The Wall Street Journal editorial board has a long history of liking tax relief only when it benefits the wealthy. Last year, the Journal board slammed rebates for middle- and working-class New Jerseyans, while praising tax cuts for rich Ohioans (FAIR.org, 7/16/21). This year, it’s singing the same tune over different states’ approaches to tax relief.
The paper’s editorial page (6/27/22) lambasted progressive tax rebates in California as a “bribe…to vote Democratic” in the upcoming midterm elections. Under the rebates, Californians making up to $75,000 annually will receive $350, plus that same amount per dependent. Those making between $75,000 and $125,000 will get $250 and those making between $125,000 and $250,000 will get $200 (at which point the rebates stop).
For the Wall Street Journal (6/27/22), when Democrats give them, tax rebates are a “bribe.”
The Journal called this relief “street money,” “a tradition in big-city politics” wherein “politicians dole out” cash “for political support.” Almost exactly one year earlier, the board (6/30/21) made a similar claim about New Jersey rebates for parents making under $150,000, labeling them an attempt to “buy votes.”
The idea that the Democrats who championed the rebates needed to “buy votes” in deeply blue New Jersey was dubious. But California is even more friendly territory for Democrats. President Joe Biden soundly defeated Donald Trump in California by more than 29 points in 2020. Gov. Gavin Newsom won his recall election last year by a similar margin. At the time of writing, Democrats constitute 78% of the California State Senate and 75% of the Assembly. For better or worse, the blue team is sitting pretty in the Golden State. So why use “street money” to buy votes when they already have so many?
The Journal claimed it’s because California Democrats fear falling short of a supermajority that would allow them to “raise taxes without Republican support.” (The Democrats need two-thirds of each California house to increase taxes—a margin they currently exceed by a comfortable margin.) Naturally, the editorial board also thought Democratic lawmakers should forgo this course of action, and instead try to “cut taxes” and the budget.
From the poor to the rich
But “cutting taxes” means something very particular to the Journal. In April, Kentucky Republicans passed a tax cut that the Journal (4/15/22) praised as a “success” and marker of “progress.” To the board’s delight, the GOP reduced the state’s flat income tax from 5% to 4.5%, ostensibly “reducing the income tax for all Kentuckians.”
How the Wall Street Journal prefers its tax breaks (Chart: Kentucky Center for Economic Policy, 4/1/22).
This is technically incorrect, however. The poorest 800,000 or so people in Kentucky pay no state income tax, and thus receive nothing. And many working-class citizens won’t have it much better: The Institute on Taxation and Economic Policy found that while the poorest 20% of Kentucky residents are projected to get an average cut of just $20, the quintile directly above them will get not much more, only $115. That means the bottom 40% of Kentuckians will, on average, not even get enough to purchase the new Madden video game dropping next week.
Now compare that to the expected windfall for wealthier Kentuckians. Cumulatively, the top 20% receive a whopping 65% of the overall benefits—and 37% go to just the richest 5%. The top 1% will enjoy an average cut of $11,056 (Kentucky Center for Economic Policy, 4/1/22).
But note (as the Journal did not) that all Kentuckians pay taxes–a regressive 6% sales tax, which Republicans did not cut. In fact, to help cover the budget hole left by the giveaway to the state’s wealthy, the bill contains provisions expanding the sales tax to 35 new services (PwC, 4/13/22). That means the poorer you are in Kentucky, the more likely you are to see a net decrease in the amount of money in your pockets due to the new legislation.
And your quality of life will decline further still, as the tax cut “undermines investments in public education, human services and other public needs” (Kentucky Center for Economic Policy, 4/1/22). This taking from the poor to give to the rich is what, in the eyes of the Journal board, constitutes a “responsible use of a two-year budget windfall.”
It’s another case of deja vu: Last year the Journal (7/5/21) commended a tax cut in Ohio as “leaving more money in taxpayers hands”—a plan that, like Kentucky’s, gave virtually nothing to middle- and working-class people while rewarding the state’s top 1% with thousands of dollars.
It is clear where the Wall Street Journal editorial board stands. They like giveaways to the rich, even if they come at the expense of the most vulnerable. As for broad assistance that ensures those in need aren’t left behind? Sounds like corruption! In a dynamic world, the Wall Street Journal’s classism is a constant.
ACTION ALERT: You can send a message to the Wall Street Journal at wsjcontact@wsj.com (or via Twitter: @WSJopinion) Please remember that respectful communication is the most effective. Feel free to leave a copy of your communication in the comments thread.
The post WSJ Hates Tax Breaks: California Edition appeared first on FAIR.
This content originally appeared on FAIR and was authored by Elias Khoury.
Elias Khoury | Radio Free (2022-08-11T22:08:50+00:00) WSJ Hates Tax Breaks: California Edition. Retrieved from https://www.radiofree.org/2022/08/11/wsj-hates-tax-breaks-california-edition/
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