Kistaro Windrider, Reptillian Situation Assessor (kistaro) wrote,
Kistaro Windrider, Reptillian Situation Assessor

An exercise in deceptive mathematics

From the RSS snippet of this New York Times article on the expiration of tax cuts:

Taxes would not rise for 98 percent of American households under the president’s plan; those earning $1 million or more would pay an average $100,000 more than they are now.

Wow! A tax increase that equals 10% of income that people will have to absorb into their lifestyle's with a single year's change? How could that be livable?

Well, it turns out that's not what it's saying, even though that's exactly what it reads like. After all, the set of "those earning $1M or more" does not have an average personal income of one million dollars a year. That is, instead, the absolute low end of this top 0.1%. The actual tax increase is, in the absolute top bracket, 3.6%. Unpleasant, as all taxes are, but hardly 10%.

Oh, wait, yes, I did say "top 0.1%". That 98% number is for everybody for whom taxes aren't rising, so that's people who make less than $250,000/year. In that middle range between $250,000 and $1M- well, the article doesn't say, because the only range it gives is $500,000 to $1M. But as they're getting an increase of about $17,500 (see article), it's safe to say the $100,000 number is misleading when it's anchored to a mere $1M.

The $100,000 number refers to approximately 3.6% of income. Actually, it's a little less, because the other marginal rate going up is going up by 3%. So a conservative estimate for the actual amount of money you have to make to see that sort of a tax increase:

So the average income for this bracket isn't $1M/yr, it's $2.7777...M/yr, and this article would feel a lot more honest if it said that somewhere prominent. The New York Times had to get their $100K from somewhere, which implies they had the $2.7777...M number in the first place, then decided not to put it in the article.

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Tags: journalism, math

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