December 09, 2012
Newspapers are supposed to be in the business of informing readers. It’s hard to see what information was provided when an article on the tax increases associated with the Affordable Care Act (ACA) told readers:
“Among the most affluent fifth of households, those affected will see tax increases averaging $6,000 next year, economists estimate.”
It’s difficult to know what this is supposed to mean. The most affluent fifth of households would be around 26 million households. If the tax increases amounted to an average of $6,000 per household that would come to $156 billion a year. However the next paragraph tells us that the projected tax take is $318 billion over ten years. This implies a tax hit on these families that is less than one-fifth as large. (The same tax would produce considerably more revenue ten years out than next year.)
Presumably the piece means that the tax will affect a narrow subset of the top quintile and that this narrow subset (mostly people with income over $200,000 a year), will see an average increase in taxes of $6,000 a year. The Tax Policy Center puts the number of tax filing units (roughly households) affected as 2.8 million. It should have been possible to more clearly describe the impact of the tax increases associated with the ACA.
[Thanks to David Maynard for calling this to my attention.]
[Correction: An earlier version said “26,000 million households,” which several readers called to my attention. Robert Salzberg provided the Tax Policy Center number.]
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