A regular commenter on this site, Kevin Corcoran, sent me the writeup below. I thought it was so good that I asked his permission to post it. He granted it. Here it is.
I was thinking the other day about how people prefer to frame issues, and how that can either clarify or distort our thinking. People can react very differently to statements or suggestions depending on how you frame them, so getting the framing right matters both rhetorically in making your case persuasive and intellectually in making your case honestly and accurately.
One common framing device that the left uses is to use “taking less” as the literal equivalent of “actively giving.” How common is it to hear, for example, a statement like “This tax plan will give billions of dollars to the top 1% and to giant corporations”? This is certainly phrased that way for rhetorical effect, to make the case against the hypothetical tax plan seem more persuasive. The government is going to give money to already wealthy people!? Who could support that? And in some scenarios, there’s even an element of truth. Corporate welfare is a real thing, and the government often does give large amounts of taxpayer money directly to wealthy corporations. That is something libertarians and leftists can jointly oppose.
But describing cases of sending someone a lower tax bill as the literal equivalent of cutting them a check is egregiously misleading. Am I tilting at a windmill, because obviously everyone knows the difference? No. At least one member of Congress does not. Alexandria Ocasio-Cortez was very vocal in opposing the building of a second Amazon HQ in her district, in part because of the tax breaks Amazon would have gotten. These were tax breaks, not direct subsidies or cash transfers. If Amazon had always existed there, it would have generated $30 billion in state and local taxes. But the government, as an incentive for Amazon to establish a new headquarters in her district, was offering to cut Amazon’s taxes by $3 billion out of the $30 billion. According to leftist rhetoric, this means New York would have engaged in the outrageous act of “giving” $3 billion to Amazon, one of the wealthiest companies in the world. When Amazon eventually decided not to locate there, AOC had this to say: “If we’re willing to give away $3 billion for this deal, we could invest those $3 billion in our district if we wanted to. We could hire out more teachers, we can fix our subways. We can put a lot of people to work for that money if we wanted to.”
But “that money” she’s talking about didn’t actually exist. She seemed to genuinely believe that by keeping the Amazon HQ out of her district and, therefore, not “giving” Amazon $3 billion, the state will now have an extra $3 billion available to provide all these services. But that’s not true. By keeping Amazon away, it will now have 27 billion fewer dollars to do all of these things. Achieving your goals requires an accurate understanding of how the world works, and by inaccurately framing “taking away less” as the literal equivalent of “actively giving,” leftists make it more difficult for themselves to achieve the goals they claim to seek.
Anyway, those are just some Monday morning musings. It’s back to work for me – this SQL code will not write itself, much to my chagrin.
Well said, Kevin. The AOC example drives home the point that framing can mislead even the framer.
READER COMMENTS
Rob Rawlings
Feb 21 2022 at 10:16pm
Its not totally correct to say that ‘By keeping Amazon away, it will now have 27 billion fewer dollars to do all of these things’. Some or all of the resources that Amazon decided not to hire would been hired by other employers and would have generated tax income for the state that would probably offset some of the potential loss from Amazon.
In fact, if alternative employers had hired all the resources that Amazon failed to hire and this generated as much (or more) taxable income than Amazon would have generated then AOC’s point would have merit – offering tax breaks to preferred employers would really be reducing state revenue with no obvious offsetting benefits!
Thomas Strenge
Feb 22 2022 at 7:17am
AOC received her degree in economics from Boston University. Just in case you know anyone else who thinks about attending that program.
Matthias
Feb 25 2022 at 10:45pm
Keep in mind that politicians say lots of things they know to be untrue.
Just like Krugman’s punditry doesn’t mean he’s actually bad at economics.
Vivian Darkbloom
Feb 22 2022 at 7:32am
Here’s an article, the headline of which seems at first glance to fall into the same framing trap:
https://www.marketwatch.com/story/what-amazons-hq2-means-for-taxpayers-in-new-york-and-virginia-2018-11-14
However, after reading several sources about the details of the proposed deal with Amazon, I’ve concluded that the situation is not very simple to “frame”. The proposed deal between Amazon and New York (Queens) included not only “tax breaks” but also “capital grants”. The latter were said to be about $500 million. And, the tax breaks promised Amazon were said to be mostly *refundable* credits. That is, Amazon would have gotten a cash payment whether or not it reported taxable income. So, the proposed deal wasn’t simply to “cut taxes” as Kevin Corcoran has “framed” it. And, it’s hard to judge how that $30 billion revenue estimate was made. It appears to have included payroll and other multiplier effects from hiring 30,000 employees.
It’s quite possible, even likely, that Queens would have benefitted overall from the proposed deal with Amazon. However, framing aside, these sort of deals should be opposed on policy grounds. The proposed deal (and others like it) give Amazon an unfair advantage over potential competitors. Tax laws should be written and administered to treat all businesses the same regardless of size. This applies equally to preferences given to small businesses through agencies such as the SBA even though these are applied more evenly and objectively than the negotiated sweetheart deal with Amazon..
Alan Goldhammer
Feb 22 2022 at 8:57am
+1 to what Vivian has written. We are beginning to see the same thing happen down here as the Washington Football Team (newly named the ‘Comanders’) wants to leave their current privately built stadium for a “greater” one built with public funds. We’ll soon sea a bidding war between DC, Maryland, and Virginia as to which area can soak its taxpayers and get an under performing sports franchise.
Kevin Corcoran
Feb 22 2022 at 10:18am
Vivian –
First, thank you for bringing this up – I definitely ought to have double checked the details of the arrangement rather than relying solely on my memory in describing it. Particularly with regards to the capital grants, you are unambiguously correct – I was off base there. While I still maintain my point that it’s misleading to frame taking less in taxes as the same thing as actively giving, as if often done, the capital grants angle is an important difference.
As an aside, when you write “Tax laws should be written and administered to treat all businesses the same regardless of size,” the article you bring up also points out that the largest portions of the Amazon deal would have come through programs that are available to businesses more generally and were not made for Amazon specifically, like the Relocation and Employment Assistance Program, which one of the linked articles notes “The REAP benefit, however, is an as-of-right program, and is available to any company that relocates an office to the approved areas.”
Thank you again for pointing out the grants angle!
zeke5123
Feb 22 2022 at 10:21am
I agree with one caveat — the rules should not be so onerous that in order to actually function tax concessions are given out as inducements. But that, I understand, is common practice in NYC development. Which leads to massive potential for corruption and of course heavily distorts the market but does increase City power.
Broaden the base, shrink the rate.
steve
Feb 22 2022 at 12:56pm
I thought citing AOC was a good example of framing. If you read left wing sites you dont see her mentioned much. She is a junior member of the party without a lot of clout. You do see her talked about a lot on the right. Invoking her name is framing whatever follows so that a sympathetic audience agrees. The left also has their triggers. Gaetz, MTG, Cawthorn and a few others serve the same purpose.
Once you invoke AOC then you really dont need to do the real analysis of the Amazon deal. It was clearly wrong. Good on Vivian for being able to look past the framing.
Steve
robc
Feb 22 2022 at 1:51pm
Depends how far left. The further left you go, the more you see AOC mentioned. Mainstream, center-left, not so much. Progressive left, yep.
Jon Murphy
Feb 22 2022 at 2:16pm
AOC isn’t the framing device. The post is about comments she made. It’s a response to her, not a framing.
steve
Feb 22 2022 at 7:44pm
A distinction without much difference. Suppose you said some person/politician make those claims rather than naming AOC. I think you get better analysis. Take Trump (please). Suppose you tried to analyze anything he proposed on immigration, taxes, pretty much anything. Analysis stops. Fanboys automatically support it, even if they opposed in the recent past what he proposed, and the liberals oppose it just because he said it. Same goes for Hillary, though maybe not quite as bad.
Steve
Jon Murphy
Feb 22 2022 at 8:24pm
I agree some will do that. But that’s shallow thinking. Analysis doesn;t start with those folks, so it cannot stop.
So, again, it’s not framing. It’s quoting.
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