News Organization Bemoans Public's Lack of Knowledge on Issue It Rarely Mentioned

"What if a president cut Americans' income taxes by $116 billion and nobody noticed?" That's the lede on a recent New York Times article, one talking about a tax cut called Making Work Pay (MWP). President Obama's staff was instrumental in crafting and passing the MWP, which was part of the Recovery Act. The tax cut is stealthy, in that its design spreads the benefits out in small amounts, in each paycheck, as opposed to a single, larger payout at tax time. It was so stealthy that, as the Times article notes, few people know that Obama signed into law a tax cut affecting 95 percent of taxpayers. In fact, the MWP was so stealthy the Times barely mentioned it until this week. So why is the Times surprised no one knows about the tax cut?

The MWP was supposed to be the cutting edge of tax policy. Here's how the Times put it:

Faced with evidence that people were more likely to save than spend the tax rebate checks they received during the Bush administration, the Obama administration decided to take a different tack: it arranged for less tax money to be withheld from people's paychecks.

They reasoned that people would be more likely to spend a small, recurring extra bit of money that they might not even notice, and that the quicker the money was spent, the faster it would cycle through the economy.

The actual MWP tax cut came in the form of a credit, which is the second half of the strategy. The tax credit is there to balance out the higher taxes people would have at the end of the year thanks to this withholdings trick (less withholdings = larger incomes = higher taxes, higher taxes - tax credit = lower taxes). This way, people have more money throughout the year, instead of one big check they toss into a bank account and forget about. Think of it as an effort to make the stimulus' tax package as stimulative as possible.

While we're still arguing about just how stimulative the MWP credit actually was, it's hard to argue that few people know about it. Again, the Times:

In a New York Times/CBS News Poll last month, fewer than one in 10 respondents knew that the Obama administration had lowered taxes for most Americans. Half of those polled said they thought that their taxes had stayed the same, a third thought that their taxes had gone up, and about a tenth said they did not know. As Thom Tillis, a Republican state representative, put it as the dinner wound down here, "This was the tax cut that fell in the woods - nobody heard it."

Clearly, the MWP has a PR problem. The Times article doesn't come out and say it, but it's safe to say that a lot of the people they polled were flat out wrong. If 95% of taxpayers received the credit, a lot of people probably had lower taxes. It's not that all these people were lying; they just didn't realize or remember that they in fact received a quite large tax cut in 2009.

If you think about it, the public's ignorance about the MWP credit is pretty sad. The 2009 tax form had a new section, Schedule M, created specifically for the new Obama tax cut, which had the words "Making Work Pay" all over it. To finish your taxes, you had to fill out Schedule M. So if you received a paycheck in 2009, you came into contact with the MWP credit. And yet, no one knows about it. Even worse, people think that Obama did the opposite, and raised their taxes.

So why do people believe the opposite of the truth? Surely the nation's news organizations were giving the tax cut a fair amount of coverage, considering it affected so many people. A quick look at the Times' archives, however, shows that the MWP tax cut received almost no coverage. Since the Recovery Act's passage, the paper has written about the MWP credit only three times. And most of those articles talked about how the new Schedule M was giving taxpayers difficulties when it came to filling out their taxes. Both the MWP tax cut and the Bush tax cuts are expiring at the end of this year, and yet a search for the phrase "Bush tax cuts" on the Times' website returns thousands of hits, but searching for "Obama tax cuts" gives you only one result, and it's this article. The Times even mentioned the estate tax, which a recent report said affected only .6% of deaths in 2008, in 77 articles this past year.  That's a pretty bad disparity in coverage.

And it's not as if the White House wasn't talking about the MWP. A search of the White House website brings up fourteen press briefings in which the MWP was specifically mentioned, eight presidential speeches, twenty-two press releases, nineteen blog posts (including a vociferous defense of the MWP credit), twelve Council of Economic Advisers reports, and at least a couple videos. That's more times than the New York Times, the Washington Post, the Los Angeles Times, Fox News, and MSNBC mentioned it, combined.

In other words, if national news organizations aren't covering Obama's signature tax cut, one which affected almost everyone in the country, it shouldn't be too surprising that no one knows about it. The Times article shouldn't be surprising because it found people who are uninformed. It should be surprising that it took the paper this long to start informing the public on important issues.

Images by Flickr users Joe Shlabotnik and Barack Obama used under a Creative Commons license.

back to Blog