Why The GOP Is Advocating A Tax Increase On The Middle Class

[one...two...tree 2,762]

You can almost always count on Republican presidential candidates to be united in their opposition to more taxes for the rich. But this time around, the 2012 field is standing lockstep behind a less traditional idea: the middle class pays too little in taxes.

Thanks to a strange convergence of conservative ideological trends since President Obama’s election, Republicans now are expected to protest the entire bottom half of taxpayers’ contributions as too stingy even while they proclaim Americans are “Taxed Enough Already.” And they’ve yet to figure out a policy that will satisfy both complaints at once.

In recent months, nearly every major Republican candidate has name-checked a popular statistic that 47% of Americans who file taxes paid no income tax in 2009. Given the GOP’s anti-tax zeal you’d think they’d be celebrating. Nope!

“Right now we know that 53% of Americans pay income taxes and 47% do not,” Michele Bachmann told Bloomberg TV on Tuesday. “I think we definitely need to change the tax code. We need to get more in line. Everybody benefits from this magnificent country. Everybody pay something.”

Not only do statements like Bachmann’s seem to defy past Republican orthodoxy, but the candidates are explicitly making the argument on the same fairness grounds that progressives like Elizabeth Warren have used to demand greater taxes on the rich. The idea isn’t just that tax breaks for the rich trickle down the poor — it’s that they also deserve them more than freeloading Americans. Rick Perry made this moral outrage a key line in his campaign kickoff.

“We’re dismayed at the injustice that nearly half of all Americans don’t even pay any income tax,” Perry said in his announcement speech. “And you know the liberals out there are saying that we need to pay more.”

Now the 47% number only tells part of the story: most of those “non-payers” pay payroll taxes, gas taxes, state and local taxes, etc. And in an ironic twist, the phenomenon is almost entirely a result of Republicans’ own enthusiasm for tax cuts. In the 1980s and 1990s, GOP lawmakers demanded that any programs aimed at helping poor and middle-income households be structured as refundable tax credits, like the Earned Income Tax Credit, rather than as direct payments like welfare. President Bush added to the trend by lowering marginal rates across the board. Then Obama structured large chunks of the stimulus as tax breaks in order to garner bipartisan support. The non-payer rate, which had hovered around 20% - 25% since the 1950s, shot over 30% in 2002 and never looked back. And because the tax credits are refundable, many taxpayers aren’t just paying nothing, they’re actually gaining a net positive on their income tax.

http://2012.talkingpointsmemo.com/2011/10/gop-demands-middle-class-tax-hikes.php?ref=fpb

[luckytxn 2,265]

Hey the rich pay most of the taxes so lets just tax them even more. In fact lets confiscate all of their money. That will take care of all of our problems in one swoop. Then next we can raise the corporate taxes to huge levels. That should give us a surplus that we can then spend on even more Socialism. A win win all the way around.

[Ready to do it 101]

A win for who? Do you want to live in socialism? I really think people are too dumb to recognize that if the rich are further taxed or if the corporate tax breaks were gone companies would just close shop, and no one would have any interest in starting new business. The rich small business owner is currently standing on the sidelines waiting for Obama to be gone so they can go hire again without having to worry about what new regulation the govt wants to come up with. What you propose would simply make every rich individual considering opening shop to say, "Nope, not worth the risk." I'll simply keep my money on the sidelines and live happily with the millions I got... which aren't taxed if they are sitting in cash.

People don't invest capital or start new businesses to make 5-10%.

What would really happen under your scenario is there'd be even more poor folk without jobs. It's no skin off the rich man's back. Further, he's not the one paying for your social programs at this point because the govt doesn't tax money sitting on the sidelines. If there is an incentive to invest a make a large profit, great. If there is not, the rich man is content with what he's got.

Hey the rich pay most of the taxes so lets just tax them even more. In fact lets confiscate all of their money. That will take care of all of our problems in one swoop. Then next we can raise the corporate taxes to huge levels. That should give us a surplus that we can then spend on even more Socialism. A win win all the way around.

[Kang 22]

They will all move to China (again)

I'm not really into corporations but the thing is they are taxed twice: corporate income and the "dividends" that are distributed among stockholders

Edited October 14, 2011 by Kang

[luckytxn 2,265]

A win for who? Do you want to live in socialism? I really think people are too dumb to recognize that if the rich are further taxed or if the corporate tax breaks were gone companies would just close shop, and no one would have any interest in starting new business. The rich small business owner is currently standing on the sidelines waiting for Obama to be gone so they can go hire again without having to worry about what new regulation the govt wants to come up with. What you propose would simply make every rich individual considering opening shop to say, "Nope, not worth the risk." I'll simply keep my money on the sidelines and live happily with the millions I got... which aren't taxed if they are sitting in cash.

People don't invest capital or start new businesses to make 5-10%.

What would really happen under your scenario is there'd be even more poor folk without jobs. It's no skin off the rich man's back. Further, he's not the one paying for your social programs at this point because the govt doesn't tax money sitting on the sidelines. If there is an incentive to invest a make a large profit, great. If there is not, the rich man is content with what he's got.

I really need to figure out which smiley is the one that means being Facetious.

[Ready to do it 101]

Yeah, I read some of your posts on other threads and realized you were speaking with tongue in cheek.

I really need to figure out which smiley is the one that means being Facetious.

[웃 910]

I was under the impression that the bottom 51% pays all their money in taxes (state sales taxes / federal excise taxes / etc.) . A majority have little to no savings. They can't even afford to fill their gas tank up. So as a % of their income they often pay 70% of their $100 life savings just to fill up their gas tank, or go to the grocery store. Taxing them more isn't going to solve the problem.

• 
  
• The 51 percent figure is an anomaly that reflects the unique circumstances of 2009, when the recession greatly swelled the number of Americans with low incomes and when temporary tax cuts created by the 2009 Recovery Act — including the "Making Work Pay" tax credit and an exclusion from tax of the first $2,400 in unemployment benefits — were in effect. Together, these developments removed millions of Americans from the federal income tax rolls. Both of these temporary tax measures have since expired.
• In a more typical year, 35 percent to 40 percent of households owe no federal income tax. In 2007, the figure was 37.9 percent. [2]
• The 51 percent figure covers only the federal income tax and ignores the substantial amounts of other federal taxes — especially the payroll tax — that many of these households pay . As a result, it greatly overstates the share of households that do not pay any federal taxes. Data from the Urban Institute-Brookings Tax Policy Center show only about 14 percent of households paid neither federal income tax nor payroll tax in 2009, despite the high unemployment and temporary tax cuts that marked that year.[3]
• This percentage would be even lower if federal excise taxes on gasoline and other items were taken into account.
• Most of the people who pay neither federal income tax nor payroll taxes are low-income people who are elderly, unable to work due to a serious disability, or students, most of whom subsequently become taxpayers. (In a year like 2009, this group also includes a significant number of people who have been unemployed the entire year and cannot find work.)
• Moreover, low-income households as a whole do, in fact, pay federal taxes. Congressional Budget Office data show that the poorest fifth of households as a group paid an average of 4 percent of their incomes in federal taxes in 2007 (the latest year for which these data are available), not an insignificant amount given how modest these households' incomes are — the poorest fifth of households had average income of $18,400 in 2007. [4]The next-to-the bottom fifth — those with incomes between $20,500 and $34,300 in 2007 — paid an average of 10 percent of their incomes in federal taxes.
• Even these figures understate low-income households' total tax burden, because these households also pay substantial state and local taxes. Data from the Institute on Taxation and Economic Policy show that the poorest fifth of households paid a stunning 12.3 percent of their incomes in state and local taxes in 2010.[5]
• When all federal, state, and local taxes are taken into account,the bottom fifth of households paid 16.3 percent of their incomes in taxes, on average, in 2010. The second-poorest fifth paid 20.7 percent.

http://www.cbpp.org/...fa=view&id=3505

Edited October 14, 2011 by Lord Infamous

[mawilson 2,133]

Now the 47% number only tells part of the story: most of those “non-payers” pay payroll taxes, gas taxes, state and local taxes, etc.

Everybody else (53%) pays payroll taxes too.

State and local taxes have nothing to do with federal tax reforms.

Gas taxes? Seriously?

FAIL

[웃 910]

Everybody else (53%) pays payroll taxes too.

State and local taxes have nothing to do with federal tax reforms.

Gas taxes? Seriously?

FAIL

How do you tax someone that has no money?

We have a poverty problem. Not a tax problem.

[Obama 2012 1,714]

How do you tax someone that has no money?

We have a poverty problem. Not a tax problem.

poverty? Please. Americans don't know what poverty is.

[Mr. Big Dog 10,747]

How do you tax someone that has no money?

You give them a credit card on which they can put their tax liability. Shift the federal debt to the poor and have the rich collect interest on the debt. It's perfect.

[웃 910]

poverty? Please. Americans don't know what poverty is.

Mexicans do. That's why they come here! Our poverty is upper middle class in Mexico.

[mawilson 2,133]

You give them a credit card on which they can put their tax liability. Shift the federal debt to the poor and have the rich collect interest on the debt. It's perfect.

I like it.

[Mr. Big Dog 10,747]

I like it.

I knew you would. We could also consider making the interest the rich collect on the debt of the poor tax free. Of course, that interest would not be tax deductible for the poor.

Edited October 14, 2011 by Mr. Big Dog

[웃 910]

poverty? Please. Americans don't know what poverty is.

I have an idea. We need to implement a tax on the people in the bottom 14%. That will fix the problem!

1 out of 7 US households struggle to feed everyone

At some point last year, about 17 million U.S. households had some difficulty feeding everyone in their family.

That amounts to 14.5 percent of U.S. households, according to a report released last month by the U.S. Department of Agriculture.

The percentage of households who experienced food insecurity in 2010 was virtually unchanged from 2009. But it has risen by about 3 percentage points since 2007, the year the country officially went into recession.

The report classifies people as food insecure if they've had trouble feeding their family at some point during the year.

A subset of that group, comprised of about 6.4 million households, were classified as having very low food security. That means that at some point during the year someone in the house went hungry.

The report found that about 16.2 million children were living in food-insecure households. Still, the report noted that children are often shielded from hunger by the adults in the home.

http://lifeinc.today...os-going-hungry