Network news shows: omitting important economic facts.

• Author: Lamer, Timothy W.

Americans are not being informed that the wealthy pay most of the Federal income taxes; that free enterprise can save the environment; that domestic social spending continues to soar; that Social Security will bankrupt future generations; and that government health care mandates increase the number of uninsured people.

According to the National Council on Economic Education, 79% of Americans get their information about the economy from television. When the network news shows fail to provide context in economic stories or simply leave basic economic facts out of their reports, most viewers remain uninformed. Reporters frequently ignore five important economic facts.

Missing Fact #1: The wealthiest Americans pay most of the Federal income taxes. "The President thinks [the Republicans'] tax cuts are too generous to the wealthy," stated ABC's John Cochran on the June 9, 1997, "World News Tonight." Paula Zahn, on the June 30, 1997, "CBS Evening News," said Pres. Clinton "disagrees with key parts of the tax cut bills passed by the House and Senate because they give too many breaks to the wealthy and not enough to middle-income Americans."

Cochran and Zahn are not alone. Most network reporters repeat the claims of those who oppose tax reform without putting such statements into context. Specifically, they fail to provide basic facts about who pays taxes and how tax rates affect the distribution of the burden.

"According to IRS data," indicates Daniel J. Mitchell, an economist at the Heritage Foundation, "the top one percent of income earners pay nearly 29% of the income tax burden; the top 10% pay more than 59%; and the top 20% pay more than 74%. The bottom 50% of income earners, on the other hand, pay less than five percent of income taxes."

Mitchell also calls a myth the claim that lower tax rates necessarily mean the rich will pay less. "This outcome depends on how much tax rates are reduced." he argues. "History indicates that the revenue-maximizing rate is less than 30%. In other words, when marginal rates are higher than 30%, the rich probably will pay more if rates are lowered. The reason: Because incentives to hide, shelter, and underreport income are reduced."

Mitchell points out that in the 1920s, the 1960s, and again in the 1980s, the wealthiest taxpayers shouldered more of the tax burden as their tax rates fell. For example, "The Reagan years saw the top tax rate fall from 70% in 1980 to 28% in 1988. What happened to the rich? The top one percent went from shouldering 17.6% of the income tax burden in 1981 to paying 27.5% of the total in 1988. The top 10% saw their share climb from 48% in 1981 to over 57% in 1988."

Despite the large amount of time devoted to the tax issue by the networks, they rarely go into enough depth to provide basic information to...