Friday, September 21, 2012

Paying Taxes

Mitt Romney's comments in a recently released video have once more brought us back to the tired and completely misunderstood subject of who does or doesn't pay taxes. This is stupid for all sorts of reasons. It's also, like many items involving public policy, way more complicated than it's represented. Let's take a look at some important facts.

The way it's almost always put is that at least 40% of American's don't pay any taxes. This is complete and utter bull, and should be obviously so to anyone with a functioning frontal lobe. Everyone pays taxes. That's right, every single American and every single person who lives in this country pays taxes. Think I'm crazy? Take a breath and think about it for a moment. Every 5 year old who buys a candy bar pays sales tax, just like every illegal immigrant who buys groceries. Many Americans, pay taxes on property they own, including cars. Anyone earning a paycheck pays payroll taxes. And yes, a lot of us pay federal income taxes. Oh, and don't forget state and local taxes. Even if you didn't pay Federal income taxes, nobody gets a free ride, despite what the talking heads want you to think.

But even if we only focus on just Federal income taxes, according to the Congressional Budget Office (CBO), even the bottom fifth of American households average a 4% income tax rate, according to 2007 numbers. A not insignificant amount when you consider they are only making around $18000 a year as it is. Incidentally, numerous tax cuts and short duration programs instituted in the 2009 Recovery Act, among other legislation, have inflated things a bit making the numbers over the last few years swell abnormally. Also consider that many who actually don't pay Federal income taxes are in that position, not because they are freeloaders, but because they make such a pittance. But wait, not every income tax avoiding person is even poor! Some are just able to take advantage of a tax code that is littered with loopholes designed specifically for this purpose. Who's responsible for that? Well, many of the same people who thump their chests about the freeloaders!

Am I the only one who finds it disgusting to hear millionaires whine that people barely earning enough to get by aren't paying enough taxes? Mitt Romney, all by himself, earns enough each year to raise 400 low income individuals into line with the national median income. Yet he thinks someone who doesn't make enough to qualify for income tax is a freeloader? Why aren't politicians and pundits laughed off the stage for saying things like this?

Look, I could dig up numbers to shine a light on this from all sorts of angles, but the point is that this entire line of attack is designed for only one purpose; to pit one group of Americans against another. To convince one demographic that they are doing all the work while the others are taking advantage of them. In the current climate it's being done to convince middle class conservatives that they are the real downtrodden ones and not the so called poor. The entire argument appeals to our baser instincts of suspicion and paranoia. There is little if any factual data to support it and what little there is has been horribly distorted, but that doesn't matter in a political world where lying has become normal. It would be nice if we weren't so gullible, but then again it would be nice if people in positions of authority had a sense of honor and integrity. Oh well, I can dream.

2 comments:

  1. This really pisses me off. The video was in fact a snippet of a conversation without context. As someone who has sampled most all the tax brackets (sans the top 1%) and paid taxes as an individual, corporation and sole proprietor, I can say without a shadow of a doubt that the tax code is complete crap. I thought congress were idiots when I cashed my "rebates" during the Bush years, and as well when I cashed my $10k home buyer credit check. I felt persecuted when I was a sole proprietor, and angry at the inequality when I found myself in a sweet spot in the tax structure.

    It's more like 50% who pay no federal taxes, and that's obscene. Your sales tax is between you and your state house, and government run Ponzi Schemes are a completely different matter. No one should pay zero taxes. There should be a minimum for every person, even if you earn zero and the tax is $1. You should not be allowed to vote unless you pay taxes. Originally only land owners could vote. The logic being that only those who have skin in the game should decide the government. Every one should, and must have skin in the game.

    The real problem is that there are too many loopholes and credits for the tax code to be fair. And the tax code has become progressively more progressive over the years. These are sacred cows and it's not likely that politicians will ever do the right thing as long as there is a 15 trillion dollar credit card limit.

    Romney is right. Those 47% may not all be willing freeloaders, but freeloaders they are, thanks to our spineless and moronic federal legislators. And FYI Romney's taxes are mostly on dividends. Dividend taxes are a double tax. Do some home work on the tax code and thank Romney for his 45% contribution.

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