'Honest' Obama Ad a Lie

The Washington Post Fact Checker is all excited because it says the Obama campaign has released an attack ad - hitting Romney on his effective federal income tax rate - that's not a lie. I would share the excitement if it was true.

The ad says “chances are you pay a higher rate” and that Romney’s 14 percent rate is “probably less than you” pay. Most people pay relatively little in individual income taxes, but (unlike Romney) also contribute a good portion of their income to payroll taxes (such as Social Security and Medicare).

Hang on a sec - since when do payroll taxes get included in the tax rate calculation?

According to the nonpartisan Tax Policy Center, the effective rate for the middle 20 percent is 15.5 percent, including all payroll taxes. That is higher than Romney’s 13.9 percent rate, so there is more than a 50-50 chance that a person’s rate would be higher than Romney’s tax rate. (As we have noted, the numbers are more favorable to Romney if you exclude payroll taxes paid by employers.)

The big trick in demonizing Mitt is to compare his effective tax rate (14 %) to what people think their income tax rate is. According to the chart the Fact Checker sends us to, the middle 20% of Americans pay an effective income tax rate of 4.1%. Payroll taxes do not fall under the definition of 'federal income tax rate.'

It's also worth noting that, for 40% of taxpayers, the federal income tax rate is negative - ie, their taxes aren't taxes at all, they're a social program.