.
Truth? On the Posts editorial page, we dont need no stinking truth.
Alex Koppelman, Dragonfire's media critic, writes every Tuesday and Thursday. Want to tell Alex what you think? Give him a shout via Email at alex@dfire.org. He's also available to chat at AIM: dfireMedia.
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An organization supporting the abolition of this law is running ads of dueling Senators in Arkansas. Senator Lincoln voted for the repeal; Senator Pryor voted against it.
Last trip there I asked one owner how he came by such marvelous items.
His reply: "Estate tax. Over half of these items are sold to settle the taxes left on estates. And half of those estates were also forced to sell the houses and lands to pay the tax bill."
The very idea that there is, in effect, a "tax when you die" is as Un-American as any tax could possibly be. The argument shouldn't be about what constitutes a fair exemption to the death tax, it should be whether or not the estate tax should even exist!
It's only purpose is to redistribute wealth, something clearly (or it should be clear) anti-American. The only reason it's not a 100% tax is because there'd be a revolt in the streets, not because the authors and maintainers the law would be opposed to such an idea.
The author misses the point. The Death Tax hits "the harderst" those who can't pay it and have to sell off the businesses. He ASSUMES, as did the Post that "the hardest" means "the highest tax". Which is stupid, because as the Post noted, those with the highest tax usually have plenty of money to pay the taxes, or had enough money to hide it so they didn't have to pay.
The hardest hit people are those who suffer the most, but unfortunately for the left those people are all over the spectrum in how much money is involved, so there is no way to craft a law to protect them but not others.
I notice NOBODY seems to want to argue about why the government should get a DIME of money just because the person who earned it (and paid taxes on it) has died. Why should government be an automatic heir to every estate?
All they talk about is how the people can "afford" the tax, as if the purpose of government is to tax every citizen as much as is possible.
He also was wrong about his statement about session's "second lie", because Session's didn't say that abolishing the tax would "increase savings", he said it "punished savings". It does, because people who spend all their money in their own lifetimes pay no additional tax, but people who save it get taxed at their death.
On his third point, I think we SHOULD have a discussion about this passing on capital items at a new cost basis, so they never get taxed. That is a trick used by the rich. If we are going to require taxes on capital gains, then on death the heirs should have two choices -- have the estate pay the cap gains tax at the estate's rate, and then pass the assets to the heirs at the new cost basis, or have the heirs inherit without tax but at the original cost basis, so if sold they have to pay the cap gains.
I don't like that you can donate items and write off the full value but not pay cap gains on the difference. Rich people use that all the time with scams like the Painting scam -- where they buy lots of paintings by an artist cheap, then ONE painting by the artist runs through an "auction" where it gets bid up to hugely overinflated value, and one of the rich people pays that.
In exchange, every rich person who owns a painting by that artist can now donate the painting to a museum and write off the new "fair market value" of their painting at a price far above what they paid. Even the guy who had to pay for the one painting probably makes out like a bandit on all the others he bought cheap.
I wouldn't put too much credence in Factcheck.org.
This creature of the Annenberg Center (TV Guide money) is staffed with researchers most of whom would feel at home in the DNC.
They were consistently wrong , evasive, or misleading in the 2004 campaign.
I'd suggest this skeptical writer ask Warren Buffet, and see if he can get a straight answer out of him. :^)
Absolutely -- this makes more sense than any of the other arguments.
Carolyn
Interesting that this Champion of Truth for the Masses doesn't bother to mention the fact that there also are those who LEAVE the work force, through retirement, death or becoming a ward of the state that this fool would apparently have take care of everyone.
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