Wednesday, December 14, 2011

Engineering Thinking: "PolitiFact’s Analysis of Cain’s 9-9-9 Plan is Fatally Flawed"

We were slow to notice a fresh PolitiFact item by Ed Walker at his blog "Engineering Thinking" from October.

Walker swiftly skewers PolitiFact's treatment of a Herman Cain claim about his 9-9-9 tax plan:
1. The first major problem with PolitiFact’s analysis is that it was not shown to be objective. PolitiFact selected three tax accountants to provide an opinion, but since Cain’s 9-9-9 plan — if implemented — will substantially reduce the need for tax accountants, they are the last folks that should be asked for an assessment.
Indeed, it seems odd that PolitiFact would solicit volunteers* from the ranks of tax accountants to test Cain's claim rather than going to tax experts at a think tank.  Not that the latter route is totally unproblematic.

And Walker's second point:
2. Politifact states in the online version, “For this fact-check, we’ll only be talking about the personal income tax and the sales tax since the business tax directly affects only business owners and corporations.” This assertion is nonsense, however, since everyone’s effective income is directly impacted by the prices that business owners and corporations charge their customers, and those prices are greatly affected by federal corporate and payroll taxes.

PolitiFact completely ignores such taxes, which are often hidden taxes that the Cain plan eliminates.
Walker is deadly accurate with his second point.  PolitiFact seems completely fooled by embedded taxes, formerly neglecting their existence in a fact check of Warren Buffett's claims about effective tax rates for the very rich.  I've coined the term "the Buffett fallacy" for that mistake.

A good fact check does not simply ignore important aspects of the issue it examines.

Walker's post is short, but it's worth a visit to read the entire thing.  So please do so.

* I have a very clear recollection of PolitiFact posting a request for readers with tax expertise to help evaluate Cain's plan.  Unfortunately, the Web page is either a bit hard to find or that item was scrubbed from PolitiFact's Web territory.

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