Wall Street Journal columnist Karl Rove misled about public opinion regarding taxes to promote the Republican position on the so-called fiscal cliff on the same day his organization released an ad criticizing President Obama's deficit-reduction proposal. The Journal continues to publish Rove's weekly column even as Fox News, its corporate cousin, has reportedly limited his appearances on the network.
Fox News has reportedly decided to curtail Rove's on-air appearances, but Rove's Journal op-ed came on schedule in Thursday's paper, and it contained misleading figures about tax rates for the wealthy.
In his December 5 op-ed, Rove argued that Republicans can win public opinion if they appear open to compromise but continue "emphasizing that the country's problem is too much spending." As evidence that Republicans can win public support, Rove cited a poll conducted for the House GOP leadership, which he claims shows that Americans don't actually support slightly increasing marginal tax rates on the wealthy. But the poll question contained a falsehood about how much the wealthy pay in taxes, rendering its results largely meaningless. Rove wrote:
It is often overlooked that Americans can hold conflicting opinions on the same subject at the same time. While Americans favor raising taxes on the wealthy, a Winston Group poll two weeks ago (conducted for the GOP House leadership) found just 26% of respondents agreeing that "given the state of the deficit, those making over $250,000 a year should have to pay 40% of their income in federal taxes." Some 68% disagreed. This is relevant because Mr. Obama wants wealthy Americans to pay 39.6% of their income in federal taxes, plus additional levies that would bring the total bite to at least 44.6%.
But the poll's suggestion that Obama's plan would require those making over $250,000 a year "to pay 40% of their income in federal taxes" is untrue. Obama has proposed returning to the Clinton top tax rate of 39.6 percent and making other reforms to the tax code, but the wealthiest Americans would be unlikely to pay 40 percent in federal taxes under Obama's proposal due to the structure of the tax code.
Data from the non-partisan Tax Policy Center show that in 2008, more than 99 percent of Americans with incomes over $200,000 paid less than 35 percent in federal taxes and more than 80 percent paid less than 25 percent in federal taxes. In the Clinton years, the richest 1 percent of Americans never paid an average of more than 35.3 percent in federal taxes.
Other polls, including one acknowledged by Rove himself, have found the public does support increasing taxes on incomes above $250,000.
Rove also pushed the false claim that an increase in tax rates for the wealthy would actually be a tax increase on "half of all small businesses income":
In the same survey, 60% said they believe taxes shouldn't go up for "small businesses that make over $250,000 a year." Yet the Obama plan would raise taxes on half of all small business income.
The claim that an increase in taxes on the wealthy would constitute a tax increase on half of all small business income is based on the canard that all business income that is reported on individual income tax returns is small business income. In fact, according to the Center for Budget and Policy Priorities, much of this income actually comes from "large corporate law practices, accounting firms, and wealthy people who invest in financial and real estate partnerships." Indeed, Bush economist Alan Viard acknowledged many of the firms that would be affected by such a tax increase "are hardly small." Viard explained: "How can it be that 3 percent of owners are accounting for 50 percent of small business income? Those firms they're owning can't be all that small."
A Joint Committee on Taxation analysis stated that although 3 percent of taxpayers with business income that would see their taxes go up if taxes are increased on the wealthy, "[t]hese figures for net positive business income do not imply that all of the income is from entities that might be considered 'small.' "
Rove has an incentive to shape opinion in favor of spending cuts and against tax rate increases. On the same day the Journal published his piece, one of the groups Rove co-founded, Crossroads GPS, released an ad attacking Obama for his stance on taxes and pressing him to cut more spending. While Rove's latest piece includes the disclaimer that Rove "helped organize the political action committee American Crossroads," it does not acknowledge his affiliation with Crossroads GPS or disclose the ad the group just released on the subject.
This is yet another example of the troubling ethical history between The Wall Street Journal and Rove. For more than a year during the 2012 election season, the Journal failed to disclose Rove's ties to American Crossroads and Crossroads GPS in his weekly op-eds. After much criticism, including from more than a dozen current and former newspaper editorial page editors, the Journal finally disclosed Rove's link to American Crossroads in September.