Friday, May 20, 2011

Andrew Ross Sorkin is not helping

At least not with reporting like this:
Whatever the policy debates, households at President Obama’s dividing line might be wealthy, but that doesn’t mean they feel wealthy.

On a Yahoo message board, a poster named Mason, who lives in Manhattan with two young children, said his household income was $262,000. “I understand the need to raise taxes,” he wrote, “but I don’t understand why people like us are lumped in with millionaires and billionaires.”
Are we talking about taxable income here? The writing isn't very clear on this point and I couldn't get the link to work, so I would be inclined to assume that the phrase "household income" refers to the money coming into the household. If that's the case, then Obama's proposed tax increases wouldn't affect Mason at all.

But let's assume, just for the sake of argument, that we are talking about taxable income. Even if we make that assumption, the higher rate would only apply to twelve thousand dollars. Please check my math on this, but it looks like going from 33% to 39.6% would mean something around an eight hundred dollar increase.

Eight hundred dollars. Eight hundred dollars to someone who is probably bringing in close to three hundred thousand in gross income. Eight hundred dollars to someone living in a town where dinner for two at a nice restaurant can easily run you four hundred.

It's true that the writers and the editors of the NYT have always been deeply moved by the hardships of Manhattanites but even Sulzberger would draw the line at making this big of a deal over this small an amount of money. That's why Sorkin (in a story rich with specific figures) chose not to run this particular number.

Sorkin's "Rich and Sort of Rich" is standard NYT things-are-complex, both-sides-have-point, look-at-how-objective-I-am journalism, but if you actually clear away rather than add to the confusion about marginal rates and taxable income, the whole story collapses.

Sorkin is a smart and experienced financial journalist which makes this sort of shoddy reporting even less forgiveable.

[Joseph and I have been hacking away at this for a couple of days now. You can find the rest of the thread here, here and here.]

1 comment:

  1. In 2011 the marginal tax rate for married filing jointly for incomes between $212,300 and $379,150 is 33%. In 2000, the marginal tax rate for married filing jointly for incomes between $161,450 and $288,350 would be 36%. Only over 288,350 would be 39.6% unless he was single or married and filing separately.

    So I think he is really paying more like $360.

    There is a nice spreadsheet @

    But this only reinforces your (excellent) point.