MediaWatch: November 1990
Table of Contents:
Janet Cooke Award: CBS: Number Juggling
Sometimes a story is so one-sided and misleading that it deserves to be seen in its entirety. So, MediaWatch has printed below the unedited transcript of this month's Janet Cooke Award winner: an October 16 CBS Evening News story by Richard Threlkeld.
Dan Rather: "Elected officials from President Bush on down are now trying to tap into and deflect voter outrage over the national debt and tax mess. At stake for the public in the final budget deal: whose taxes will go up and whose benefits will get chopped. For some perspective and context on the public's perception of a raw deal in the making, correspondent Richard Threlkeld is here tonight with the first of looks we'll be taking at the tax tangle and who pays. Richard?"
Threlkeld: "Dan, taxpayers always get mad when taxes go up, but what really gets taxpayers mad is when they suspect they've been paying more than their fair share. For a long time they accepted the conventional wisdom that if you cut taxes for the rich, the benefits would trickle down to everybody. But all the latest polls now show that most taxpayers have finally come to suspect otherwise."
Man on street: "I don't think the rich people pay what's equivalent to their wealth. I think that the poor people are taxed more and they make less."
Threlkeld: "And there's some evidence to prove their suspicions. Largely because of tax changes in the '80s, the income of the richest five percent of Americans has gone up by almost 50 percent while their tax rate's gone down about 10 percent [on-screen visual: Income Up 45%; Taxes down 10%]. Meantime, the income of the poorest 10 percent has gone down 10 percent and their tax rate has gone up by more than a fourth [on-screen visual: Income Down 10%; Taxes Up 28%]. While Congress was vainly trying to balance the new budget, millions of taxpayers were having the same problem balancing their budgets and finally figured out why: taxes."
Kevin Phillips, 'Republican Political Analyst': "People who were losing during the 1980s didn't know quite what was happening, they couldn't explain how it happened, but they began to see that they could buy less, that their standard of living was either stagnating or declining."
Threlkeld: "So last week when Congress and the White House first came up with a deficit plan that seemed to give the rich still another tax break, that was the last straw."
Woman on street: "If you have more money, then you should pay more money, and that's how I feel."
Man on street: "Target the rich. I'm not one of them."
Carol Cox, 'Cmte. for a Responsible Fed. Budget':"When people from working class families see their taxes go up, they'd like to see people that they think are better off than they have their taxes go up as well."
Threlkeld: "And the Democrats have gotten the message. For the first time in a decade they are not only unafraid to use the T word as in taxes, but they're even using the R word, as in soak the rich."
Rep. Barbara Boxer, 'D-Budget Committee': "Democrats are working for budgets that are fair so the Helmsleys and the Donald Trumps at last will pay their share."
Threlkeld: "So if and when they do sort out that deficit mess it's likely the rich are going to get soaked, at least a little, to make up for the soaking they avoided in the '80s, Dan."
What's wrong with this report? Not only were his sources totally one-sided in favor of raising taxes on the "rich" (inserting soak-the-rich "Republican analyst" Phillips is not an attempt at balance), his statistics were cleverly twisted to paint the worst possible picture of 1980s tax policy, specifically the 1981 and 1986 tax rate reductions.
Threlkeld did not attribute his statistics to any source, but they matched a March 26 Congressional Budget Office (CBO) report, Tax Progressivity and Income Distribution. And Threlkeld didn't even report the CBO figures honestly. While he said the bottom ten percent's taxes went up 28 percent from 1980-90 (as noted on page 30 of the report), he skipped over the next column in the CBO table: the bottom ten percent's tax share went down 15 percent from 1985-90.
Further, the big increase in taxes on the poor in the early 1980s was largely due to Social Security increases passed by President Carter in 1977 and expanded by bipartisan consensus in 1983. Christopher Frenze, a staff economist on the Joint Economic Committee, pointed out to MediaWatch that page 15 of the same CBO report showed effective income tax rates for the lowest 20 percent were -0.4 percent in 1980 and dropped further to -1.5 percent by 1990. But their social insurance tax rates (for Social Security and Medicare) rose from 5.4 to 7.6 percent over the decade, a 41 percent jump. If Threlkeld were really interested in pinning blame for rising taxes on the poor, he would have noted these trends.
Threlkeld also played with the numbers by insisting the top five percent's income went up "largely because of tax changes in the '80s," but he used the figure 45 percent, which according to page 28 of the CBO report, is the increase in pre-tax income, not after-tax income. If Threlkeld had made any effort to present a balanced story, he could have also mentioned some other statistics:
Economist Warren Brookes recently summarized IRS figures: "The real income taxes paid by 90 percent of Americans fell by 10 percent from 1981 to 1987 while the real income taxes paid by the richest 5 percent rose by nearly 43 percent."
The Census Bureau's 1989 Money Income of Families report demonstrated that while the rich did get richer during the 1980s, so did everyone else. The bottom fifth of families saw their median income fall nine percent from 1973 to 1981 and then rise in real terms six percent from 1981 to 1989.
The Census Bureau's Current Population Survey on after-tax income distribution showed the bottom 20 percent of U.S. households held 4.7 percent in 1986. By 1989, after the tax reform act, that level rose to five percent. In contrast, the income share received by the top 20 percent fell from 45.7 percent to 44.1 percent.
When contacted by MediaWatch, Threlkeld asked that we facsimile our questions. On November 6, he replied: "Ref your fax on our CBS Evening News piece of Oct. 18th [sic], are you suggesting that there is a substantial body of economic opinion that holds that during the 1980s that richer Americans were taxed more heavily than before and that poorer Americans were taxed less heavily than previously? If so, it seems to have escaped the attention of the Congress and the White House, not to mention the media.
"Those in the top bracket saw their income (pre-tax) increase app. 45%. A good many economists and other attribute that increase, or much of it, to tax changes in the '80s. So? What's the point? The figure for the poorest of those who filed was, if memory serves, for the whole decade, not the latter part of it."
"I've no doubt there are economists who will blame President Carter for what many seem to see as the present inequity of the tax system. I regret we didn't have the opportunity to include the views of the economist you talked to. So many economists, so little time."
Viewers deserve a full report on the effect of tax changes of the 1980s, the kind of reporting that balances the contentions and statistics of the liberal argument with those of the conservative side. Instead, CBS replayed the same political attack video on Reaganomics that they and their colleagues have been playing for 10 years.
