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The ‘Fiscal Cliff’ explained in charts
 A critical review of a recent gallery of charts
           from the Washington Post

Jonathan A. Schwabish
jschwabi@yahoo.com
@jschwabish
The Set Up
For a few weeks now, the Washington
Post has posted a gallery of charts to help
explain what is meant by the ‘Fiscal Cliff’:
http://goo.gl/V46U6

Although the 7 charts are a collection of
simple bar charts, from a data
visualization perspective they leave a lot
to be desired
The Challenge
This slide deck contains my redesign of all 7
charts.
I followed 5 basic rules:
1. Use the actual data
2. Do not overly modify text or labels
3. Use a single color scheme and font
4. Only use Microsoft Excel
5. Apply good data visualization principles
Use the Actual Data
(and do not add extra data elements)

Except for Slide #6—”Sequester cuts to
the FEMA budget”—all of the data were
either available on the source websites or
in the gallery itself (for slide #6, I eyeballed the
values)
Do not overly modify text or labels
(unless absolutely necessary)

Even though some of the labels were
shorthand or incomplete, the objective of
the challenge was to improve the
visualizations, not correct syntax
Use a single color scheme and font
The gallery is a collection of charts from
multiple sources (4 appear to have been
made directly by Post staff) so the color
schemes vary as do the fonts

A single design scheme can improve the
appearance and clarity of the gallery
(I use the ‘Corbel’ throughout)
Only use Microsoft Excel

Because many people use Excel
extensively, I wanted to show that
creating quality data visualization does
not require complex software or
knowledge of programming languages
Apply good Data Visualization
Principles
My redesigns incorporate simple
strategies:
   • keep data and labels close together
   • deemphasize tick marks, gridlines,
     axes (i.e., ‘chartjunk’)
   • where possible, include data directly
     on the chart
Final Notes
Each of the redesigned charts is preceded by a
copy of the original chart, either from the
source website or as a screen shot from the
Washington Post (hence the blurriness in some
of the images)

These redesigns are a start. Please feel free to
add comments to this SlideShare page or
contact me directly with thoughts, critiques,
or suggestions
A Detailed Parenthetical
I just wanted to insert a detailed note about the first two charts from
the Tax Policy Center (TPC). In the first chart, I chose to focus on the
distributional analysis and sacrifice the imagery of the rising average
federal tax rate as incomes rise (that is, the height of the bars). I didn’t
get much of the distributional story from the original TPC
distributional chart because it was just a mess of stacks and colors. The
second chart—Average Federal Tax Rates by Income Quintile—tells me
that basic story more clearly anyways. An alternative approach would
be to use several small charts (‘small multiples’) and stack them
together in some way, but I chose to stick to the spirit of the challenge
and only redesign the single chart. Plus, had TPC made a series of
small charts, it’s not clear to me the Washington Post would have
picked it up.
The ‘Fiscal Cliff’
Explained in Charts
Fiscal Cliff Components
 (Percentage)

                AMT Patch



  2001-03 low/middle cuts



                Estate Tax



                Extenders



          Stimulus Credits



   2001- High Income cuts


2003 - High Income capital
       gains and dividends


      Health reform taxes



                Payroll Tax

                              Lowest   Second     Middle   Fourth   Highest   80-99%   Top 1%   All
                                                Quintile
Average Federal Tax Rate, by Cash Income Percentile, 2013
(Percent)

40

                                                  Increase due to tax changes

                                                                                 7.2


                                                                    Baseline
30
                                            5.8

                                                                       5.1


                                                                                         5.0
20                                 4.2


                          3.8                                                    31.2

                                           25.2
                                                                       22.8
10                4.1                                                                    19.4
                                   17.4
                         14.0

                  8.0
            3.7

 0          0.6
       Lowest     2nd   Middle     4th    Highest                    80-99%     Top 1%   All
                        Quintile
Size of Components of the "Fiscal Cliff"
(Billions of dollars)



                         Bush Tax Cuts                                                   221



                        Payroll Tax Cut                                95



                  Debt Ceiling Deal                               65



                           AMT/Other                              65



Unemployment Benefit Expansion                          26



                            ACA Taxes              18



                "Doc fix" expiration          11


                                          0                  50        100   150   200         250
Marginal Tax Rate Increase Under the Fiscal Cliff, by Income Bracket
 (Percent)

Thousand
               <10                                                           64.4
dollar
increments

              10-20                                  26.5


              20-30             5.6


             30-40        2.8


             40-50        2.2


              50-75                   7.8


             75-100                          16.7


         100-200                       8.5


         200-500                6.2


       500-1,000                                     26.2


             >1,000                          16.4

                      0                10       20      30   40   50    60          70
Economic Impact of Fiscal Cliff, Zandi Multipliers
(Billions of dollars)

500


           435
                        Budget Impact
                        Economic Impact
400




300




                              201           196
200              181
                        158
                                      150
                                                    130


100
                                                          69
                                                                  60
                                                                                 50
                                                                       29                   30
                                                                                      23         20

 0
           Tax Cuts     Sequester   Jobs Measures   AMT Patch   Tax Extenders   ACA Taxes   Doc Fix
Sequester Cuts to the FEMA Budget
(Millions of dollars)

600
                   580




400




200
                                       175




                                                                75


                                                                                         25                      25

   0
             Disaster Relief   State, local programs   Salaries and expenses   Emergency food, shelter   Flood hazard mapping
Effect on Fiscal Cliff Components on Deficit and GDP

                Effect on Deficit                                  Effect on GDP
                  (Billions of dollars)                              (Percentage)

                          24                   Payroll /UI
                                                                          0.4
                          40                 Bush cuts (high)


                          42              Bush cuts (low/middle)
                                                                          0.4


                                                                          0.1
                         108
                                              Nondefense


                                                                          0.7
Total Effect:                                                                       Total Effect:
 $503 billion                                                                          2.9%




                         288                     Defense

                                                                          1.3
Contact me

www.slideshare.net/jschwabish
   jschwabi@yahoo.com
        @jschwabish

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The 'Fiscal Cliff' explained in charts

  • 1. The ‘Fiscal Cliff’ explained in charts A critical review of a recent gallery of charts from the Washington Post Jonathan A. Schwabish jschwabi@yahoo.com @jschwabish
  • 2. The Set Up For a few weeks now, the Washington Post has posted a gallery of charts to help explain what is meant by the ‘Fiscal Cliff’: http://goo.gl/V46U6 Although the 7 charts are a collection of simple bar charts, from a data visualization perspective they leave a lot to be desired
  • 3. The Challenge This slide deck contains my redesign of all 7 charts. I followed 5 basic rules: 1. Use the actual data 2. Do not overly modify text or labels 3. Use a single color scheme and font 4. Only use Microsoft Excel 5. Apply good data visualization principles
  • 4. Use the Actual Data (and do not add extra data elements) Except for Slide #6—”Sequester cuts to the FEMA budget”—all of the data were either available on the source websites or in the gallery itself (for slide #6, I eyeballed the values)
  • 5. Do not overly modify text or labels (unless absolutely necessary) Even though some of the labels were shorthand or incomplete, the objective of the challenge was to improve the visualizations, not correct syntax
  • 6. Use a single color scheme and font The gallery is a collection of charts from multiple sources (4 appear to have been made directly by Post staff) so the color schemes vary as do the fonts A single design scheme can improve the appearance and clarity of the gallery (I use the ‘Corbel’ throughout)
  • 7. Only use Microsoft Excel Because many people use Excel extensively, I wanted to show that creating quality data visualization does not require complex software or knowledge of programming languages
  • 8. Apply good Data Visualization Principles My redesigns incorporate simple strategies: • keep data and labels close together • deemphasize tick marks, gridlines, axes (i.e., ‘chartjunk’) • where possible, include data directly on the chart
  • 9. Final Notes Each of the redesigned charts is preceded by a copy of the original chart, either from the source website or as a screen shot from the Washington Post (hence the blurriness in some of the images) These redesigns are a start. Please feel free to add comments to this SlideShare page or contact me directly with thoughts, critiques, or suggestions
  • 10. A Detailed Parenthetical I just wanted to insert a detailed note about the first two charts from the Tax Policy Center (TPC). In the first chart, I chose to focus on the distributional analysis and sacrifice the imagery of the rising average federal tax rate as incomes rise (that is, the height of the bars). I didn’t get much of the distributional story from the original TPC distributional chart because it was just a mess of stacks and colors. The second chart—Average Federal Tax Rates by Income Quintile—tells me that basic story more clearly anyways. An alternative approach would be to use several small charts (‘small multiples’) and stack them together in some way, but I chose to stick to the spirit of the challenge and only redesign the single chart. Plus, had TPC made a series of small charts, it’s not clear to me the Washington Post would have picked it up.
  • 12.
  • 13. Fiscal Cliff Components (Percentage) AMT Patch 2001-03 low/middle cuts Estate Tax Extenders Stimulus Credits 2001- High Income cuts 2003 - High Income capital gains and dividends Health reform taxes Payroll Tax Lowest Second Middle Fourth Highest 80-99% Top 1% All Quintile
  • 14.
  • 15. Average Federal Tax Rate, by Cash Income Percentile, 2013 (Percent) 40 Increase due to tax changes 7.2 Baseline 30 5.8 5.1 5.0 20 4.2 3.8 31.2 25.2 22.8 10 4.1 19.4 17.4 14.0 8.0 3.7 0 0.6 Lowest 2nd Middle 4th Highest 80-99% Top 1% All Quintile
  • 16.
  • 17. Size of Components of the "Fiscal Cliff" (Billions of dollars) Bush Tax Cuts 221 Payroll Tax Cut 95 Debt Ceiling Deal 65 AMT/Other 65 Unemployment Benefit Expansion 26 ACA Taxes 18 "Doc fix" expiration 11 0 50 100 150 200 250
  • 18.
  • 19. Marginal Tax Rate Increase Under the Fiscal Cliff, by Income Bracket (Percent) Thousand <10 64.4 dollar increments 10-20 26.5 20-30 5.6 30-40 2.8 40-50 2.2 50-75 7.8 75-100 16.7 100-200 8.5 200-500 6.2 500-1,000 26.2 >1,000 16.4 0 10 20 30 40 50 60 70
  • 20.
  • 21. Economic Impact of Fiscal Cliff, Zandi Multipliers (Billions of dollars) 500 435 Budget Impact Economic Impact 400 300 201 196 200 181 158 150 130 100 69 60 50 29 30 23 20 0 Tax Cuts Sequester Jobs Measures AMT Patch Tax Extenders ACA Taxes Doc Fix
  • 22.
  • 23. Sequester Cuts to the FEMA Budget (Millions of dollars) 600 580 400 200 175 75 25 25 0 Disaster Relief State, local programs Salaries and expenses Emergency food, shelter Flood hazard mapping
  • 24.
  • 25. Effect on Fiscal Cliff Components on Deficit and GDP Effect on Deficit Effect on GDP (Billions of dollars) (Percentage) 24 Payroll /UI 0.4 40 Bush cuts (high) 42 Bush cuts (low/middle) 0.4 0.1 108 Nondefense 0.7 Total Effect: Total Effect: $503 billion 2.9% 288 Defense 1.3
  • 26. Contact me www.slideshare.net/jschwabish jschwabi@yahoo.com @jschwabish