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Tuesday, October 3, 2000 - Page updated at 12:00 AM

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FACTS ABOUT `FACTS' YOU MIGHT HEAR IN DEBATE

The Washington Post

When Al Gore and George W. Bush meet tonight, each will be armed with an arsenal of "facts" - statistics and assertions designed to bolster his case or harm his opponent.

Many of these facts appear impressive at first glance but less so on closer inspection.

Here is a guide to some claims Gore and Bush have made about domestic policy in the campaign.

The economy

In addition to pointing out the nation's low unemployment and mild inflation rates, Gore repeatedly contrasts the Clinton-Gore record with the economy under Bush's father, President George Bush. "When President Clinton and I took office, we had triple-dip recession in this country. It was a mess," Gore says.

On several levels, this is incorrect. First, the 1990-91 recession had already been declared over by the National Bureau of Economic Research, which dates business cycles, before Clinton took office in January 1993. And it was one of the country's short est and mild est.

In a "triple-dip recession," growth twice stalls or turns negative after a recession has supposedly ended. Unemployment rose after the Bush recession ended in 1991, causing some speculation during the 1992 campaign that the nation might be entering a triple-dip recession. But it didn't happen.

Taxes

Bush says a tax cut is necessary because "federal taxes are the highest they have ever been during peacetime." This is technically true, if you divide tax revenue into the nation's gross domestic product. According to the Clinton administration's latest budget, anticipated federal-tax revenue from both corporate and personal taxes will represent 20.4 percent of gross domestic product this year, which is the highest since 1945.

But that fact doesn't say much about the tax burden. The booming economy has added 12 million jobs to the work force, boosting tax revenue. Increased capital-gains revenue from the soaring stock market also has added to tax coffers. Yet the gross domestic product, the broadest measure of the economy, does not include capital-gains income, thus overstating the impact of taxes on stock sales.

Meanwhile, tax cuts passed under Presidents Reagan and Clinton have slashed the federal income-tax burden for many Americans. More than one-third of eligible taxpayers pay no federal income taxes. And a family of four, with median income of $54,900, pays less than 10 percent of income in federal taxes, the lowest level in 35 years, according to the Treasury Department. (Payroll taxes and some state income taxes, however, have risen in the same period.)

Who pays federal income taxes? About 80 percent of those taxes are paid by the richest fifth of the population - and about 30 percent of the taxes are paid by the richest 1 percent, according to the Congressional Budget Office (CBO).

Bush is fond of declaring, "I believe, as a matter of principle, that no one in America should pay more than one-third of his or her income to the federal government." But virtually no one pays that much, including many people making more than $1 million.

Gore uses that same data to make his own misleading claims about Bush's tax plan. Gore has said the average family could buy only a diet Coke a day with Bush's tax cut - a statistic that assumes the average family makes only $19,500 a year.

Gore regularly thunders that "I will not stand for a massive tax cut for the wealthy at the expense of the rest of the economy." But because the rich pay most taxes, they naturally would end up with most of the cuts under any across-the-board plan such as Bush's.

Some of the disputes are rooted in distinctly different tax philosophies. The Bush campaign says 50 million Americans won't get relief from Gore's targeted tax cuts, but that figure is reached by counting half of Gore's cuts as spending programs, a debatable point. The Gore campaign says Bush would give no relief to 30 million Americans who have no income-tax liability - yet would get tax refunds from Gore - but Bush advisers consider that a form of welfare.

The federal budget

Both candidates try to take the $2 trillion federal budget down to the one-dollar level by way of explaining it, but somehow they lose a few pennies along the way.

Gore, for instance, says, "We will take one out of every six dollars of the budget surplus and put it aside, so it won't be spent." This is a fancy way of saying there are two estimates of the budget surplus - a higher one by the CBO and a lower one by the White House - and Gore is using the lower one to craft his budget. But budget estimates change every few months - and Gore is mostly talking about money that won't materialize until 2009 and 2010, after the end of his hypothetical second term.

Bush takes dollar bills out of his pocket when he informs audiences that he has a "detailed plan that includes tax relief, and leaves three out of every four dollars of the surplus for urgent priorities."

Actually, Bush's tax plan ($1.6 trillion, including interest costs over the next nine years) eats up about one of every three dollars - and it uses up almost all of the surplus that counts, the non-Social Security surplus.

Copyright (c) 2000 Seattle Times Company, All Rights Reserved.

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