Large Tax Increase Not Newsy Enough for Media

Large Tax Increase Not Newsy Enough for Media
Major outlets ignore Democratic Congressmans Social Security proposal that would raise the payroll tax.

By Amy Menefee
May 18, 2005

     The major media have largely ignored a Democratic tax increase proposal launched this week that would place new tax burdens on workers and employers. NBC, CBS, The New York Times and The Washington Post ignored or glossed over the first Social Security plan from a Democrat, who declared that raising the payroll tax would bail out the system.

     Rep. Robert Wexler (D-Fla.) came forward on May 16, 2005, with his plan to fix Social Securitys shortfall by raising payroll taxes. NBC and CBS completely ignored the development. The New York Times and gave Wexler a nod with an Associated Press story about his bill, though they didnt bother to cover the proposal themselves.

     The focus of most of the remaining media, including Fox News Special Report with Brit Hume, ABCs World News Tonight, CNNs Inside Politics and The Washington Times, has been the political ramifications of Wexlers breaking ranks with his party leadership. These media, however, were up front about the contents of the proposal adding a 6 percent tax to income above $90,000, the current cap on the payroll taxs reach.

     Though The Washington Times headline was the misleading Wexler offers proposal to fix Social Security, reporter Amy Fagan was clear that the fix was a tax increase.

     Wexlers bill would raise taxes to address the $11 trillion shortfall the Social Security Administration estimates the system faces in the future. But, as The Heritage Foundations Rea Hederman noted in a critique of Wexlers bill, a study by the SSA showed that eliminating the wage cap on payroll taxes while paying benefits on only earnings below the wage cap would delay the start of Social Securitys annual deficits from 2018 to 2025just seven years.

     Media reports on the issue did not explore the details of whether Wexlers proposal would solve Social Securitys problems, nor did they look into the impact such a sizeable tax increase would have on workers and employers. Because Wexler acted without his partys backing, the political questions overshadowed the economic ones.