The mainstream media rarely like the very rich, but billionaire Warren Buffett is the exception. The Berkshire Hathaway CEO remains unscathed, even adored by the liberal news media due to his liberal politics.
After all, it was Buffett who called for higher taxes on millionaires and billionaires. His call for increased taxes was unsurprisingly embraced by class-warfare loving Obama administration and bolstered by the media. Obama has campaigned on the Buffett rule which would require that people making more than $1 million a year pay at least 30 percent in taxes (even if their earnings come from investment and are currently taxed at the 15 percent capital gains rate).
The broadcast networks have supported the legislation (which was rejected by the Senate on April 16), by talking about fairness in a majority of reports and using the White House’s own terminology of “tax reform.” Other stories included polls showing how popular the millionaires tax might be. ABC embraced Buffett’s secretary and her view that she is an average citizen who just wants to be “treated fairly” when it comes to taxes.
ABC’s David Kerley summarized the legislation and cited public support on April 14, saying, “The so-called Buffett Rule would require those making more than $1 million to at least pay the same rate as the middle class, 30 percent. It’s Warren Buffett who says he shouldn’t pay a lower rate than his secretary. And the American public seems to agree. A Gallup poll just out shows 60 percent of Americans say Congress should pass the Buffett Rule, 37 percent say it’s a bad idea.”
That legislation was voted down 51 to 45 vote on April 16, despite the media’s support for it and Buffett. In 2012, ABC, CBS and NBC newscasts mentioned the “Buffett rule” in 26 stories. Nearly 70 percent of those stories mentioned fair, fairness or unfair -- in keeping with Buffett and the administration's point of view about taxing the wealthy.
That is no surprise since the liberal media have, for the past decade, supported Buffett’s complaint that the wealthy don’t pay enough taxes.
Rarely did anyone criticize the rule or point out that the class warfare premise it is built on is faulty. Only 2 stories (8 percent) specifically mentioned the phrase “politics of envy” which is the other perspective of the Buffett rule.
Liberal proponents of the Buffett rule like Sen. Chuck Schumer, D-N.Y., were also interviewed by the networks. He told CBS “This Morning” on April 9 that the bill was “a question of fairness,” a point he repeated throughout the interview. He was asked if the Buffett Rule would reduce the “inequality gap.” Schumer also mentioned Buffett’s secretary, Debbie Bosanek, who has said she pays a 35.8 percent tax rate.
Bosanek: Cinderella or 1 Percenter?
Obama used Bosanek as a “stage prop” during his State of the Union address, to talk about the unfairness he sees in the tax system.
Bosanek also appeared in a couple ABC news segments to complain about her taxes and support her boss’s call for higher taxes on millionaires. ABC’s Bianna Golodryga said on Jan. 26, “Debbie [Bosanek] says she still feels like Cinderella at the ball after this experience.” Robin Roberts gushed, “I love the relationship between the two of them [Bosanek and Buffett].”
“But up until a few months ago, Debbie Bosanek had never put much thought into her tax rate or that of her boss’s. Well, today she says she’s representing average citizens who want a voice and wanna be treated fairly in the area of taxes,” Golodryga continued. Nowhere in that story did Golodryga ask Bosanek how much she makes in a year.
But according to Forbes magazine columnist Paul Roderick Gregory, Bosanek is no pauper. By his estimate she “likely makes between $200,000 and $500,000” a year. How could that be?
“The IRS publishes detailed tax tables by income level … [A]n average taxpayer in Bosaneck’s [sic] rate (after downward adjustment for payroll taxes) earns an adjusted gross income of $200,000 to $500,000,” Gregory concluded.
Others have also criticized Bosanek’s claim and pointed out that if she is paying a marginal tax rate of 35 percent “She’s earning over $379,150 per year in taxable income, which places here in the top 1% of income earners nationally.” So much for representing “average citizens.” Buffett has called the criticism “ridiculous.” Cato’s Chris Edwards has called Buffett’s tax story “bogus.”
Still she was lauded by ABC’s Golodryga, who said on “World News” that Bosanek got “a hero’s welcome, for a secretary thrust into the spotlight.”
Income Inequality: The Foundation of Soak the Rich Rhetoric
During his 2012 State of the Union address, President Obama said, “We can either settle for a country where a shrinking number of people do really well, while a growing number of Americans barely get by. Or we can restore an economy where everyone gets a fair shot, everyone does their fair share, and everyone plays by the same rules.”
He specifically pushed for the Buffett rule in that address, by seating Bosanek in the gallery and saying that “asking a billionaire to pay at least as much as his secretary in taxes? Most Americans would call that common sense.”
The very basis for Obama’s class warfare calls that the wealthy need to pay their “fair share” is an economic analysis by Thomas Piketty, of the Paris School of Economics, and Emmanuel Saez, of UC-Berkeley. According to The New York Times they are “two academically revered, if publicly obscure, left-leaning French economists.”
Those economists say that median American incomes rose just 3.2% from 1979 through 2007. Many people who lived through those years likely found it difficult to believe those statistics, but of course the administration and many in the media used it as proof that the rich needed to be punished with higher taxes.
However, American Enterprise Institute columnist James Pethokoukis recently exposed the problems with this data for The American, the online magazine of AEI. “But it’s just not true, according to a new study in National Tax Journal from researchers at Cornell University. (Here’s an earlier, working-paper version.) The academics, led by economist Richard Burkhauser, don’t say the findings of Piketty and Saez are wrong — just incredibly, massively incomplete. According to the Cornell study, median household income – properly measured – rose 36.7%, not 3.2% like Piketty and Saez argue. That’s a big miss,” Pethokoukis wrote.
He also quoted this conclusion from the Cornell study: “Income inequality increased in the United States not because the rich got richer, the poor got poorer and the middle class stagnated, but because the rich got richer at a faster rate than the middle and poorer quintiles and this mostly occurred in the 1980s. .. the apparent failure of the median American to benefit from economic growth can largely be explained by the use of an income measure for this purpose which does not fully capture what is actually happening to the resources available to middle class individuals.”
The New York Times published a glowing profile of Piketty and Saez on April 16, in which they argue even the Buffett Rule “would do little to reverse the rich’s gains.” “[T]heir proposed corrective remains far outside the bounds of polite political conversation: much, much higher top marginal tax rates on the rich, up to 50 percent, or 70 percent or even 90 percent …” the Times wrote. But the Times completely ignored the new Cornell study that shows that when everything is factored in that should be (government transfer payments, taxes/tax credits and healthcare benefits) the picture is of significant income growth and declining income inequality since 1989.