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DESPERATELY SEEKING DATA (PART 3)! Is the tax code already flat? HOWLER readers are highly kerflubbled:


PUZZLED IN PADUCAH: Let’s review. A startling chart in the New York Times seemed to contradict our most basic conceptions (see THE DAILY HOWLER, 1/28/03). It seemed to show that all groups pay roughly the same percentage of their income in taxes if you count all taxes—federal, state and local. According to the chart, the top fifth of earners—average income, $117,000—pay 19 percent of their income in taxes. The bottom fifth—average income, $8000—pay one percent less. In Slate, Tim Noah expressed his surprise: “Tax rates are already flat!”

But then, the text of the NYT’s article seemed to say something quite different. Over the course of a lifetime, Daniel Altman said, low earners end up making money—32 cents for each dollar earned—when you count government entitlements as well as taxes. But here’s what Altman said about people in the middle and at the top:

ALTMAN: For a couple who earn the minimum wage, Professor Kotlikoff calculated a lifetime negative tax rate, or subsidy, of 32 percent. The rate becomes positive quickly, though, rising to a tax of 30 percent for couples earning just three times the minimum wage. For the families with the highest incomes, the tax rate reaches about 50 percent.

Huh? Altman’s chart had seemed to say that everyone pays 19 percent or less. But his text seemed to say something different. It seemed to say that middle earners pay 30 percent in the course of their lifetimes, and upper earners pay around 50! Here at THE HOWLER, we were kerflubbled. And just as predicted yesterday, you readers were kerflubbled here too.

Trust us, readers, it did get ugly when you tried to explain this conundrum. Is it true—are tax rates “already flat?” If middle earners are paying 30 percent, we’d have to say no—they are not. But like us, none of you seemed to be real clear about the way this Altman piece worked. Altman’s chart seemed to say one thing. But his text seemed to say something different. (For the record, Kotlikof’s synopsis says this: “Our fiscal system is highly progressive.” Compare that to the Altman chart, or to the conclusion Tim Noah drew from it.)

But then, that’s just how it goes! That’s how it goes when a citizen wants to learn even the simplest facts about our tax system. We’re confronted with spin on this topic each day—from spinners who often shed big tears at the way that high earners get taxed. But try to learn some basic facts and you probably won’t know who to turn to. Basic facts are hard to find, and—as the Altman piece help show—writing on this subject is often confusing or incoherent. We’re sure that Altman knows his stuff. But we can’t explain his piece in the Times, and our readers can’t explain the piece either.

How hard is it to get basic facts? Consider again that familiar spin we saw Sean Hannity spinning:

HANNITY (1/8/03): If Democrats say tax cuts for the rich, which is the mantra—if they say that all the time, don’t we have to define what the terms are? Let me put up on the screen and hopefully you can see it there. If not, I’ll read it to you. According to it, the top one percent pays 37 percent of the taxes; top five, 56; top ten percent, 67.3 percent of the taxes; bottom 50 only paid 3.9.

Spin like this occurs every day. But where do you go to find real facts? Is it true that “the top one percent pays 37 percent of [federal] taxes?” And where would you go to look that up? We’ll guess that you can’t tell us. And if you know how much the one percent pay, where would you go to find out what they earn? Spin on these topics surrounds us daily. But the facts are quite hard to come by.

Our public discourse runs on spin. But where do you go to get basic facts? Tomorrow—and yes, we’re one day late—we desperately seek Robert McIntyre.

SCHOOL SHOPPING: We don’t want to flog that UT “affirmative access” plan, but a bit of reporting in the Detroit News helps show off the plan’s striking downside. The News has been the go-to paper for information about affirmative action at UM; last Friday, Jodi Cohen took a look at “affirmative access” in Texas. Do minority kids sometimes stay in low-achieving schools to help their chances of attending UT? The Cohen piece goes beyond that; according to Cohen, various kids shop for low-wattage schools so they can get in the top ten percent:

COHEN: At first glance, the 10 percent plan looks simple: Students at the top of their class have an automatic pick of any public state college or university.

But conversations with Texas high school seniors reveal the law’s complexities.

For Joey Delgado, a student in an affluent, academically competitive high school, the law is unfair.

Despite getting almost all As in Advanced Placement courses and a 1360 on the SAT, it still wasn’t good enough. To get in the top 10 percent at Westlake High School, students not only have to get perfect grades, but get those grades in the toughest classes.

Ninety-five percent of Westlake seniors go to college, and the average SAT score is between 1180 and 1195. Competition is so tough that students not in the top 10 have transferred to a less-competitive school so they will rise to the top of their new class.

For Mariana Espinoza, a senior at Highlands High School in San Antonio, 80 miles and a world away from Westlake, the 10 percent law is an oasis for a poor, predominantly Hispanic community. After four years of hard work, Espinoza is 10th in her class, got an 1130 on the SAT, and is guaranteed a spot at the University of Texas.

While academic competition is low compared to Westlake—less than one-third of graduates attend a four-year college—Espinoza says she’s worked hard to become the first from her family to attend college.

There’s no perfect way to do college admissions. But the contradictions described in this passage are built into the “affirmative access” system. At UM, kids get extra points for attending tough schools; at UT, they have an incentive to avoid them. Again—can you see why UM would want to avoid this particular type of “race neutral” plan? And can you see how cheesy it was for Bush to trash UM’s leaders for avoiding this “solution?”

If you’re interested, Cohen penned two related stories last Friday. In one, she profiled four Texas high school students who are trying to get in UT. In the other, she recorded the views of UM officials about “affirmative access.”

The Daily update

NUANCED LISTENING: Fever has swept the HOWLER camp, and our entire staff has to be ready for the “Funniest Celebrity in Washington” contest tonight. (No, of course we’re not a contestant. Early favorite? Tom Daschle? Robert George?) For these reasons, we can’t excerpt Terry Gross’ interview with Joseph Cirincione, which we heard on yesterday’s Fresh Air. (Cirincione is director of the Non-Proliferation Project of the Carnegie Endowment for International Peace.) We thought the discussion was far more nuanced than most of the ham-handed work on Iraq. We’ll try to offer excerpts tomorrow; in the meantime, audio is available at the Fresh Air site. You know what to do—just click here. This program is well worth reviewing.