“Republicans have finally found a group they want to tax: poor people.”
The Wall Street Journal asked former Utah Governor and Presidential candidate Jon Huntsman if working poor families and seniors should be brought onto the income tax rolls. He agreed, saying that,
“we don’t have enough people paying taxes in this country.”
Texas gunman and Presidential candidate Rick Perry agrees,
“we’re dismayed at the injustice that nearly half of all Americans don’t even pay any income tax.”
Michelle Bachmann had similar comments, adding,
“We need to broaden the base so that everybody pays something,”
Fox News’ Fox & Friends business host Stuart Varney reported:
“Yes, 47 percent of households pay not a single dime in taxes. And some of those households actually make a profit from the Treasury.”
In fact, writes Pulitzer Prize winner New York Times writer, David Leonhardt,
“47 percent has become shorthand for the notion that the wealthy face a much higher tax burden than they once did while growing numbers of Americans are effectively on the dole.
“Neither one of those ideas is true. They rely on a cleverly selective reading of the facts. So does the 47 percent number.
“. . . Over the last 30 years, rates have fallen more for the wealthy, and especially the very wealthy, than for any other group. At the same time, their incomes have soared, and the incomes of most workers have grown only moderately faster than inflation.
“So a much greater share of income is now concentrated at the top of distribution, while each dollar there is taxed less than it once was.
“. . . the modifiers here — federal and income — are important. Income taxes aren’t the only kind of federal taxes that people pay. There are also payroll taxes and investment taxes, among others. And, of course, people pay state and local taxes, too.
“Even if the discussion is restricted to federal taxes (for which the statistics are better), a vast majority of households end up paying federal taxes. Congressional Budget Office data suggests that, at most, about 10 percent of all households pay no net federal taxes. The number 10 is obviously a lot smaller than 47.
“. . . These numbers fail to account for the income that is hidden from tax collectors — a practice, research shows, that is more common among affluent families. “Because higher-income people are understating their income,” Joel Slemrod, a tax scholar at the University of Michigan, says, “We’ve been overstating their average tax rates.”
“State and local taxes, meanwhile, may actually be regressive. That is, middle-class and poor families may face higher tax rates than the wealthy. As Kim Rueben of the Tax Policy Center notes, state and local income taxes and property taxes are less progressive than federal taxes, while sales taxes end up being regressive. The typical family pays a lot of state and local taxes, too — almost half as much as in federal taxes. . . “