3 Reasons the Claim “Half of Americans Don’t Pay any Income Tax” is Bogus

In a recent post, a comment was made by ‘Chris,’ who makes the claim, “nearly 50% of Americans… do not pay an income tax.” This line has become a standard talking point for right-wing politicians, pundits, and Fox News enthusiasts. It has been circulating for a couple of years now, in part because it is ‘true’ (yes, the claim is technically true, not denying that), but also because it plays into the conservative narrative that the downfall of this country is due to free loaders who are dependent on government.

The first problem with this line is many times it leads to people, sometimes ‘important’ people like Sean Hannity, claiming that half of Americans pay no taxes at all.  That is just patently untrue – simply red meat for his conservative base.

This leads to a second problem because implying a certain group of people do not pay any taxes only perpetrates the belief that those in poverty just want handouts and are not paying their fair share. This false belief turns a blind eye to the fact that there are more taxes than just the income tax. The income tax happens to be a very progressive tax. So it does not affect low-income people as much as high earners, but by no means does it follow that they do not pay their fair share.

 

 

 

 

 

 

This graph shows the effective tax rate paid by each income group. We see even those at the bottom still pay an effective tax rate of 17.4 percent. Yes, higher earners pay more (not by much), but the idea that low-income people are free loaders is simply not true. Further, if you take into consideration the past few decades where those in the top income bracket saw their income rise by close to 275 percent, while others only saw modest income growth begs the question as to who is really not paying their fair share.

Third, this claim also seems to purport those not paying income tax are either not working or somehow cheating the system. Both of which are untrue.  A large group of those not paying any income tax are the elderly. Their main source of income is Social Security, which is not taxed as income.  The other main reason 48 percent of people do not pay any income tax is because they are living in poverty and do not earn enough.  The various exemptions and deductions all people receive make their income tax rate zero.

These are not people who aren’t working or cheating the system. In fact, according to Lindsey Graham, ‘It’s really American to avoid (paying) taxes.” Full Disclosure: That quote is taken out of context. What he meant was that it is American for rich people to avoid taxes, but for the less fortunate, avoiding taxes is being a free loader.

That’s really the issue here; Republicans demonize the poor while putting the rich on a pedestal. They use this line as evidence the rich are already supporting the lower class through high taxes and taxing them more would be economic suicide. Republicans want us to believe that hiding and sheltering income to avoid taxes is patriotic, but when low-income households use standard deductions to decrease their tax burden they are leeches on society. It’s interesting we never hear about the 20,000 plus Americans who make over $200,000 a year and pay zero in income tax. That’s because those are the ‘job creators’ and we don’t attack them.

Paying taxes is about paying your fair share – both parties believe that. Republicans are just going after the wrong group of people.

Fiction vs. Reality: The Gun Control Debate

Fiction:  September 2008 – NRA ad alleges that then candidate Obama wants to levy a new tax on guns and ammo, as well as ban the use of certain guns.

Reality:  February 2008– Steven Kazierczak walks into a Northern Illinois University classroom with 3 handguns, a shotgun, and 8 loaded magazines. He opens fire killing 6 people including himself.

Fiction:  April 2009 – Glenn Beck says President Obama will, “slowly but surely take away your gun or take away your ability to shoot a gun, carry a gun.”

Reality:  April 2009 – Police officers in Pittsburgh, responding to a 9-1-1 call, were met with open fire by Richard Poplawski.  At the end of the shootout, 3 officers were dead and 2 others were injured

Fiction:  May 2010 – At the NRA National Convention, Sarah Palin said that if Obama and other Democrats thought they, ”could get away with it, they would ban guns and ban ammunition and gut the 2^nd Amendment.”

Reality:  February 2010 – During a meeting for the biology department at the University of Alabama, a professor, Amy Bishop, pulled out a handgun and began shooting indiscriminately. She killed 3 people and injured 3 others.

Fiction:  August 2011 – Chuck Norris claims the Obama administration is, “an administration with a secretive itch for gun control…”

Reality: January 2011 – Jared Loughner opens fire on a Tucson crowd gathered to hear Rep. Gabriel Giffords speak. She is critically injured and 6 are killed.

Fiction: April 2012 – Mitt Romney spoke at the NRA National Convention and warned that if Obama was given a second term, “He would be unrestrained by the demands of reelection” and would use, “every imaginable ruse and ploy” to take away gun rights.

Reality:  July 2012 – James Holmes walks into a Colorado movie theatre and opens fire on the crowd. 12 are killed and dozens are injured.

Reality:  The unfortunate reality is that these right-wingers are wrong about the President’s gun control record. In reality, Obama has already signed more repeals of federal gun laws than Bush in his combined 8 years. As a candidate, he supported closing the ‘gun show loophole’ and creating stricter background check requirements for new gun purchases; on both accounts he has remained silent since taking office. In fact, the Brady Campaign, the nation’s largest anti-gun group, gave him F’s in all gun control categories.

Part of me wishes the crazies on the right were correct about the President’s gun control record, but they are simply fabrications. I am not in favor of a total ban on guns, but how many more innocent people need to be murdered before we enact actual gun control laws? How many more preventable deaths need to occur before we realize sensible gun control laws will not be the destruction of our Constitution? How many more massacres need to happen before we reject the notion that fewer gun control laws somehow create a safer society?  We have to stop perpetuating the myth that everyone having a gun makes everyone safer. It doesn’t. It just leads to the further loss of life.

You May Have Built Your Business, But You Had Help

For the past couple of weeks the Romney camp has been bombarded with new attacks about Bain Capital, along with an unrelenting demand for more than just one year of his tax returns (this is coming from both the right as well as the left). Needless to say, not a great few weeks for Team Romney. However, it appears Romney thinks he may have found some political ammunition with which to fight back.

Recent remarks by President Obama, at a rally in Virginia, left conservatives salivating at the political fodder delivered by the President. The right-wing ‘blogosphere’ has had a field day with the President’s line, “If you’ve got a business, you didn’t build that.” Conservatives are using these remarks to reinforce their line of attack that Obama doesn’t understand how the economy works, and they’ve even gone so far as to call him un-American. (See John Sununu)

Now, before I go into my usual Republicans are wrong, and have no idea what they are talking about spiel, I will say the President could have been a little more eloquent with his choice of words. Small business owners do have to work incredibly hard, and they do have to take risks, which are not inherent to other careers.

But… that does not mean what the President said was wrong. A little context needs to be added. The backdrop of this past week and half or so has been a discussion about taxes, specifically; ending the Bush tax cuts for the top income earners – or, in many cases, your business owners. The President has been asking for their tax breaks to end in part to address growing deficits, in part to hinder the burgeoning divide between the rich and everyone else, and in part to bring back tax rates to more historical norms when job growth was much stronger. But, it is mostly to ensure the top earners in America are paying their fair share.

And that’s the issue here. It’s not that the President is un-American, quite the contrary. The majority of the twentieth century marked an era where there was an understanding in America, a sort of social contract, that every person should do their part in making America great. This meant higher earners paid higher taxes. No one said this was socialism or the destruction of America, but rather ensuring the American dream stayed alive. It was for this reason we saw top marginal tax rates during this era close to 80 percent, a number unfathomable in politics today. There was a belief, which is true, that if you are successful it was made possible by the help of a lot of other people. So it only made sense for them to pay a little more in taxes.

That attitude changed though. We went from a society where the very wealthy paid their fair share, to a society of Gordon Geckos, a society where greed was believed to be good. We became a society where the wealthy no longer used their wealth to create a better country, but used it to grow their own bank accounts. Their influence went to creating a tax code filled with loopholes and deductions that disproportionately benefited themselves. It went to deregulating businesses at the expense of people and the environment. It went to creating a financial sector where risk was taken off of the investors and bankers, and put onto the average person. We became a country centered on making the wealthiest members of society even richer.

And this brings us to today; where the mere mention of business owners and job creators paying a little more in taxes is wholeheartedly rebuked and deemed as socialism, and to imply that successful people received help from the government is an attack on America itself. When in reality they did have help, and they should pay more. Job creators, like most of us, went to a public school or hired someone who went to a public school, which are paid for by taxpayers. They drove on roads and bridges built by public funds. They most likely advanced their business through the use of the Internet, which was created with the help of government research. (By the way, these are all points the President mentioned in his speech. Shocking – Romney took the line out of context.)

The point is that business owners are successful in part because of people and the government. It is for that reason they should pay higher taxes. Sure, job creators created their businesses, but they didn’t do it alone. In fact, they had a lot of help, whether they want to believe that or not. So it’s not socialism or class warfare to ask the rich to pay more – it’s American.

To Republicans: Stop Wasting Time on Problems that Don’t Exist

Not only does the Republican Party waste time and energy focusing on a couple of nonexistent problems (during a time when the country faces a lot of ‘real’ problems); they are also disenfranchising millions of voters while treating them as second-class citizens. So what ‘problems’ am I referring to? Specifically, required drug testing for welfare recipients, and recently drafted voter ID laws.

Red states across the country are doing their best to enact both of these types of laws. First, there is the issue of mandatory drug testing for those on welfare. There are a few reasons why my Republican friends should be against this law. For all the Ron Paul enthusiasts and strict Constitutionalists – the law is a breach of privacy, an overreach in government’s power.  A lower Florida Court said it was unconstitutional because it deemed it an ‘unreasonable search,’ which violates the 4^th Amendment.

Now, to my fiscally conservative Republicans, the law doesn’t make fiscal sense! Florida, one of the first states to implement drug tests, lost money on the program. Why? Well only 2.6 percent of recipients failed the test.  The other 97.4 percent passed and were reimbursed for the cost of the drug test. Those reimbursements cost the state close to $120,000, far exceeding the benefits the state would have had to pay out.

The larger issue here is not that the party who claims to be fiscally responsible is perpetually proposing fiscally irresponsible laws, or that the party who believes they write laws with the endorsement of our Founders is enacting laws that are unconstitutional, no, the bigger issue is Republicans created this law to solve a problem that doesn’t exist. They want us to believe it is to protect taxpayers’ money, but it is just an attack on a  group of people they do not like. It is an attack on a group of people who they see as the problem. Republicans view those on welfare as a drain to the economy, and a black eye to society in general. Although it takes up a small percentage of the government’s budget, Republicans want us to believe it is the welfare system that is bankrupting the country.

This may seem cynical on my part, but I think their new objective to create stricter voter ID laws only reinforces this view. Let’s start with this – voter fraud is not a problem. Voter fraud that would be solved by stricter ID laws is even less of a problem. The rampant voter fraud Republicans want us to believe is going on is a myth. In Florida, where they are trying to implement harsher voter ID laws, there are more shark attacks per year than cases of voter fraud. It is simply a problem that does not exist, but Republicans have continued writing these laws because the laws go after groups of people they do not like; people who vote Democrat.

Back in 2008, when Republicans lost the Presidency they realized they lost by very small margins in a few swing states.  Well, one way to swing those margins in their favor is to prevent people who vote Democrat from voting. It just so happens the voter ID laws being proposed by Republicans will adversely affect black and minority voters – a typically strong base for Democrats. You’ll notice these laws don’t try to reform absentee voting because the majority who vote by absentee ballots are Republicans. Still not convinced? The voter ID law being proposed in Texas says a gun license is an acceptable form of identification but a college ID is not. Must just be a happy coincidence that gun owners tend to vote Republican and college students tend to sway left.

Republicans frame their argument for these voter ID laws as upholding the sanctity of democracy. What they are really trying to do is systematically create their own democracy, one which works to their advantage. Both of these laws are to antagonize a base of the Democratic Party Republicans do not like. They serve no purpose but to prevent Democratic citizens from voting, and demean them as humans. Instead of tackling real issues, Republicans are creating problems that are in accordance with their ideological worldview.