Chart of the Day
May 27, 2011 2 Comments
There probably ought to be a blog that is dedicated to debunking the nonsense and distortion that the Republican party is spewing out on such a regular basis. At least when it comes to economic issues, we’ve got the Center on Budget Policies and Priorities to perpetually rise to the challenge. If only journalists took this stuff more seriously instead of treating it as “he said, she said” at best. Anyway, one of the technically accurate but hugely misleading tropes of late has been the whole, “most Americans don’t pay federal income taxes” business. CBPP eviscerates this argument and shows how incredibly misleading it is. Chait summarizes. First, the chart:
So, these tax freeloaders? Well, most of them are working and paying our not inconsiderable payroll taxes and the rest are disabled, unemployed, students, etc. But that’s the least of it. More:
- The 51 percent figure is an anomaly that reflects the unique circumstances of 2009, when the recession greatly swelled the number of Americans with low incomes and when temporary tax cuts created by the 2009 Recovery Act — including the “Making Work Pay” tax credit and an exclusion from tax of the first $2,400 in unemployment benefits — were in effect. Together, these developments removed millions of Americans from the federal income tax rolls. Both of these temporary tax measures have since expired. In a more typical year, 35 percent to 40 percent of households owe no federal income tax. In 2007, the figure was 37.9 percent.
- The 51 percent figure covers only the federal income tax and ignores the substantial amounts of other federal taxes — especially the payroll tax — that many of these households pay . As a result, it greatly overstates the share of households that do not pay any federal taxes. Data from the Urban Institute-Brookings Tax Policy Center show only about 14 percent of households paid neither federal income tax nor payroll tax in 2009, despite the high unemployment and temporary tax cuts that marked that year.
- Even these figures understate low-income households’ total tax burden, because these households also pay substantial state and local taxes. Data from the Institute on Taxation and Economic Policy show that the poorest fifth of households paid a stunning 12.3 percent of their incomes in state and local taxes in 2010.
- When all federal, state, and local taxes are taken into account,the bottom fifth of households paid 16.3 percent of their incomes in taxes, on average, in 2010. The second-poorest fifth paid 20.7 percent.
Looks a lot different when you look at it that way. Not that the Republican party or Fox news wants you to know. I seem to recall Ann Coulter once writing a book along the lines of How to Argue with a Liberal. The obvious answer? Lie.
[p.s. to Damon: looks like you and your Blackberry are the only ones having the issue with the long quote and there's nothing funny in the HTML code. Sorry!]