David Leonhardt completely destroys the nonsense about only 47% of households paying taxes.
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Come for the politics, stay for the snark.
“Jesus paying for the sins of everyone is an insult to those who paid for their own sins.”
I see no possible difficulties whatsoever with this fool-proof plan.
Being the leader of the world means to be the leader of peace.
The poor and middle-class pay taxes, the rich pay accountants, the wealthy pay politicians.
The cruelty is the point; the law be damned.
“More of this”, i said to the dog.
Peak wingnut was a lie.
They traffic in fear. it is their only currency. if we are fearful, they are winning.
Too often we confuse noise with substance. too often we confuse setbacks with defeat.
Anyone who bans teaching American history has no right to shape America’s future.
rich, arrogant assholes who equate luck with genius
But frankly mr. cole, I’ll be happier when you get back to telling us to go fuck ourselves.
Russian mouthpiece, go fuck yourself.
You can’t love your country only when you win.
And we’re all out of bubblegum.
If you’re pissed about Biden’s speech, he was talking about you.
It may be funny to you motherfucker, but it’s not funny to me.
Do not shrug your shoulders and accept the normalization of untruths.
🎶 Those boots were made for mockin’ 🎵
Make the republican party small enough to drown in a bathtub.
In my day, never was longer.
Let there be snark.
Red lights blinking on democracy’s dashboard
I like you, you’re my kind of trouble.
SGEW
As a dedicated NYT reader, Leonhardt has yet to let me down.
Brick Oven Bill
The correct answer is to tax consumption, not production. A tax on large estate inheritances would be fine too, to discourage spawn like Patrick Kennedy and Katrina vanden Hueval from becoming worthless commentators on the social scene from their mansions.
This tax structure would encourage hard work, and thrift.
Brian J
@SGEW:
Yes. I won’t say he’s perfect, because nobody is, but his columns are usually great. He was one of the few people in the media with a big platform to say during the health care debate, “Um, guys, we already have rationing in this country,” and other obvious but apparently unspeakable truths about our system. In fact, our buddy Tom Levenson once told me here that his economics colleagues at MIT have recommended Leonhardt’s columns. And that’s like, a pretty good school and all.
mistermix
You can see why he was merely a runner-up to Kathleen Parker in this year’s Pulitzer competition. That column isn’t witty enough.
dmsilev
Restating the obvious, but for some reason the obvious doesn’t get restated (or even stated) nearly often enough.
dms
gypsy howell
And here’s the other thing about that pernicious lie. I’d bet you most people don’t distinguish between paying payroll taxes and federal income taxes. You pay them both out of your paycheck to the federal government, and file them on your federal income tax return. Payroll taxes sure *seem* like “federal income taxes” to the average person.
So, here you have almost all Americans paying some amount of money to the federal government and filing a federal income tax return, even if it’s only for FICA taxes. Only now average Joe Truck Driver/ Fireman/ Computer Support Person is thinking “Hey, I’M paying federal taxes. And yet I hear on my teevee that 47% of Americans don’t have to pay ANY taxes. Who are all these grifters and deadbeats who don’t have to pay any taxes? Must be them damn n****rs and illegals, cause it ain’t ME.”
Mudge
I am surprised he mentions capital gains taxes separately. They are income taxes and are reported on the 1040. In fact, if you are self-employed, payroll taxes are sent in with the 1040.
SGEW
@mistermix: Honestly, I think the committee thought that he’s too young to get a Pulitzer yet; he’s in his mid to late thirties, I believe, and Parker is somewhat older (I think? Google and Wiki fail me here). He’ll get one in a couple of years.
It’s like the Oscars, baby.
El Cid
Right wingers whining about how the lowest income workers pay no federal income taxes may need to be reminded that this was a Republican initiative of the 1970s and truly ramped up by Saint Ronald Fucking God-Damn Reagan — those miserable hypocritical memory-free worthless lying shits.
And, yes, a massive inheritance tax is not only good for economics and society, but is of course in line with basic capitalist principles of the need for each individual to produce his own valued market participation, rather than parasitize off of a previous generation for inefficient, unachieved advantages.
Brian J
@El Cid:
During the 2008 election, I probably took a couple of years off of my life trying to emphasize this point. I don’t remember what the exact responses were, but when I asked how Obama could be a socialist for doing something that was originally largely a Republican idea that was rightfully expanded by Democrats, I got something along the lines of “Shut up, that’s how!” Of course, to be fair, that was probably the most credible answer they could have given me.
BenA
@Brick Oven Bill: OMG! BoB is FOR the “Death Tax”?
Troll feeding aside…
I said it yesterday I think… most of this tax crap comes from “Tax Foundation” who’s goal is to get the rabble all riled up about income tax, and then use it for cover for rolling back corporate taxes.
Just follow the money. It’s funded from coorporate interests and was founded by Standard Oil in the 1930s. Yeah they’re really looking out for the little guy.
JGabriel
Brick Oven Bill:
Fine. Let’s start with increasing taxes on all real estate transactions beyond one’s primary residence, and on all stock and bond transactions. And all bonuses – if corporations want to consume the services of their most “talented” executives, they can pay a hefty tax on it.
.
Bulworth
This argument comes up every year and I still don’t get it.
Leaving aside OASDI (i.e. “payroll”) taxes, there is no federal income tax rate of 0. The only way someone doesn’t pay federal income taxes during the year is if they have no income to tax or if they have enough itemized or standard deductions to reduce their effective income to 0.
I’m not familiar with the EITC so maybe that plays a role here but I can’t imagine the percent of households affected by the EITC is all that high.
Perhaps someone can enlighten me.
In any event, I don’t see, from a teabagger point of view, why a high percentage of households not paying income taxes is something they would want to trumpet. Among other things, it doesn’t seem like much of an argument for a tax cut. If anything, it sounds like an argument for a tax increase (or a war on various itemized deductions, like the mortgage interest and charitable deductions) on the lower and middle classes.
BenA
@Bulworth:
My wife is a tax prep so this is second hand but I think EITC effects pretty much only the working poor with children. The percentage of people it effects has to be incredibly small.
I think why the only “47%” pay taxes has traction is because people see that they pay out income tax every check (even though they get a lion’s share back at the end of the year) so they think they’re paying taxes. It sort of goes back to what gypsy howell was saying above.
“I pay taxes! Who are all these people not paying taxes!” etc… and goes from there.
Fleas correct the era
It’s always a pleasant surprise when a NYT piece actually informs. What happened to American reporters (who mostly write as though they’ve undergone some sort of chemical castration that prevents them from going beyond “Republicans say… while Democrats say …”)? Is it like that in other countries’ papers?
Mumphrey
Does anybody know how long people have been recognizing this dumb tax freedom day thing? I don’t think I ever heard of it before 3 or 4 years ago. The whole thing is so pathetic, though. I mean, who pays the “average” tax rate? Nobody. There is no “average” tax rate. People pay specific income tax rates based on how much they earn. But, the anti-tax nuts know that the only way they can make the tax freedom day seem scary and outrageous is to shove it back as far on the calendar as they can.
Nobody whose “tax freedom day” comes on January 17 is going to be too upset by that; and nobody will be angry to learn that some guy who makes $37,000,000 a year won’t get his tax freedom day until June 5, or something. So they try to lump us all together and tell us that we’re all working “for the federal government” for almost 4 months into each year, and get the poor and the middling income people to fight for the millionaires. It’s cynical and manipulative and selfish and destructive, but I kind of have to admire them for their cleverness and brazenness.
catclub
Destroyed means to me, refuting fallacious statements.
It usually applies to responses to articles by Jonah Goldberg.
Leonhart did not do that. He clarified the accurate but misleading statements of type: 47% pay no Federal INCOME tax by saying that there are many other federal taxes and most everyone pays those.
They are misleading because one of the posters here (BenA @ 14) has already inverted them to say, only 47% PAY federal income tax.
(No that would be 53% . )
KDP
Did anyone catch John Stewart’s segment on this issue last night?
I, for one, did not know that Exxon was among the fortunate 47% of Americans who pay no taxes nor that GE was getting a 1.1 billion dollar refund.
Sorry the link goes to an SF Examiner article in which the Daily Show segment is embedded, but I’m working and don’t have time to go find a stand-alone link.
Bill H
I will undoubtedly be accused of “concern trolling” here, but I believe the argument about payment of income taxes specifically as opposed to taxes generally has some validity.
The “payroll taxes” are Medicare and Social Security and they do not contribute to the general revenue stream for operations of the government. In terms of individuals paying for things like national defense and the National Park System, only the income tax does that. All other federal taxes are dedicated revenue, and the funds are allocated to specific programs. So that 47% whose deductions eliminate their taxable income and who therefor pay no federal income tax are, in fact, benefiting from the things provided by the federal government and are not paying any part of the cost.
Now go ahead and call me whatever names you feel the need to call me.
Mnemosyne
I’m looking at Box 2 on my W-2 form. That box is titled Federal income tax withheld. That box has $4,768.86 in it. I’m getting a refund of about $700.
Will someone please explain to me how it is that I “don’t pay federal income tax” when my fucking W-2 says Federal income tax withheld?
And, no, I’m not looking at my Social Security or Medicare taxes. Those are separate taxes with their own boxes (4 and 6).
So again, how can it be that I’m not paying federal income tax despite the fact that there is a number much larger than my refund in the box labeled Federal income tax withheld?
ETA: And I’m not rich here, folks. I made about $40K last year. So please explain this strange discrepancy where I supposedly don’t pay federal income tax even though it says right on my goddamned W-2 that I paid federal income tax.
mvr
@Bill H:
Leonhardt specifically rebuts that form of argument in his article. The general point is that money is fungible. But also, many folks who pay in for payroll taxes don’t actually get out what they pay in — for instance if they die when they are 70 or so.
And just to agree with everyone else, Leonhardt has been consistently good over the past more than a year — enough so that I noted his name after reading good stuff again and again.
Bulworth
@Mnemosyne: I’d really like to see the tax returns of people who end up getting all their money back. It would seem they would have to have a combination of very low income and a lot of deductions. A curious population.
I wonder if this 47% number includes people who don’t file?
Maude
@Mnemosyne:
You are paying a fair bit of tax there.
Was on the bus with a cutie that talked about the government taking over. And dos Mexicans.
That’s right- SSDI and Medicare. Yup.
I didn’t bother to reply.
Bill H
@mvr:
Except that tax money is not fungible. Social Security and Medicare taxes are set aside in a trust to fund that program. The government borrows that money to run the government, but doing so increases the deficit. Excise taxes on gasoline are set aside for highway programs.
The people who pay in to SSI and die without collecting are far outweighed by people who live long enough to collect more than they paid in. Which is sort of irrelevant in any case; if they die without collecting their money still stays in the SSI trust.
To have 47% using government, National Parks and the like, without bearing part of the cost burden may be an acceptable condition. It may even be desireable; that’s why we instituted the progressive income tax. But let’s not pretend that it does not exist.
Bulworth
Actually this practice reduces that year’s federal budget deficit, it doesn’t increase it. And since Social Security has been running surpluses for approximately 25 years it means that Social Security taxes–which are regressive because (1) they are the same percent for everyone and (2)there is a cap beyond which Social Security taxes don’t apply–are helping to fund the rest of the government.
Now of course that the fun days of these Social Security surpluses are about over, the usual cast of characters are noising it up about the need to “cut entitlements” and “runaway spending”, the result of which would be to produce Social Security surpluses once again so we can rerun the whole financial shell game of the last three decades.
David Brooks
We should also note that our total taxation system is the most regressive in the OECD. Thanks to Nate, you can see the Gini coefficient of income distribution in its raw state (surprisingly, we are in the middle of the pack in terms of income inequality) and then after taxes and transfers, where we come out easily as the most unequal (the Gini comes out lower, so redistribution happens, but less than anywhere else). Those taxes and transfers disproportionately hit the lower-income.
slag
Honestly, the only thing that could have made that column better is if Leonhardt had ended it with, “So, take that, bitchez!” It’s less fun to mentally add that phrase than it is to read it written on the page.
Mnemosyne
@Bill H:
That’s what I’m arguing, though — it does not exist. It’s a phantom made up by anti-tax jihadists who keep trying to tell me that if I did not sit down and write a personal check to the federal government, I didn’t “really” pay federal income tax because somehow withholding the tax doesn’t count.
Now, I don’t have a house and I don’t have kids, so there are a lot of deductions that I don’t have that other people do. Are you arguing that we should end the tax deductions for mortgage payments and for having dependents?
Bill H
@Bulworth:
Well, that’s a nice little piece of trickery that they pull, but it’s a lie. They report the deficit, including payroll taxes as if it was income. That makes the deficit look smaller than it actually is. Borrowing money does not increase income.
@Mnemosyne:
No, you are confusing tax payment with tax liability. The issue is that 47% of households have no tax liability. If they have taxes withheld they get a refund.
I am not claiming that progressive tax is bad. In fact I am a bleeding heart liberal and I favor it. As the economy has worsened the tax has been made more progressive and I happen to think that is a good thing. I think it should be defended on its merits, not with weasly spurious arguments trying to pretend that it doesn’t exist.
Have the courage of our convictions and defend the progressiveness of income tax. “Yes, the wealthy are bearing the cost, and it is fitting and proper that they do so. When the economy improves, then more people will participate in paying the cost.”
Bill H
Debbie Wasserman-Shultz was asked about the “individual mandate” in health care reform and she wealeled out with a spurious argument about, “we did not require in this legislation Americans to have health care. What we did was, we established a different treatment via your tax return, just like the difference between married people and unmarried people or people who have children and don’t or homeowners and renters.” Utter crap, and totally lacking in courage. Passing the indivual mandate was a necessary and right thing to do, and if she’d had the courage of her convictions she would have said just that. “The mandate was necessary and correct and I am proud that we did it.”
Same thing with the shift in progressiveness of the income tax. The economy has gotten worse and Democrats have made the tax more progressive, reducing the burden on lower incomes. We should be saying, “Damn right, this was the right thing to do.” Instead we are coming out with a bunch of nonsense trying to pretend that “we didn’t really do it.” Just plain gutless.
Mnemosyne
@Bill H:
And how many of those households with no liability make over $200,000 a year, if not more? I guarantee you it’s a pretty good-sized number.
That’s why this meme bugs me — it pretends that the people with zero tax liability are low-income when that is very clearly not the case. So you should be making a different argument: since rich people are more likely to have very little tax liability than someone in the middle class, clearly there’s something wrong with our current system since it’s being supported by people at the middle and bottom of the heap.
The problem with our system is the rich people who are sponging off the rest of us, not the poor people, but that’s always how these numbers get spun. Always.
Nellcote
@Mnemosyne:
If your amount paid is less than the standard deduction you get the difference back. Generally speaking. You can set up your withholding so that you pay 0 during the year.
Nellcote
There are a couple of new credits this year that are relatively substantial for poor workers. A credit called (something like) making work pay. The EIC is available to single w/out kids. The first $2400 of unemployment is not taxed.
Bill H
@Mnemosyne:
Show me. Give me one scrap of actual evidence. Quote one authoritative source. Facts, please.
Bill Murray
The EITC is by about 20-25 million filers each year, with the total EIT credit being $30-50 billion each year. The most recent complete yearly numbers are for 2007, with 24 million returns and $48 billion in credits, which is about $2,000 per return.
source: http://www.irs.gov/individuals/article/0,,id=177571,00.html
Mnemosyne
@Bill H:
Here you go:
http://www.taxpolicycenter.org/UploadedPDF/1001289_who_pays.pdf
It’s true that very few people who make more than $1,000,000 a year pay no income tax, but they are not a figment of my imagination.