Last week, this headline, or a variant on it appeared across the state:  "Analysis: Walker's income tax cut helps rich more."

This is, of course the usual liberal narrative to attack income tax cuts, but the uncritical acceptance by the state’s media was… well, it wasn’t surprising at all. By and large, media outlets (1) used the analysis by the left-wing Institute on Taxation and Economic Policy for the equally left-wing Wisconsin Budget Project verbatim, and (2) never identified the organizations as progressive advocacy groups.

But, even so, one suspects that this is the headline that the Walker folks hoped to avoid.  By leaving the upper tax rates untouched (for families making more than $211,000) and lowering the three bottom brackets, Walker might have imagined that he could diffuse the class warfare attacks on tax cuts.

If so, he underestimated the mendacity of the left and the willingness of the media to play along.

For example, today's Milwaukee Journal-Sentinel reports:

The top 20% of Wisconsin households - those making more than $90,000 a year - would take home more than half of all of Gov. Scott Walker's proposed income tax cut, an analysis has found.

The top 5% of tax filers - those with incomes above $162,000 - would pull in 20% of Walker's more than $300 million tax cut.

Walker has touted his proposal as a "middle-class tax cut" and pointed out that he only lowered income tax rates . 
Relying heavily on raw dollar amounts,  the stories reported that a family of four making $80,000 would save $106 a year under the tax cut, while a family earning  $374,000 or more a year would save $285 annually. Here’s the Wisconsin Budget Project's chart:

 

This was enough to get reporters and editors to bite. 

But we’ve been through this before haven’t we?

Missing from the analysis is that the upper income earners pay far more in income taxes to begin with and their cut is proportionately smaller. So let’s examine how the Walker cuts actually work:

Every taxpayer who actually pays taxes gets a tax cut. The bottom rate goes from 4.6% to 4.5%; the second lowest rate drops from 6.15% to 5.94%; the third rate drops from 6.5% to 6.36%. Those brackets include all income below $211,000.

As a result:

Families earning between $20,000 and $60,000 have their taxes cut at least 3% or more. The average family with $80,000 in income will see a cut of about 2.9%.

But because the top two brackets – 6.75% and 7.75% are left intact – the tax savings shrink for upper income taxpayers.

Even though the overall Walker tax cut is 2.2%, filers with incomes over $300,000 will see an average tax cut of just 0.6%

Except in the fever swamps of the left, this hardly seems skewed to the rich. But what about the overall size of the tax cut? These charts rather dramatically illustrate what last week’s media accounts left out.

The first chart measures tax relief in dollar amounts.

 


 

The second chart illustrates the percentage share of the tax cut.

 


 

And, yeah, that’s why we need an alternative media.