Thursday, October 13, 2011

Taxes and who pays them

This article from discusses the conservative charge that 47% of Americans don't pay any income  taxes. Liberals immediately counter that there are other taxes such as payroll and sales taxes that hit the poor harder. Who's right? As usual in politics,there's some truth (and falsehoods) on both sides.

It is not true that 47% of the population pays no taxes; conservatives who argue this aren't considering the entire tax picture.  But liberals are wrong when they say that the tax code is biased in favor of the rich, Warren Buffett notwithstanding. (Google logical fallacies-argument from authority).  Even adjusting for payroll taxes, the rich pay a far higher % of their income than the poor/middle class. This chart from the centrist Tax Policy Center breaks the tax burden down by quintiles. The bottom 60% pay a much lower tax rate than the top 20%.  The tax rate goes up as income goes up at every level. 

On a side note, the author states: "In short, it is not that they are not paying their taxes. It is that the country’s tax structure lets them off the hook."  I don't see a distinction here. Here comes a  sports analogy (sorry,couldn't resist): It's not that I don't play for the Chargers, it's just that their strength and athletic requirements keeps me off the team.

No comments: