| |
BGonline.org Forums
Politics in Backgammon
Posted By: Daniel Murphy In Response To: Politics in Backgammon (Bill Riles)
Date: Tuesday, 30 September 2008, at 8:06 p.m.
Bill Riles writes: "Unfortunately, close to 50% of those filing US federal tax returns pay no taxes. When that number, or that number plus the naive productive citizens, exceeds 50% percent, we are doomed. Perhaps the election of McCain/Palin, like the election of George W. Bush, will delay that eventuality beyond my lifetime."
Bill's prophetic powers may prove accurate, but his facts aren't correct. First, the percentage of US federal individual income tax return filers who pay no federal income taxes is (or recently was) 32.6%, not "close to 50%." Second, the percentage who pay no taxes at all must, obviously, be smaller, since many (most) with no federal income tax liability pay other taxes, like Social Security, Medicare and corporate tax, and state or local income, sales and property taxes. (Data is for tax year 2005, the latest available from the US Internal Revenue Service, published Winter 2008; in tax year 2007 the percentage may have been slightly higher, but still about one-third, not close to one-half.) Thus, for example, while the effective federal income tax rate on the second lowest quintile of income earners is actually negative (because of exemptions and credits), when all federal taxes are considered, that quintile pays federal taxes at an effective tax rate of 7.3%. (Data is for 2007.)
It's true that the percentage of federal return filers with no federal income tax liability has risen in the last two decades. Bill would blame sinister "socialists" (and "Marxists"!). But the facts are that in 1989, the year GHW Bush took office, the percentage was 20.5%. In 1993, the year Clinton replaced Bush, office, it was 24.6% -- an increase of 4.1%. In 2001, the year GW Bush replaced Clinton, it was 27.2% -- an increase of 1.6%. And four years later it was 32.6% -- an increase of 5.4%. In the years of George W. Bush's first term from 2001 to 2005, while the number of filers increased by about four million, the number of filers with no federal tax liability decreased by about four million.
Bill sees this increase in the percentge of nonpayers as a problem. Perhaps it is. But his allocation of blame on "socialist/Marxist" income redistributors is amusing, considering that other conservatives eagerly take the credit. As Newt Gingrich recently wrote:
Thirty years of Republican tax policy have now completely eliminated federal income taxes on the poor and lower middle-income Americans, and almost eliminated them on middle America.... This is a result of the across the board income tax rate cuts adopted by Ronald Reagan and the current President Bush, plus the Earned Income Tax Credit first proposed by Reagan in the 1970s, and the child tax credit enacted into law as part of the [Republican party's] 1994 Contract With America.Suppose, though, that it is indeed a problem that the tax burden is not broadly shared. If you think, as Bill does, that more people should pay taxes, then it seems sensible that you'd like to have more people who earn enough to afford to pay them. In which case Bill should know just where to look for inspiring examples of countries where the tax burden is more broadly shared and where earners of lower incomes pay a larger share of total national tax revenues than they do in the United States. Can you guess where that is? In a word: Europe.
| |
BGonline.org Forums is maintained by Stick with WebBBS 5.12.