Saturday, October 01, 2011

Who pays taxes? — Right-wing propaganda vs. reality

Here are a few more points that should be widely familiar and uncontroversial but, unfortunately, need to be repeated over and over because of a constant stream of propaganda designed to obfuscate, evade, distort, and/or deny them. Is it really true that the wealthy (or, as they call them on Fox News, the "job creators") already pay a grossly disproportionate share of taxes? Actually, no. This clear and cogent explanation from Citizens for Tax Justice (below) does a good job of providing a necessary reality check.

Obviously, the source of these statistics has a polemical ax to grind. But the basic numbers are, broadly speaking, pretty solid and hard to dispute. It's mostly a matter of how one chooses to interpret them—or, more precisely, whether one pays serious attention to them or tries to ignore them and/or obscure their significance.

I've reproduced most of the text in this item, but I can't seem to copy the figures (a table and two graphs). If you want to see the whole thing, which I would recommend, go here.

—Jeff Weintraub

[Follow-up 10/30/2011: Who pays taxes (continued)]

Citizens for Tax Justice
Contact: Bob McIntyre | 202-299-1066 x22
April 15, 2011
America’s Tax System Is Not as Progressive as You Think

Conservative lawmakers and pundits often claim that the richest Americans are paying a disproportionate share of taxes while a huge number of lower-income Americans pay nothing at all. They’re wrong.

It’s true that the very rich pay a large share of federal income taxes [JW: this is a technical term that does not include "payroll taxes," which fund Social Security and Medicare, and which in the real world are also federal taxes paid on income], and that many taxpayers are too poor to owe any federal income taxes. But federal income taxes are only part of the picture. Other types of taxes, like federal payroll taxes, federal excise taxes, and state and local taxes are regressive, meaning they take a larger share of income from a poor or middle-class family than they take from a rich family.

• The share of total taxes paid by each income group is similar to the share of total income received by that group.

• The share of total taxes paid by the richest one percent (21.5) is not significantly different from the share of total income received by this group (20.3).

• The total effective tax rate for the richest one percent (30.0) is only about five percentage points higher than the total effective tax rate for the middle fifth of taxpayers (25.1).

All Americans pay taxes. Everyone who works pays federal payroll taxes. Everyone who drives pays federal and state gas taxes. State sales taxes affect everyone who shops, and state and local property taxes affect everyone who owns or rents a home (the tax is passed on to renters in the form of higher rents). Most states also have income taxes, most of which are not particularly progressive.

Many conservative lawmakers and pundits focus only on those federal taxes that affect the rich more, like the federal personal income tax, estate and gift tax and corporate income tax. But as these figures illustrate, the tax system as a whole, including all the types of taxes that people pay, is just barely progressive.

[JW: To see those two graphs, click HERE and go to the end of p. 2.]