MediaWatch: April 1992

Reporters Take Cue from Left-Wing Class War Specialists

ALL FLAT ON THE FLAT TAX

Democratic presidential candidate Jerry Brown's surprise win in the March 24 Connecticut primary led the networks to examine the only conservative policy he espouses: replacing virtually all current federal taxes with a flat income tax and Value Added Tax (VAT), both at 13 percent. Every story looked at the idea from the left, relying on loaded figures released by Citizens for Tax Justice (CTJ). The day after the primary, NBC's Lisa Myers began the crusade: "Brown portrays himself as the champion of the little guy. Yet, his flat tax would cut taxes on the rich and increase them on everyone else." Myers then cut to CTJ President Robert McIntyre.

On World News Tonight, Bob Jamieson asserted: "The group's study ...says Brown's plan would hurt middle and low income families." After citing some figures, he continued: "The group says the business tax would be passed on to consumers. That would hit low income families hardest, because they spend a higher percentage of their income on essential goods and services."

CTJ's press release called the flat tax "just another dose of 'trickle down' economics. It would be the greatest thing for the rich and powerful since Andrew Mellon was Calvin Coolidge's Treasury Secretary in the 1920s." But reporters failed to identify CTJ's left-wing agenda. Instead, on the March 26 Prime Time Live Sam Donaldson reported: "According to the non-partisan organization Citizens for Tax Justice, an average American family with an income of $32,000 now pays combined federal income, Social Security, excise and gas taxes of $5,920. Under the Brown plan, the same family would pay between $7,360 and $8,320 while the wealthy one percent would get a tax cut of $86,000." On NBC Nightly News on March 27 reporter Mike Jensen declared that "most economists don't think it will work" and "that his plan would help the rich, but hurt the poor and middle class." Jensen then cited the CTJ figures, saying they came from "one independent study."

CNN attempted balance. Reporter Brooks Jackson put CTJ's numbers into an on-screen table, but he also interviewed two pro-flat tax economists, noting "most economists say a flat tax would be simple, efficient and great for business." Only CNN, in an earlier story, mentioned CTJ's interest in the debate: Until becoming Clinton's campaign manager, David Wilhelm had been CTJ's Executive Director.

No reporter, however, explored the games CTJ played. Brown's plan would let people deduct their rent, a factor CTJ failed to estimate. To make the flat tax seem more burdensome on the poor and middle class, CTJ's flat tax table added six percent for state sales taxes and assumed the poor would pay the 13 percent VAT on their entire income. But to measure the current situation, CTJ did not count state sales taxes. In the April 20 New Republic, the Hudson Institute's Alan Reynolds explained that "we already have a flat tax that exceeds 15 percent. It is called the Social Security tax. And it falls on the very first dollar earned. Because Brown would scrap that tax, the net effect is to replace a 15 percent tax with a 13 percent flat tax."

In a National Center for Policy Analysis study, economists Gary and Aldona Robbins noted the flat tax would spur job growth by shifting the tax burden from labor to capital and that simply keeping the personal exemption would insure that the poor don't pay more. As for reporter's contention that a VAT would further burden individuals, they explained: "Those who believe that VAT taxes would be passed on to consumers must also believe that Social Security taxes, corporate income taxes and excise taxes are currently being passed along to consumers -- since these taxes are also costs of doing business."

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