Wednesday, January 07, 2009

AP on Obama tax cuts - clear as mud

OK, is it just me (well, no, because Neil Holdway brought this up first on the ACES discussion board), but it seems AP really muddied the numbers in the Obama tax cut story.

I found an article by Stephen Ohlemacher that goes as follows:
Obama's proposal to stimulate the economy includes tax cuts of up to $300 billion, including more than $100 billion for businesses.
But then:
Obama's tax package also targets individuals, providing a $500 tax cut for most workers and $1,000 for couples, at a cost of about $140 billion to $150 billion over two years. The individual tax cuts may be awarded through withholding less from worker paychecks, effectively making them about $10 larger each week.

Another provision brought to the negotiations by the Obama team would award companies that hire new workers a one-year tax credit at a total cost of $40 billion to $50 billion over two years. Businesses also would get additional incentives to invest in new equipment.

No way I can get that to add to $300 billion.

If we assume the $40-50 billion referred to in that last graf over two years corresponds to the $100 billion referenced earlier, (And it's not even clear from the wording "another provision ..." that it should or shouldn't be the $100 billion referred to earlier) then
  • you go from $240-$250 billion over two years (assuming the $140-$150b individual cut is spread over the two) to
  • $380-$400b (assuming the $140-$150b is a yearly figure).
And then that odd wording "a one-year tax credit over two years" ....

Sounds like a calculator and some further editing were needed on this, or am I missing something?

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