Mike the Mad Biologist

Republican presidential candidate Rick Perry, in an attempt to win the craziness sweepstakes, has been proclaiming hither and yon that half of all Americans pay no income tax. Call me confused, but I thought Republicans wanted to lower income taxes? Maybe it has something to do with who those non-payers are?

Well, who are they? Let’s see:

The number one reason should come as no surprise. It’s because they have low incomes. As my colleague Bob Williams notes:

A couple with two children earning less than $26,400 will pay no federal income tax this year because their $11,600 standard deduction and four exemptions of $3,700 each reduce their taxable income to zero. The basic structure of the income tax simply exempts subsistence levels of income from tax.

Low incomes (or, if you prefer, the standard deduction and personal exemptions) account for fully half of the people who pay no federal income tax.

How foolish. Taxing people existing at “subsistence levels” builds character. Oops! Dropped my monocle! At times of moral crisis like this, I always like to ask myself, “What Would Reagan Do?“:

And who took many of these folks off the tax rolls? Ronald Reagan. He pushed for the historic 1986 tax reform bill, and in a 1987 statement, he took pride in the consequences: “Millions of Americans with low incomes will be dropped from the Federal income tax rolls altogether.”

I guess the new Republican ethos is to (further) punish the poor through taxation. Or something. OK, who else doesn’t pay income taxes? Those damn old people:

The second reason is that for many senior citizens, Social Security benefits are exempt from federal income taxes. That accounts for about 22% of the people who pay no federal income tax.

Those freeloading elderly living high on their maximum of $28,000 per year. Of course, if they’re dependent on Social Security, they probably didn’t pay in the maximum amount and thus aren’t receiving full benefits. Weakling üntermenschen! Speaking of üntermenschen, the third group consists of households that want to provide for their damn kids! I’m sure Rick Perry et alia would argue they should have had abortions and used birth control.

[uncomfortable pause]

…moving right along, let’s talk about those damn freeloading kids:

The third reason is that America uses the tax code to provide benefits to low-income families, particularly those with children. Taken together, the earned income tax credit, the child credit, and the childcare credit account for about 15% of the people who pay no federal income tax.

Taken together, those three factors — incomes that fall below the standard deduction and personal exemptions; the exemption for most Social Security benefits; and tax benefits aimed at low-income families and children — account for almost 90% of the Americans who pay no federal income tax.

The overwhelming majority of households that pay no income tax earn less than $50,000 per year. Do conservatives who prattle on about this want to raise the bottom half’s taxes? Governor Perry executed an innocent man, so I wouldn’t put anything past him. But someone needs to ask Perry if he wants the poor and the elderly to pay more in taxes (remember that poor workers pay payroll taxes regardless of how poor they are).

Because I don’t think the majority of Americans are that far gone.

Comments

#1 dean
August 17, 2011

“Because I don’t think the majority of Americans are that far gone.”

Sadly a good number of people around here (SW Michigan + Grand Rapids) are that far gone. The common lines among them are that the people you mention are “gaming the system” and “living high from the rest of us”.
#2 Kierra
August 17, 2011

I’m sure Rick Perry et alia would argue they should have had abortions and used birth control.

Unfortunately, what they actually think is that poor people shouldn’t have sex, ever.
#3 Eric Lund
August 17, 2011

remember that poor workers pay payroll taxes regardless of how poor they are

This, of course, is what people who demagogue on this issue want us to forget. That, and the fact that there is a maximum amount subject to Social Security tax. And that investment income (which poor people don’t have) is not subject to payroll taxes. And that certain kinds of income such as capital gains (which poor people also don’t have) receive preferential tax treatment.

Back to payroll taxes: These were increased substantially in the 1980s in order to prevent the Imminent Death of Social Security(TM). Rush Limbaugh, for one, has been conveniently ignoring this fact in touting Reagan’s tax reduction efforts for going on two decades now.
#4 dave
August 17, 2011

I’m told some folks that work for cash when possible don’t pay any tax at all except when necessary for assorted sales on retail goods. Can this be true?
#5 Eric Lund
August 17, 2011

Dave @4: I’m sure there are some people who try to do this. There may even be some who succeed; there is of course no solid evidence regarding these people. But just because they don’t *pay* tax doesn’t mean they don’t *owe* tax. Felony convictions await anyone who is caught trying this. I am told that people who work in occupations where cash transactions are an unusually large fraction of the total–restaurant workers, taxi drivers, criminals (Al Capone did time for tax evasion, not for any other criminal act)–are particularly likely to be audited, precisely because they might cheat in exactly this fashion.
#6 mrcreosote
August 17, 2011

I wonder when he will turn his attention to the corporations that pay no tax?
#7 Ian
August 18, 2011

“I wonder when he will turn his attention to the corporations that pay no tax?
”

When they stop creating jobs, duh.
#8 Wow
August 18, 2011

“When they stop creating jobs, duh.”

In the country or foreign jobs?

Most of the employment in a country is from the small business. Small businesses don’t get most of the tricks to avoid taxes.

But then you don’t read any economic treaties, do you, you just listen to what Fox says.
#9 Ian
August 18, 2011

Step 1: Drive more people into lower income brackets
Step 2: Demonize those people for being in low income brackets
Step 3: Use the boogeyman of freeloading poors to help drum up support for policies that repeat step 1.
#10 Wow
August 18, 2011

OK, I see that maybe post 7 was ironical in style.

NOTE to all those who go “You’ve been poe’d”, you can’t INTEND to poe. The poe is happening on the person making the OTT statement, not those who thought the OTT statement was the writers’ genuine intent. That the originator was considered genuine is THEM being poe’d.

And you DEFINITELY can’t deliberately go out poe-ing. That’s just plain old trolling, even if it’s a “good cause” trolling.
#11 Samantha Vimes
August 19, 2011

Just have to say, I need to bookmark your blog.
#12 Cevahir Mecidiyekoy
August 19, 2011

helo cevahir mecidiyekoy, istanbul sisli.
This, of course, is what people who demagogue on this issue want us to forget. That, and the fact that there is a maximum amount subject to Social Security tax. And that investment income (which poor people don’t have) is not subject to payroll taxes. And that certain kinds of income such as capital gains (which poor people also don’t have) receive preferential tax treatment.
istanbulshoppinges.