Sanity Injection

Injecting a dose of sanity into your day’s news and current events.

Archive for August 18th, 2008

Let the disinformation begin, Part II: Corporate taxes

Posted by sanityinjection on August 18, 2008

Last week, a number of major media outlets, including the Associated Press, filed stories with headlines like this: “Most Companies in U.S. Avoid Federal Income Taxes.” The basis for these stories was a report from the Government Accountability Office showing that, in fact, 60 to 70 percent of American companies pay no federal tax in a given year. Certain legislators, inclduing Speaker of the House Nancy Pelosi, seized on this as an argument for increasing taxes on corporations. So what’s wrong with all this?

Proving that a little knowledge is a dangerous thing, none of the news stories or left-wing legislators bothered to ask the question of *why* so many companies pay no federal taxes. The answer is very simple: The vast majority of “companies” in America are small businesses, many of which in any given year do not make any profit, and therefore do not pay any taxes. What little money they make is generally paid out to the owners as wages rather than having to be taxed as a dividend. For larger corporations, 75% do pay federal tax in a given year, and of the ones that don’t, they usually end up paying the following year.

The point is that in this case the media, and legislators like Pelosi, are either guilty of deliberately misrepresenting the facts in order to justify their goal of raising taxes, or they are badly uninformed and rushing to judgment based on insufficient information. I’m not sure which is worse.

The following article, although written by a very partisan source, explains the problem in detail. The issue is not that you can’t advocate for raising taxes, but if you’re going to do that, it shouldn’t be based on inaccurate information or deliberate falsehood:


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Let the mainstream media take note – please.

Posted by sanityinjection on August 18, 2008

 A political event took place on Saturday that probably escaped the notice of all but political junkies and evangelical Christians. Yet it was an important one.

For the first time since becoming their party’s presumptive nominees, Senator John McCain and Senator Barack Obama shared a stage, albeit briefly. The venue was the Saddleback megachurch in California. The church’s pastor, Rick Warren, a major figure in the evangelical community, invited both candidates to come and answer questions that would be of interest to evangelical voters. Obama answered the questions first, followed by McCain, but the two candidates had an opportunity to shake hands and greet each other in between, a nice photo-op.

What was striking about this event was how much better it was than any of the debates I’ve seen sponsored by the major media. First of all, the questions were excellent and covered areas that would be of interest to any voter, not just Christians. They were not “softball” questions or attempts to skewer either candidate, nor were they tied to recent events like the war in Georgia. The questions focused on the candidates’ lives and worldviews. In short, they were designed not to enable the candidates to “score points”, but to help the audience get to know and understand them better. What an amazing thing. Warren, who asked the questions, treated both candidates with respect but also did not let them get away with avoiding direct answers. And how did the candidates respond? Both rose to the level of expectations and for the most part, gave thoughtful and serious answers.

If I were a major news organization, I would be asking myself why a religious leader was able to do a better job of organizing a political forum than experienced journalists. I think the answer, somewhat surprisingly, is that Warren allowed the event to be about the candidates and not about himself, unlike some journalists who moderate debates who seem to want to show off how much more clever and knowledgeable they are than either candidate.  For Warren, having both candidates respond to his summons and appear with him on stage was sufficient to gratify his ego, so he didn’t feel the need to show them up.

I hope that the major media outlets, as well as the Commission on Presidential Debates, were paying attention and learned some valuable lessons from being out performed by an amateur.

Highlights here:

Full transcript here:

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