A Quarter of a Million Little Pieces: Karen Hube is WaPo & Peterson's Latest Financial James Frey

Right-wing billionaire Pete Peterson continues to use the Washington Post as an outlet for deceptive anti-tax and anti-government propaganda, which the Post then obligingly publishes as “fact.” Peterson’s “Fiscal Times” is a factory that churns out reams of James Frey-like mendacity, which the Post deceptively packages as “journalism.” For those of you who have forgotten, James Frey’s deception was to pose as a former drug addict who got clean through the force of his own unaided will.

The Washington Post, on the other hand, poses as a newspaper.

Peterson’s quickly developing the same relationship to journalism that Lex Luthor had with the citizens of Metropolis in the Superman comics: Exploit it, then destroy it. The latest Peterson production is entitled “Analysis examines what it’s like to be a ‘rich’ family in America.” The “analysis” in question is from someone named, Karen Hube, and it’s based on two phony premises: First it asserts that “President Obama and others have repeatedly used (that level of income) to define what it means to be “rich” in America today.” Then it suggests that it’s actually a struggle to get by on $250,000 a year in this country.

There’s so much deception, confusion, and ignorance in Hube’s piece that it’s hard to know where to start. For oen thing, Hube quotes only one source so she can paint this figure as a randomly and thoughtlessly selected “mantra.” But it’s not a random figure. Itwas chosen because approximately 2% of the nation’s households make this much or more.

What’s more, nobody has characterized this level of income as “rich.” Instead, the President and others have suggested a tax on income earned above this level – a fact Hube either doesn’t understand or about which she deliberately prevaricates. When people talk about a tax on the “wealthy,” they’re talking about a level of income that’s substantially above $250,000. If you tax earnings above that amount, but reduce them for earnings below it, earnings would have to be well above that figure before higher taxes began taking a significant bite.

Hube depicts a struggling family, one she imaginatively calls “the Joneses,” living so close to the financial brink that it may have nothing left in the bank – that is, after it’s done paying for summer camp, music lessons, and of course the maid. She writes: “In reality, to make ends meet, this couple would have to cut back on discretionary expenses – take a pass on a new suit, skip an annual vacation and drop some activities for the children.”

“To make ends meet” after what? The implication is that these terrible austerities – fewer music lessons for the kids, one less Brooks Brothers suit for Dad – would be forced on them by the draconian new taxes proposed by our Robespierre-like President and his party. And therein lies the most Frey-like deception in Hube’s piece: The family in her example wouldn’t pay a single penny more in income taxes under the Democratic proposal. Not one. The Democratic tax proposal would allow taxes to move toward pre-Bush levels, but only for income above that amount. Since this family makes “only” $250,000, their taxes would continue to go down.

Undeterred by reality, Hube continues to hammer away at her deceptive scenario: “Unfortunately, the family would also probably save less, at the expense of retirement or college funds.” What? No retirement funds? Then thank God for Social Security, which will provide some level of protection for them in their old age.

Oh, wait.

There may not be enough Social Security to protect the Joneses in their old age. Peterson’s been trying to slash those benefits for decades – and he’s finally making some headway. The Post’s disclaimer – overlooks Peterson’s lifelong aversion to having the rich (the truly rich, like himself) pay their fair share in taxes. While he poses as someone who’s willing to increase taxes, Peterson has consistently made his position on taxes clear: He wants to cut spending much more than he would raise taxes in order to balance the budget. He wants to lower the highest tax rates for the wealthy, and he wants to replace the lost income with regressive taxes on consumption.

With only minor variations, that’s the classic right-wing, anti-government, anti-tax position. How does the Post’s disclaimer describe Peterson when it (belatedly, in the case of the online article) discloses his role in paying for the Hube piece? “”Hube contributes to the Fiscal Times, an independent news organization that specializes in fiscal and economic matters. It is funded by Peter G. Peterson, who seperately supports groups that advocate for long-term debt reduction.”

That’s not exactly right. Peterson “supports groups that advocate for long-term debt reduction” by cutting spending – especially for vital programs like Social Security and Medicare – while at the same time lowering the tax burden for the very wealthy. Peterson’s mission to cut taxes for the wealthy is overlooked. That’s a telling omission in an “analysis” of a tax on high-income earners!

Here’s another deeply embarrassing Hube touch: She paints our family in the colors of thrift and nobility by pointing out that “they don’t send their children to private school.” And yet when she (or rather Peterson) hired accountants to estimate their total tax level – a burden she characterizes as onerous – she placed them in eight different cities with “top-notch public school districts.”

What pays for those “top-notch” schools, the ones that save the Joneses from the expense of private schools? Taxes. Good private schools in the cities she’s listed can cost anywhere from $20,000 to $50,000 a year. That sounds like a good bargain to me.

Here’s Hube’s soliloquy on the painful burden of taxation on our little family:

“Taxes take a hefty toll. Everything from property taxes and the alternative minimum tax to the taxes tacked on to cellphone bills and the cost of gas, when combined, takes a large bite out of earnings – in some cases even more than the federal income tax toll.”

About those property taxes: Why didn’t they rent instead of buying a home? And how much is the Federal taxpayer giving the Jones in a tax break for their mortgage interest? It could be $10,000 a year or more. As for that Alternative Minimum Tax – yes, there’s been bracket creep since it was imposed in 1969. And what was the marginal tax rate for income above $200,000 in 1969?

Seventy-seven percent.

Today it’s 35% and Peterson’s minions want to cut it down to 28%.

There’s so much to dissect in this shoddy and deceptive “analysis” that we don’t have enough time for all of it. Here’s one nugget:

“… (C)osts assumed by the Joneses could be significantly higher if their circumstances changed. If they worked for themselves, for example, they would have to foot the bill for all of their medical insurance premium, which averages $14,043. As it is, they pay 30 percent of the premium and their employers pay the rest.”

But if the Joneses worked for themselves, they would presumably incorporate. That would allow them to deduct the corporate contribution for health insurance and give themselves a tax break that way. They might even be able to deduct 100% of the premium, which would pretty much leave them at break-even. And Hube, despite the prowess she must undoubtedly possess as an “analyst,” never asks why their premiums are more than $14,000 – or what might be done to control them.

The answer to that question is this: We live in the only developed nation with a privatized health insurance system, so we pay far more in premiums for far less in medical care than any of the others. We could fix that, with more government involvement in the health sector. But that would mean Pete Peterson’s fellow billionaires might have to pay more in taxes.

Others will no doubt comment at greater length about the bubble in which Hube and her editors live – a bubble that seems to provide near-perfect isolation from real world concerns. To the Joneses, and to Hube, the everyday sacrifices which most people make unthinkingly are inconceivable burdens. And prosperity isn’t a privilege, but a burden. Oh, my dear, you just can’t imagine …

I don’t know what Peterson’s paying to fund the “The Fiscal Times,” but I know one thing for sure – and I suspect another. I know he’s getting his money’s worth. And I suspect he’s taking a tax deduction for it, too.

“$250,000 goes quicker than you think,” concludes Hube. Imagine how fast a billion must go.

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