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Once again liberals in Congress have sought to deceive the nation about taxes. They have done it before, most notably in the early 1990s when trying to rewrite the history of Reagan's income tax rate cuts.

This time they have used similar methods with the hope of deceiving the people of the United States about President Bush's tax rate cuts. As I wrote before about the deception concerning Reagan's record and liberal attempts to spin it, liberals simply cannot use actual facts when discussing taxes, so they have to resort to "reports" in which they twist the facts until they resemble a pretzel—a pretzel that appears to support what liberals say about taxes.

Let's take a look at what the liberal media is saying about the latest report from Congressional liberals.

WASHINGTON (AP) - President Bush's tax cuts since 2001 have shifted more of the tax burden from the nation's rich to middle-class families, according to a study released Friday by the Congressional Budget Office.

The tax rate declined across all income levels—but more so in the top brackets, the report said.

People in the top 20 percent of incomes, averaging $182,700 a year, saw their share of federal taxes decline from 65.3 percent of total payments in 2001 to 63.5 percent this year, according to the study by congressional budget analysts.

In contrast, middle-class taxpayers—with incomes ranging from $51,500 to $75,600—bear a greater tax burden. Those making an average of $75,600 had the biggest jump in their share of taxes, from 18.5 percent of all payments in 2001 to 19.5 percent this year.

The study, requested by congressional Democrats in May, is expected to provide fodder for the presidential campaign over the fairness of more than $1 trillion in tax cuts Bush has pushed through Congress since taking office.

....

The first claim, that President Bush's tax cuts have shifted more of the tax burden from the nation's rich to the middle-class families is simply an outright lie. What liberals did was to compute the effects of the tax cut (according to their standards) and then roll in every federal tax they could think of, including employer paid taxes (such as payroll) and taxes that may have nothing to do with taxpayers directly (such as corporate income taxes). Liberals, of course, programmed how much of those taxes would be born by the middle class taxpayers. Anyone want to guess how much of non-individual taxes they assigned to the middle class? It is hard to say since they didn't release their methodology or details of their equations!

What we do know is how individual tax rates have been lowered by President Bush's tax cuts. Even the Congressional report admits that individual tax rats went down for everyone. (See table 4 in the report.)

Oddly, the second sentence contains the truth, but (in liberal fashion) tries to explain the deception as valid because taxes declined "more so in the top brackets". Yes, the tax cuts reduced taxes for those who paid taxes. Since the rich pay the vast majority of individual income taxes, any fair tax cut will lower their taxes "more".

The third sentence reveals part of the deception. Not the switch to "share of federal taxes". Not income taxes, but all federal taxes. President Bush cut income taxes, not all federal taxes! The "jump" described in the article is simply the greater prominence that payroll taxes (and other taxes such as corporate income taxes) play when individual income taxes are reduced. If liberals are really concerned about those taxes, we can reduce those tax rates as well. In addition, we have no way of knowing how much the liberal fudging of data resulted in this predicted (not actual!) "jump" in the share of all federal taxes. The actual tax data, which will not be available until people actually pay their taxes, will probably show something very different than what liberals are stating as fact today.

Fortunately for those interested in the truth, the parts of the report that speak to raw data contain the truth of the matter, and how the liberals spin it for their own political gain. From the report:

The burden of taxes levied on businesses actually falls on households. In line with most economists, CBO assumes that the employer's share of payroll taxes falls on employees and thus assigns those payments to employees both as income and taxes paid. The analysis assumes that corporate income taxes fall on the owners of capital and allocates those liabilities—again, both as income and as taxes—to households in proportion to their income from interest, dividends, rents, and capital gains.

...plus taxes paid by businesses (corporate income taxes and the employer's share of Social Security, Medicare, and federal unemployment insurance payroll taxes) and employees' contributions to 401(k) retirement plans. Other sources of income include all in-kind benefits (Medicare, Medicaid, employer-paid health insurance premiums, food stamps, school lunches and breakfasts, housing assistance, and energy assistance).

Now, from an economic standpoint it is fine to say that "all taxes are paid by consumers" since businesses see them as a cost of doing business, and thus something that needs to be accounted for before any profit is realized. The problem is that this study purports to show that tax cuts are causing an increased "burden" on the middle class.

This is the same as claiming that when you get a raise, it is a negative for you because you'll then "pay more in taxes" when you buy more things with that increased income.

In addition, claiming that employer-paid payroll taxes are actually income that you receive, then pay out in taxes is equally ludicrous. If government dropped payroll taxes (Social Security and Medicare), there would not be a blanket 15% increase in wages for employees. Some businesses might use that money to increase salaries, but it could also be used to increase profits, to be invested in research and development, to pay down debt, or any number of other things related to business. There is simply no way to know ahead of time what the ramifications of such changes would be. To simply assign them as "taxes paid" by the middle class is intellectually dishonest.

The liberals are in effect taking one tax-related input, tax cuts, and then claiming that any and all tax-related outputs are tied solely to that one input.

Eventually in the report can be found the raw, un-massaged data that shows the truth:

Relative to the situation in 2000, the three major tax laws enacted between 2001 and 2003—EGTRRA, JCWAA, and JGTRRA—reduce effective federal tax rates for each quintile in every year from 2001 through 2010. For all but the lowest quintile, the reduction is greatest in 2004, when all three tax laws are in effect. Effective tax rates in 2004 are lower than those under 2000 law by 1.5 percentage points for the lowest quintile, 3.9 percentage points for the highest quintile, and 6.8 percentage points for the top 1 percent of taxpayers (see Table 4).

This should have been the headline about tax cuts: Tax cuts "reduce effective federal tax rates for each quintile in every year from 2001 through 2010".. However, that doesn't help the Democrats so they, and their liberal allies in the press, will spread the propaganda that "the rich got more!" in the hopes that a few voters are tricked by it.

We are not fooled by claims that "some other guy might have gotten more back!" from a tax cut. We know that when everyone has their tax rates cut, it is individual income and deductions determines the final taxes paid, not some evil government plan to reward only certain people with "targeted" tax cuts. The only way I can pay less in taxes than someone with identical income is to have more deductions. That is not evil, it is not a trick to reward the rich, and it is not illegal or unethical. Democrats need to get over it!

Others have noticed the liberal deception as well. Heritage writes:

To Summarize

From 2005 to 2010, the tax cuts that Reuters reports have "transferred the federal tax burden from the richest Americans to middle-class families" raise the comparative tax burden for the richest Americans and lower the burden, a bit, for middle-class families. Throughout the time period, the actual tax burden on both groups is reduced.

It is unfortunate that many voters will only see the liberal deception, and not the well-deserved spanking that liberals receive here and elsewhere for their deception.

They have to resort to "reports" in which they twist the facts until they resemble a pretzel—a pretzel that appears to support what liberals say about taxes.

The first claim, that President Bush's tax cuts have shifted more of the tax burden from the nation's rich to the middle-class families is simply an outright lie.

The problem is that this study purports to show that tax cuts are causing an increased "burden" on the middle class.

To simply assign them as "taxes paid" by the middle class is intellectually dishonest.