Ezra Klein and the Terrible, Horrible, No-Good Tax Calculator
The website Vox (3/25/16) has what editor-in-chief Ezra Klein describes as an “excellent tax calculator” that, in its headline’s promise, “Tells You How Each Presidential Candidate’s Tax Plan Affects You.”
A
ctually, it does no such thing; it’s a gimmick that is entirely useless except as a deceptive advertisement for Hillary Clinton.
As a gimmick, it’s pretty simple. You put in your annual income (actually, your “expanded cash income,” which you probably don’t know even if you know what it is), whether you’re single or married and whether you have no kids, one kid, or two or more kids.
And then it tells you what Donald Trump’s, Ted Cruz’s, Hillary Clinton’s and Bernie Sanders’ “plans mean for your federal tax liability.”
Let’s try it out with the US median household income ($43,585), married, two kids. You get a graphic that looks like this:
~Snip~
Mostly, that big number you get for the Sanders tax hike when you plug in your income is the payroll tax that employers will pay to cover the cost of a single-payer healthcare system. As the Tax Policy Center, which worked with Vox to create the calculator, explains:
We’re including payroll taxes, excise taxes and corporate income taxes as well as individual income taxes…. Most economists think employers pass their share of the tax on to workers in the form of lower wages.
With all due respect to most economists, this is dubious. Unless you work at the rare enterprise that does not have profit as its primary goal, your bosses are already paying you as little as they think they can get away with. If they get a new cost associated with your employment, they may try to raise their prices. They may look for other areas where they can cut costs. They may even decide that they can no longer afford to employ you. But what they won’t do is suddenly realize that they could have been paying you thousands of dollars less all along without you quitting. (They may even be forced to accept a lower profit rate, though that’s something “most economists” seem to exclude a priori.)
Read more:
http://fair.org/home/ezra-klein-and-the-terrible-horrible-no-good-tax-calculator/
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