NY Times reporter David Cay Johnston contacts me re: my posting yesterday on his NYT feature

This morning I received an email from Johnston about my posting here:Tom Faranda's Folly: The New York Times plays a numbers game - and gets called on it. I appreciate him sending me the note (he also emailed other bloggers who commented on his story) and reproduce it in full. Note that if you go back and read my original posting, most of his references are to the article in The American Thinker that I quoted from:

Mr. Faranda,

1. My piece did not run on the front page, it ran on the front of the Business Day section.

2. You write that "The story must be based on government data on median household income.  The Times was not specific on what data it referred to..." and yet my story specifies that the data is "new tax statistics" and refers to the IRS and the chart cites the IRS as its source.

3. The IRS numbers are what they are. There are many sources of official data on national incomes and we report continually on new government (and some private) data on incomes, wealth, taxes and other measures of the economy. Most of these others sources rely on surveys while tax returns are signed under penalty of perjury. I write a story each year on this tax data. Lastyear and the year before critics complaining that I did not look at multi-year data sufficiently, which was part of the reason I focused on it this time. Five years is a long enough period to eliminate short-term anomalies.

4. You assert that I "played a numbers game" and yet no one has disputed the math in my piece. You can go to the page with Table 1.4 data at irs.gov/taxstats and do your own math if you think I did not accurately report what is in the official data. If you find any error in those calculations it will be corrected immediately. The official government data I cited do in fact show smaller average incomes and, for the first time since 2000, a larger total income (up 3 percent in real terms) since 2000. I also cite historical data to 1945 to give this context, which you do not mention.

5. The year 2000 was chosen because it was the peak year, and the story says that in its first sentence or lede. It is common and widespread practice, for journalists, economists and policy makers to compare against the previous peak (gosh, that is what Investors Business Daily does, for example, with its stock tables, listing the all time high price as a benchmark). My choice of year had had zip to do with who is in the White House and everything to do with it being the peak year, as the article states.

6.  You suggest that I should have written about the .05 percentage point decline in average household size, but that measure has nothing to do with the official data on which I relied. (There was no significant change in the status of tax filers that would alter the data from year to the next, either, such as a surge or sharp drop in married filing separately.)  However, I carefully noted what was relevant:  there were some changes in the size of the income groups and I reported on that from the under $25,000 level, at the more than $100,000 level and at the more than $1 million level, facts which you ignore.

7. The way that you cite remarks by Mr. McIntyre from my report creates a false impression that he was talking about the average incomes data. Clearly his "breath" remark referred only to the tax savings accruing to those at the top from the reductions in tax rates on dividends and capital gains. My story stated:

***Robert S. McIntyre, the director of Citizens for Tax Justice, said that even though he expected a few very wealthy people to reap most of the tax savings generated by lower tax rates on dividends and capital gains, the size of the savings “still takes your breath away.”***

Mr. McIntyre was clearly referring to the fact that just 11,433 taxpayers collected $21.7 billion in tax savings and that two-thirds of these savings went to taxpayers with incomes of $1 million or more, a group that amounts to less than than a quarter of one percent of all taxpayers.

8. Mr. McIntyre was quoted because his group posted their analysis before my story ran and our policy is to attribute in such cases (I have at times credited individual reporters at various publications).

Allbests,

David Cay Johnston

Reporter

The New York Times

Well, here is another post, also highly critical of Johnston's analysis (if you read the comments you'll find DCJ's responce to that post).

Back Talk: Misleading Income Statistics, Courtesy of the New York Times

The writer, makes a case for after-tax incomes being higher for the lower 4 quintiles (that's the lower 80%) and flat for the highest 20% income earners. The graphs he provides are easy to understand and the data is from a group called the Tax Policy Center.

And just for a little more over-kill on the subject here is another business blog that comes to similar conclusions to Back Talk - BizzyBlog » New York Times Twists Data to Make Great Personal Income News Appear Awful

He attributes the higher after-tax, inflation-adjusted income of the bottom 80% of taxpayers to the rise in the Earned Income Tax Credit (EITC) and the reduction in the income tax rates (from 15% to 10% for the very lowest tax brackets).

NY Times reporter David Cay Johnston, is a vastly experienced writer, starting as a newspaper reporter in 1968. He has been with the Times since 1995. David Cay Johnston - Wikipedia, the free encyclopedia

Johnston is the author of: Perfectly Legal: The Covert Campaign to Rig Our Tax System to Benefit the Super Rich - and Cheat Everybody Else.

He also co-wrote Ten Excellent Reasons not to Hate Taxes, and according to the Amazon website he has a book coming out in December entitled Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (and Stick You with the Bill)

There David, a free plug for your books -