Highly misleading ads disguised as articles at the WaPo

October 3rd, 2014 at 5:17 pm

I’m a big fan of the WaPo, not to mention a contributor (to the very cool and eclectic PostEverything section) and a long-time subscriber. So it really took me aback to see this so-called “sponsor generated content” masquerading as a Post-produced infographic on corporate tax rates. In fact, it’s nothing more than erroneous propaganda placed there by the Chamber of Commerce, bemoaning the high US statutory corporate tax rates with not a word about the fact that few corporations pay anything like that rate (see figure 7 here, for example, showing that no US industry faces an effective of anything like 39%, the US rate in the “infographic”).

Yes, you get to the ad by clicking on this little box I’ve pasted in below from the WaPo’s homepage. And yes, the box is clearly labeled as “sponsor generated content.” But a) do readers know what that means?, and b) if you click through to the infographic, at least to me it looks like it was clearly designed to trick readers into thinking its a real article by a real Post reporter.

Look, if the Chamber or their front group here–Fair Reform for Growth–want to take out an ad, they should of course be able to do so. But this is propaganda posing as unbiased analysis.

To be clear, I too have argued for a lower statutory corporate rate (and broader base), though I always make sure to point out that many corporations, especially the large multinationals, pay far less than that top rate due to loopholes and these firms’ intensive tax avoidance initiatives.

But that’s not the point. The point is that this an illegitimate and misleading development and I urge my home-town paper to stop it.


Source: Washington Post

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8 comments in reply to "Highly misleading ads disguised as articles at the WaPo"

  1. Larry Signor says:

    Jared. This is a great post, you should cross post it at BTP. I don’t think Dean would disagree.

  2. Smith says:

    Executive summary
    1) Raise, don’t lower corporate rates
    2) Broaden the base without revenue neutrality
    3) US corporate rates are already too low and very competitive.
    4) Always include VAT when considering corporate taxation.

    To be clear, I have argued for a higher corporate statutory rate. This should in no way impede closing loop holes and broadening the base. Why should a corporation making billions of dollars pay the same tax rate as a small business making a few million? Why should they pay less than an individual? Why favor corporations over people? Does anyone think the billions corporations generate, even during a recession, with record profits, couldn’t be put to better use by the government, vs stock buy backs that enrich management holding options and wealthy stockholders? Raising the tax rates in a progressive manner would restore some balance to industries where small businesses get eaten up by market dominating and monopolistic behemoths.

    The infographic at the Post shows
    US 39%
    Japan 37%
    France 34%
    United Kingdom 21%

    It leaves out the VAT, another form of corporate taxation (a tax paid by corporations). I would argue VAT is more onerous, less business friendly, and more regressive, and promotes government waste by hiding tax sources and increases.

    Here are the corporate + VAT rates:
    US 39% + 0%
    Japan 37% + 8%
    France 34% + 20%
    United Kingdom 21% + 20%
    Germany 32% + 20%

    Get the picture?
    http://www.kpmg.com/Global/en/services/Tax/tax-tools-and-resources/Pages/indirect-tax-rates-table.aspx Links on the left show
    Corporate tax rates table
    Indirect tax rates table (VAT)

    Also, don’t be fooled by any reference to flat 15% tax rate, see here:

    “Corporate income tax is assessed on branch income at a flat rate of 15% (plus the 5.5% solidarity surcharge, which results in a combined rate of 15.8%), regardless of whether branch profits are retained in Germany or repatriated to a foreign head office. Municipal trade tax levied at rates between 14% and 17% also is levied, resulting in an effective corporate rate between 30% and 33%. The remittance of branch profits is not subject to withholding tax.”
    http://www2.deloitte.com/content/dam/Deloitte/global/Documents/Tax/dttl-tax-germanyguide-2013.pdf page 5

    There are smaller economies with lower tax rates, and reasons why corporations don’t move lock stock and barrel to them. Piketty covers the futility and inadvisability of a race to the bottom

  3. Kevin Rica says:

    If “corporations are people too” shouldn’t they just file personal income taxes on the standard 1040 form?

    In fact, many of them can qualify for being age 65 or above!

  4. The Raven says:

    The WaPo has never been particularly reliable, but now the owner is the former hedge-fund manager Jeff Bezos famous as one of the founders of Amazon, and the publisher (CEO, more-or-less) is former Reagan chief of staff Fred Ryan.

    Seriously, guy, what did you expect?

  5. Tom in MN says:

    Here is why they won’t stop it (as Prof. K. reminded us today):


    it’s the SOP for the GOP.

  6. Rima S. Regas says:

    This is an example of the ethical “compromises” I was hoping the paper wouldn’t make under Jeff Bezos’ ownership. Feh on my hometown paper!

  7. Jill SH says:

    Anything that is paid for, that appears in a publication, should be labeled “Advertisement.” In print or on the web.