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Wednesday, February 8, 2012

Is it true that the poor pay no taxes?

Lucky Duckies

One of the more reprehensible things that conservatives have come out with of late is the idea of the ‘lucky duckies.’
This is what the Wall St Journal’s op-ed page called those of our society who are ‘fortunate’  enough to make such a low salary that they don’t have to pay fed income taxes.
This is truly verging (has crossed into?) Newspeak. You know, 1984–war is peace, freedom is slavery etc…)



In most people’s minds, getting stuck in a job that makes you $20k a year is the opposite of  ’fortunate’.  And if those WSJ writers think these folks are so lucky, all they have to do is quit their cushy office job and stand on their feet 8 hours a day flipping burgers.
Lucky duckies, indeed.
[ Pre-emptive strike: the idea is that these people have no 'skin in the game', so they don't care about tax rates because it's so hard to make ends meet on $250k per year,  yadda yadda.  Utter nonsense.  Give me the $250k, I'll pay the 39% tax rate from the Clinton years, and still be waaaaaaayyyyy ahead of where I am now.  And so would most of you reading this. ]
So far, this has been standard class warfare stuff as waged by the 1%. True, people in the bottom half don’t make enough to pay fed taxes.  Think about that: almost half the country, by conservatives own reckoning, don’t make enough to pay fed taxes. Is the problem that their a) tax rate is too low;  or, b) that their salary is too low?
If you’re a conservative, the answer cannot be (a), because tax rates are NEVER low enough.
And yet, that’s what they’re saying. That tax rates on the bottom half of the country have to go UP. While tax rates on the top 1% have to go DOWN.  Talk about internally inconsistent.
Or, it would be if they actually cared about being logical. Or consistent. They don’t. They only care about waging class warfare against everyone who’s not part of the 1%.
What truly takes this distortion to another level, and makes it reprehensible is the way it looks at a tiny sliver of the situation, cherry-picks what suits their cause, then ignores the rest.
The fact is, this lower 47% that pays no fed income tax, pays plenty of other taxes. Payroll tax, which is hugely regressive since it’s capped at around $100k (may be higher; it moves with inflation), sales taxes (also hugely regressive) excise taxes, state taxes, local taxes, and so on.
What happens when we factor all of these in?

This is a chart done by the Corporation for Enterprise Development. It shows what the total, overall tax rate is for all income quintiles by state.  It shows how much of their income the poorest 20% pays, vs how much of their income the top 1% pays in each state, then shows the ratio between the two.
The median state is Mississippi. The poorest 20% pay about 10.8% of their total income in taxes. The top 1%, OTOH, only pay 5.5% of their income.
In other words, the effective tax rate of the bottom 20% is about twice as high as the tax rate for the top 1% despite paying no fed taxes.
And how does RI stack up? We’re worse.
Here, the bottom 20% pays about 11.9%, while the top 1% pays 5.5%.
In other words, the bottom 20% pays a rate that is more than twice the rate paid by the top 1%.

And Mass is two spots worse, CT is one spot better, so spare me the “Oh, I could just move to Mass and save all this money” lie.  And founder of a certain ‘alternative’ party, I’m looking at you.
What does this mean? The top end earners are not overtaxed. They have a great gig going. And if we elect someone named either Willard or Newt, it will only get better for them, and much, much worse for the rest of us.
Lucky duckies, indeed.

4 comments:

  1. Interesting he should add "What truly takes this distortion to another level, and makes it reprehensible is the way it looks at a tiny sliver of the situation, cherry-picks what suits their cause, then ignores the rest."

    Sounds like exactly what he's saying. I'd like to say it's just another Liberal running off at the mouth for fun, but that would be complementary. This guy is not a liberal, he's a radical with a cross to bear and is so deep into class warfare that he defines his own version of it.
    I thought Carl Rove was a bit over the top but he's a screaming liberal compared to this guy.

    ReplyDelete
  2. Davespop - do you have anything, anything at all, to back up your remarks? I know that the idea that the poor actually DO pay taxes runs contrary to the right-wing common wisdom of the moment - and sure makes a nice distraction from increasing public demand that the rich pay their fair share - but show us what you've got.

    ReplyDelete
  3. I just want to point out (and I'll put it on RI future too) that this table is not ALL taxes. It's only supposed to show state and local taxes.

    Reference: http://scorecard.assetsandopportunity.org/2012/measure/tax-burden-by-income

    also, I believe that there are multiple reasons for no federal incomes taxes for over 45% of filers: one is the recession, of course, another is some of the big tax credits available to middle class people -- the child tax credit, a big college tax credit that came in the stimulus bill. Another is the Bush tax cuts -- which took millions and millions from a 15% tax bracket to a 10% bracket.


    David

    ReplyDelete
  4. Dear David C. or Davespop or whatever other secret identity you use - I don't get your point. Your link leads to exactly the same source used by Krell. The only difference is that on the page you link to, the states are listed alphabetically, while Krell used another chart with the same data, only with the states listed in order of rank.

    Davespop brings a fusillade of right-wing insults and David C., upon being challenged, the same data as the author, but adds some interpretation without substantiation.

    I don't know which is worse: the cowardly use of pseudonyms or the dishonest use of data.

    ReplyDelete

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