Interpreting "Facts"

Facts are supposed to be hard, real things. Like the famous rock that Dr. Samuel Johnson kicked to disprove the philosophical idealism of Bishop Berkeley (note: idealism is the rejection of "realism", that things are "out there" independent of us, in favour of the belief that reality is "in the mind", and in Bishop Berkeley's case, reality is what is in God's mind).

Here is a "fact" presented on R. J. Rummel's blog A Freedomist's View:

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Rummel uses this graph to identify a "factual" problem: there are too many "free riders", i.e. people who are not paying taxes:

With so many serious dangers to our democracy – Obama’s far left socialists, a possible leftist coup, an EMP attack, global islamofascism, it seems a stretch to include our tax system also as a danger. It is. Consider that 47% of “taxpayers,” 71,000,000 people will pay no income tax in 2009. Zero.

Worse. Many of these people are eligible for a “negative income tax.” That is, the federal government will give them one refundable tax break, rebate, or another.

Wow! That is stunning. I accept the graph as a fact, but I find the "factual conclusion" bizarre. When I look at this graph and realize that taxes have more than doubled while income has barely grown, that raises a puzzle: Doesn't that mean the tax burden has increased? But how can this be since this overlies the "Reagan revolution" and many Republican and Democratic administrations that have proudly beat their chest about "tax cuts".

If you look at the Wikipedia article on the US economy, you can find a graph that real (constant dollar) increase in per capita GDP has more than doubled during time period 1970-2007 used in Rummel's chart. Rummel shows incomes up by 32% but Wikipedia shows that per capita GDP is up by over 200%. How can this be?

Statistics! Rummel is using the "median" and Wikipedia is using "average". Think of a bar in Seattle with 20 guys drinking that each make $30,000 per year. Their average income is $30,000 and the median income is $30,000. In walks Bill Gates making $4 billion a year. Now the average income is $200 million but the median income remains $30,000.

What these two charts show is that most people's wages, those in the bottom 90%, barely grew from 1970-2007. But the top 10% grew spectacularly and the top 0.1% grew astronomically, so they are like Bill Gates walking into the bar.

Rummel looks at the growth in US government spending versus median income and decides "there are too many free loaders". I look at the barely changed median versus the more than doubled "average" and immediately conclude that the ultra-rich took the lion's share of income gains so distribution of income & wealth has been very unfair. Sure government spending is up, but because "average" income more than doubled over this same period, government income kept track and doubled as well. So there isn't any "bloated" government. There are simply more people pushed to the margins as incomes of the ultra-rich have sky-rocketed.

Funny how "facts" appear different from different perspectives. Somebody might look at that Seattle bar where the "average" patron was making $200 million and figure that workers in Seattle were overpaid. But if they look at the "median" patron and see that he is only getting $30,000, they will have a different viewpoint. Those workers aren't overpaid, they have below national average wages!

It is very, very important when dealing with "real" facts that you look at different points of view so that you don't get snookered into believing some "fact" is something other than what it is. Rummel's graph is not "proof" that too many people are "free riding" government. It is evidence that income distribution in America from 1970-2007 has been severely distorted with almost all gains going to the ultra-rich.

In closing, I should note that while I have great distate for Rummel's right wing politics, I respect Rummel's work on "democide" I encourage people to look at his web page on 20th Century Democide. He has done valuable work in pointing out the evils of state-sponsored murder. But at the same time, I caution people that Rummel is a bit of a right wing nut, so when he gets on his hobby horse about "free riders" not paying tax, be cautious.

I would love to see America rich enough so that everybody had the income to pay taxes, but sadly, the country has undergone a right wing revolution that has allowed the rich to become fabulously wealthy while the poor stayed poor. To expect the poor to "pay their fair share" when the rich are romping off with truly mind-boggling incomes and seeing their effective tax rate fall, this is putting the cart before the horse. Get the rich to pay their fair share, use that money to revive the economy, let the poor get jobs with better incomes, then they will be wealthy enough to pay taxes. Rummel's got things backwards and he's turned a blind eye to a historic injustice as the "Reagan revolution" that has allowed the rich to offload the cost of government onto the bottom 99% of the population!