Vegas
04-14-2007, 11:50 PM
http://www.ibdeditorials.com/IBDArticles.aspx?id=261357146315752
April 17: It will come as no surprise that the latest IBD/TIPP poll shows more people think they pay too much in taxes than too little. What's intriguing, though, is it's true even for those who pay little or nothing at all.
So what gives? Looking at the data below, you see that fully 58% of all those earning under $30,000 a year say they pay too much in taxes. Meanwhile, the same people are convinced that the "rich" — that is, those with more than $100,000 in household income — aren't paying their fair share.
We don't mean to pick on low-income people. But, as a group, they're younger and less educated than the population as a whole. They are therefore more susceptible to the class-warfare-based lies often promulgated in the media.
Somehow, the notion goes, the rich get tax breaks while the poor end up paying the taxes. That's where the Democratic mantra of "tax breaks for the rich" really gets its traction.
The problem with that, as we've noted in this spot many times, is that it's a total myth. Yet it persists.
When you look at what lower-income Americans actually pay in federal income taxes, it turns out to be a pittance. In fact, for many it's less than a pittance — it's zero.
Of the "rich," the top 5% of all earners now pay 57.1% of all federal income taxes. That's up from 36.8% in 1980. The top 1% pay 36.9%, up from just 19.1% in 1980. The really, really rich — those with more than $1 million in income, or about 181,000 people — pay 19% of all federal taxes.
Not only is the tax code "fair" — it's getting "fairer" all the time, particularly after recent tax cuts. Today, 45 million Americans pay no taxes at all, IRS data show.
The average family in America pays about $5,405 a year. But if you make less than $20,000, according to Congress' Joint Economic Committee, you not only don't pay any taxes on average, the government gives you money. The tax burden for those earners between $20,000 to $30,000 is also small — $520 on average.
Thus, it's surprising to see in our own national poll that 58% of those with less than $30,000 in income think they "pay too much" in taxes, while just 11% say they pay "too little." Especially since just 26% of the same income group say those earning $100,000 or more "pay too much."
The class resentment strikes us as strange, given that studies by the Treasury Department, the Urban Institute and others have shown that most of the people who are poor today will be in one of the higher income categories within a decade.
That is, the world isn't split into rich and poor, but rich and getting richer. What's more, asking who pays what in taxes misses a bigger point: Those with the lowest incomes get far more back from the government than they pay in taxes.
For example, 2002 figures from the Bureau of Labor Statistics' Consumer Expenditure Survey show that those in the poorest 20% of our population earned just 7% as much as the richest 20%. An outrage? Hardly. Because the same data show that the bottom 20% consume more than 24% as much as the top 20%.
How can that be? A study last month by the nonpartisan Tax Foundation sheds some light. It found the lowest-earning one-fifth of all U.S. households received roughly $8.21 in government spending for each dollar of taxes paid. Middle-class families got $1.30 for each buck in taxes. And the return to the highest-earning households was just 41 cents per dollar — that is, they paid more than they got.
So the tax code's "progressiveness" means the average family in the bottom 20% — those with less than $23,700 in income — gets $23,178 in federal spending less federal taxes, almost as much as they earn. Meanwhile, those in the highest income range paid, on average, $38,939 more in total federal taxes than they received.
Fact is, most people have good reason to believe that they're taxed too highly. Another study by the Tax Foundation this month asked people the same question we did. They found 58% of American adults said the federal income tax they pay is too high.
Our tax code is many things. At 66,000 pages and counting, it's much too complex and has far too many exceptions and deductions. It also has too many rates and tends to punish entrepreneurs.
One thing it is not, however, is unfair — that is, unless you think it's unfair to make the most productive members of our society foot the bill for everyone else.
http://www.ibdeditorials.com/images/editimg/issues041607.gif
April 17: It will come as no surprise that the latest IBD/TIPP poll shows more people think they pay too much in taxes than too little. What's intriguing, though, is it's true even for those who pay little or nothing at all.
So what gives? Looking at the data below, you see that fully 58% of all those earning under $30,000 a year say they pay too much in taxes. Meanwhile, the same people are convinced that the "rich" — that is, those with more than $100,000 in household income — aren't paying their fair share.
We don't mean to pick on low-income people. But, as a group, they're younger and less educated than the population as a whole. They are therefore more susceptible to the class-warfare-based lies often promulgated in the media.
Somehow, the notion goes, the rich get tax breaks while the poor end up paying the taxes. That's where the Democratic mantra of "tax breaks for the rich" really gets its traction.
The problem with that, as we've noted in this spot many times, is that it's a total myth. Yet it persists.
When you look at what lower-income Americans actually pay in federal income taxes, it turns out to be a pittance. In fact, for many it's less than a pittance — it's zero.
Of the "rich," the top 5% of all earners now pay 57.1% of all federal income taxes. That's up from 36.8% in 1980. The top 1% pay 36.9%, up from just 19.1% in 1980. The really, really rich — those with more than $1 million in income, or about 181,000 people — pay 19% of all federal taxes.
Not only is the tax code "fair" — it's getting "fairer" all the time, particularly after recent tax cuts. Today, 45 million Americans pay no taxes at all, IRS data show.
The average family in America pays about $5,405 a year. But if you make less than $20,000, according to Congress' Joint Economic Committee, you not only don't pay any taxes on average, the government gives you money. The tax burden for those earners between $20,000 to $30,000 is also small — $520 on average.
Thus, it's surprising to see in our own national poll that 58% of those with less than $30,000 in income think they "pay too much" in taxes, while just 11% say they pay "too little." Especially since just 26% of the same income group say those earning $100,000 or more "pay too much."
The class resentment strikes us as strange, given that studies by the Treasury Department, the Urban Institute and others have shown that most of the people who are poor today will be in one of the higher income categories within a decade.
That is, the world isn't split into rich and poor, but rich and getting richer. What's more, asking who pays what in taxes misses a bigger point: Those with the lowest incomes get far more back from the government than they pay in taxes.
For example, 2002 figures from the Bureau of Labor Statistics' Consumer Expenditure Survey show that those in the poorest 20% of our population earned just 7% as much as the richest 20%. An outrage? Hardly. Because the same data show that the bottom 20% consume more than 24% as much as the top 20%.
How can that be? A study last month by the nonpartisan Tax Foundation sheds some light. It found the lowest-earning one-fifth of all U.S. households received roughly $8.21 in government spending for each dollar of taxes paid. Middle-class families got $1.30 for each buck in taxes. And the return to the highest-earning households was just 41 cents per dollar — that is, they paid more than they got.
So the tax code's "progressiveness" means the average family in the bottom 20% — those with less than $23,700 in income — gets $23,178 in federal spending less federal taxes, almost as much as they earn. Meanwhile, those in the highest income range paid, on average, $38,939 more in total federal taxes than they received.
Fact is, most people have good reason to believe that they're taxed too highly. Another study by the Tax Foundation this month asked people the same question we did. They found 58% of American adults said the federal income tax they pay is too high.
Our tax code is many things. At 66,000 pages and counting, it's much too complex and has far too many exceptions and deductions. It also has too many rates and tends to punish entrepreneurs.
One thing it is not, however, is unfair — that is, unless you think it's unfair to make the most productive members of our society foot the bill for everyone else.
http://www.ibdeditorials.com/images/editimg/issues041607.gif