How to Lie about Tax Increases

Gabriel J. Michael May 18, 2012

Maryland's three day special session ended on Wednesday of this week, as the Democrat-controlled legislature agreed to a package of tax increases projected to raise about $250 million. In spite of virtually unanimous opposition from Republicans and several Democrats breaking ranks, the tax increases could not be stopped. As a result, 14% of those filing taxes in Maryland – that is, 300,000 people or families – will be facing a combined state and local average tax increase of $579. In Montgomery, Baltimore, and Talbot counties, the average increase is more than $700.

To those of us who have been following politics, none of this is surprising. Unable to rein in spending and live within the means of current revenues, Democrats, after tripping over themselves in haste to raise taxes during the regular session, called for an extra inning and managed to finally accomplish what they had sought all along. And just as the regular session involved deceptive framing of a $700 million budgetary increase as “Doomsday,” the special session involved deceptive framing about the impact of the income tax increases that were passed.

Len Lazarick at MarylandReporter.com writes that House Majority Leader Kumar Barve countered Republican opposition to the tax increase by noting that it amounted to just $6.25 a week for a married couple making $250,000 a year, and that he and his wife would be paying just $4.88 a week. A small price to pay, surely, and one he indicated he was willing to pay. Setting aside the issue of whether his willingness to pay is really relevant (I would think that what matters are the other 299,999 citizens whose taxes will be increased), I want to point out how misleading such statements are.

In 1954, Darrell Huff published the now-classic primer How to Lie with Statistics. In it, he reveals the uses and abuses of statistics, including graphical presentation of information. Of course, verbal presentation of information is no less immune to such misrepresentation. By dividing out the impact of the income tax increase across 52 weeks, the delegate is able to make it sound like less than it really is. This is the same tactic used by gut-wrenching charity advertisements and late-night infomercials alike. You've heard it before: “For only a dollar a day...” or “for just four easy payments of $19.95...”

The trouble is, a dollar a day is $365 dollars a year, and four easy payments of $20 is $80, and $6.25 a week is $325 a year. (Tellingly, the delegate does not explain the discrepancy between his own estimate and the $579 figure reported by the non-partisan Department of Legislative Services.) A $500, $600, or $700 increase is not insignificant, and to claim otherwise bespeaks either dishonesty or a lack of understanding about the financial realities facing Maryland families.

Verbal misrepresentation (which is itself really only a euphemism for “lying”) has abounded this year in Annapolis. It's what allows some legislators to claim they aren't raising taxes, they're just “repealing” tax cuts enacted 15 years ago in 1997. It's what allows others to claim they are only raising taxes on the “rich” or those earning “six figure salaries” when in fact, a working husband and wife each earning $75,000 will now face higher taxes.

As long as we're picking units of measurement based on what sounds most favorable to us, here's a good one:

Q: What was the total cost of raising taxes in a special session?

A: $20,000 a day.