Economy

$100 Goes Much Further in Mississippi? Perhaps We Should Consider the Source (Hint: Koch)

The Koch-funded Tax Foundation has lied to us in the past, so why is the media giving them a pass?

Photo Credit: Andy Dean Photography/Shutterstock

This week, online, print, and broadcast media outlets — from NBC News to Consumerist — fell over themselves to lend legitimacy to a map that shows the value of $100 in each of the 50 states and Washington, D.C. However, they're not telling their readers and viewers much about The Tax Foundation, the libertarian think tank behind the map. None of these publications questioned the group's corporate and political ties, and dubious history of spreading misinformation in the media.

The foundation's map attempts to paint several red states as economic paradises, with Mississippi, Kansas and North Dakota shaming California, Maryland and New York in terms of affordability. Using one of their examples: In Tennessee $100 will buy what would cost $110.25 in another states that are closer to the national average. So, the Tax Foundation concludes, "you can think of this as meaning that Tennesseans are about ten percent richer than their nominal incomes suggest."

But it turns out that the Tax Foundation is a think tank that is largely funded by ExxonMobil and the Koch Family Foundations. It also has close ties the American Legislative Exchange Council (ALEC), as its president, Scott A. Hodge, and vice president, Joe Henchman have been featured speakers at the conservative bill mill's events. Hodge also worked at the Heritage Foundation for 10 years and is a founder of the Heartland Institute, another Koch-funded organization famous for disseminating climate-change denial and second-hand smoke misinformation. Henchman has is active in several libertarian activist organizations and was trained in non-profit management through the Koch Associate Program. 

The foundation is generally critical of tax increases, high corporate taxes, and "sin" taxes. In the past, the Tax Foundation has praised Rep. Paul Ryan's plans to slash federal spending on the backs of the poor. It has also sought to prove that green-energy tax incentives don't work and that carbon cap-and-trade is a hidden tax.

Economist and New York Times columnist Paul Krugman has declared that the Tax Foundation is "not a reliable source" while criticizing a report by it prepared that compared U.S. corporate tax rates to those in other countries in 2008. Later, Krugman accused the foundation of "deliberate fraud" and applying "fuzzy math" after the organization attempted to downplay the effect that the "Buffet Rule" would have on the shrinking the federal deficit. 

In 2008, the Center on Budget and Policy Priorities — an economic think tank with a more respectable reputation — called a a similar report by the Tax Foundation "unreliable" and stated "the fact that the Tax Foundation revises its results with such frequency calls into question how robust its methodology is — and how seriously the estimates should be taken."

Here's the Tax Foundation's new hit graphic, which you should view with a healthy dose of skepticism:

Cliff Weathers is a former AlterNet senior editor who has been an award-winning writer, editor, political commentator and multimedia producer for more than three decades. He served as deputy editor of Consumer Reports for 10 years, focusing on automotive reliability, green technologies and product safety. At his former blog, Left of the Hudson and later at AlterNet, Cliff documented how communities and the environment are impacted by fracking and other extreme forms of fossil fuel extraction. Writing for AlterNet in early 2014, he was one of the first journalists to sound the alarm over the extreme dangers of shipping volatile Bakken crude oil by rail. His articles on technology, green cars, alternative energy and sustainability have appeared in several publications, including Car and Driver, Playboy, Salon and Raw Story.

Cliff graduated from Oakland University in suburban Detroit, where he was a journalism major. A Michigan native, Cliff came to New York in 1995 and resides in South Nyack. Follow him on Twitter @cliffweathers.