Notes on the Atrocities
Like a 100-watt radio station, broadcasting to the dozens...

Wednesday, August 06, 2003  

Didn't get around to commenting on Krugman yesterday, but he's well worth a read.

The [Treasury] agency's analysts find that they are no longer helping to formulate policy; instead, their job is to rationalize decisions that have already been made. And more and more, they find that they are expected to play up evidence, however weak, that seems to support the administration's case, while suppressing evidence that doesn't....

Here's the story: Treasury has an elaborate computer model designed to evaluate who benefits and who loses from any proposed change in tax laws. For example, the model can be used to estimate how much families in the middle of the income distribution will gain from a tax cut, or the share of that tax cut that goes to the top 1 percent of families. In the 1990's the results of such analyses were routinely made public.

But since George W. Bush came into power, the department has suppressed most of that information, releasing only partial, misleading tables. The purpose of this suppression, of course, is to conceal the extent to which Mr. Bush's tax cuts concentrate their bounty on families with very high incomes. In a stinging recent article in Tax Notes, the veteran tax analyst Martin Sullivan writes of the debate over the 2001 cut that "Treasury's analysis was so embarrassingly poor and so biased, we thought we had seen the last of its kind." But worse was to come.

For his June 22 interview with Howard Dean, Tim Russert asked the Treasury Department to prepare examples showing how repealing the Bush tax cuts would affect ordinary families. Presumably Mr. Russert thought Treasury would provide a representative selection — that is, like many in the media, he doesn't yet understand the extent to which Treasury has become an arm of the White House political machine.

In any case, the examples Treasury provided to Mr. Russert and others in the media were wildly unrepresentative. To give you a sense: the Treasury's example of a "lower income" elderly household was one receiving $2,000 a year in dividend income. In fact, only about one elderly household in four receives any dividend income, and only one in eight receives as much as $2,000. Not surprisingly, the "Russert families" gained far more from the Bush tax cuts than a representative sample. As Mr. Sullivan put it, "If this continues, the Treasury's Office of Tax Policy may have to change its name to the Office of Tax Propaganda."

What I enjoy almost as much as reading Krugman's latest article is reading the response at Just One Minute. But yesterday's column went curiously un-rebutted. Bulletproof?

[Update. Well, hard to call it a rebuttal, but Tom got around to waxing snarky about the good professor after all.]

posted by Jeff | 9:59 AM |
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