You’ve no doubt heard that half of federal tax filers pay no income tax. That’s part of the argument that we shouldn’t raise taxes on the rich. It’s also part of a despise-the-poor argument, like the one made by Curtis Dubay, senior tax policy analyst at the conservative Heritage Foundation.
“We have 50 percent of people who are getting something for nothing.”
It’s true that the poor pay no federal income tax. But it’s also a lie—a big one.
The truth is the poor pay taxes at a rate nearly that of the rich—the reverse of the way we usually think of our tax system as “progressive.” They don’t pay federal income tax, it’s true. But they pay state and local taxes at a higher rate than the rich.
The Institute on Taxation and Economic Policy reports that the lowest 20% of earners pay 11% of their income in state and local sales, excise, property, and income taxes, while the top earners pay 5%.
To make matters worse the lowest 20% pay 8% in Social Security and Medicare taxes, while the rich pay under 1% (because income over $106,000 is exempt from these taxes.
When all taxes are considered the working poor pay 19% of their income, while the very rich pay 22%.
So if you think the poor are getting a free ride, you’re wrong. And if you’re a politician or a pundit and you say it, you’re telling a whopper.
Tags: Curtis Dubay, ethics, federal income tax, free ride, Heritage Foundation, Institute on Taxation and Economic Policy, Social Security and Medicare taxes, something for nothing, state and local taxes, taxes on the poor, very rich, working poor
Ethics Bob 
September 1, 2011 at 3:44 pm |
They are still getting a free ride. They don’t pay for the military, or federal roads, or federal regulations, or environmental controls, or meat inspection, or the diplomatic corps or the CIA or the House or the Senate or many other things that they get the advantage of.
The citing of the 50% figure is in response to fatuous “fairness” bombast. If we think the upper income levels (which are not all “rich”) should pay more taxes, fine—I don’t see any way out of it.
But don’t say they aren’t already paying a fair share. And to maintain that ZERO is a fair share for 50% of the public to pay for the federal government isn’t a lie—it’s just beyond belief. And it suggests that these people owe nothing—not even gratitude, for their free ride…which is EXACTLY what it is.
September 1, 2011 at 3:53 pm |
Then the rich are getting a free ride–They don’t pay for police, fire, street maintenance or schools.
Really, the idea of a free ride conflicts with my view, at least, of community. It means that people who can afford to help lend a hand to people who need it. Thus, long-term unemployment, medicaid, ERs, special classes for children with special needs.
I think Buffett is right–the rich are undertaxed. It’s wrong to suggest–as many on the right do–that the poor pay no taxes. It’s a deceptive half-truth.