State and Local Tax Deduction, Media Bias Lesson


Although I haven’t gone back in search of the articles I remember to have read, I don’t recall having come across articles in the mainstream media that reported ObamaCare, as a proposal, with headlines like this:  “Thousands in RI to Be Hit with Individual Mandate.”  Change the issue to a reform (and a party) that journalists oppose, and we get precisely such headlines from the Associated Press, appearing in the Providence Journal: “GOP tax overhaul: Targeted deduction would hit many in R.I..”

The print version is even worse: “Loss of targeted deduction could hit R.I. hard.”  Keep in mind that this isn’t hidden in the Business section or something.  This is front-page, above-the-fold in the Sunday edition, which is the most-read of the week.  The basis of the claim is this, with journalists Christina Cassidy and David Lieb relying heavily on left-leaning think tanks:

The exact effect in every state isn’t known, in part because of differences in the Senate and House versions of the bill. But the change to the deduction for state and local taxes could alter the bottom lines for millions of taxpayers who itemize.

In Rhode Island, 32.8 percent of filers claim the deductions, ranking it 12th among all of the states.

Back when ObamaCare was the question, journalists (and their left-wing sources) were much more interested in the number of people to be saved from the ravages of lacking health insurance even if they didn’t want it.  In other words, they played up the notion that the cost was worth it.

With tax reform, they downplay the trade-off, even though it’s much more direct and quantifiable.  Cassidy and Lieb do vaguely acknowledge that “most tax filers currently take the standard federal deduction,” which means this provision won’t affect them, and “some of those taxpayers [who do itemize] could get a larger deduction under the Republican plan.”  They don’t bother to put numbers on it, though.

In 2015, 170,890 Rhode Island tax filers took an average state-and-local tax deduction of $7,242. Under the GOP plan, the standard deduction on federal taxes will increase by $5,650.  This increase in the standard deduction is bigger than the state-and-local tax deductions for every single Rhode Island tax filer with income under $100,000.  The change will be a net benefit to all of those Rhode Islanders.

If journalists wanted to be accurate, they’d report that 15% of Rhode Island taxpayers might see an increase based on this change, all of them in the upper income brackets.  But that wouldn’t help the media’s preferred party nearly as much.

Of course, the obvious solution is to force our state and local governments to stop taxing us so highly, but that would be unthinkable.