Thursday, September 20, 2012

How much do Americans really pay in taxes?

I try to get input from both the right and the left on issues, and I am grateful to have Ezra Klein of the Washington Post as a source of liberal viewpoints.  I have found that he is a very effective spokesman for his side, and I really appreciate that he stays away from ad hominem attacks and demonization of the right.  His points are always reasonable, i.e. based upon reasons, rather than being emotional appeals to his liberal tribe.

He presents a really interesting fact about taxes - how much do the different strata of society pay in taxes?  Actually, all strata pay substantial taxes.  Here is the chart:



The bottom fifth income group pay a total of about 17% in total taxes, and the top fifth income group pay about 30% of total taxes.  

So, the idea that some conservatives have that they are being taken advantage of by freeloaders (the beliefs of Ayn Rand, Paul Ryan, and the donors that Romney was appealing to in Boca Raton) is just nonsense. The lower strata don't pay as much Federal Income Tax, but they pay state and local taxes.  The less income they have, the lower the percentage of federal taxes they play and the greater the percentage of state and local taxes they pay.  

Here is that chart:




I think this is an example of the damage that Rush Limbaugh and conservative radio has had on the Republican Party.  I know that years ago, Limbaugh had a statement on his website that half of Americans didn't pay taxes.  I don't remember if he distinguished that he was only talking about Federal Income Taxes.  I just looked at his website and couldn't find that graphic today.  But I think that became a rallying cry for conservatives who felt taken advantage of by the Takers who were seen as exploiting the Producers.

But, a little analysis, and the picture changes dramatically. Is it really some kind of injustice that the lower fifth income group pays 17% while the upper fifth has to pay 30%?  Don't the lower fifth have their hands full with food, shelter, and a hope for an education for their children without the upper fifth trying to figure out ways to raise taxes on them?

I think the Democrats are winning this one, by a pretty wide margin.