Tuesday, September 18, 2012

GRAPHIC: Who Pays What Taxes In America?

The internet and political chattering classes are going absolutely bonkers about the revelation that Mitt Romney has nothing but contempt for 47% of the American electorate, when he was caught on video saying:
"There are 47 percent of the people who will vote for the president no matter what. All right, there are 47 percent who are with him, who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it. That that's an entitlement. And the government should give it to them. And they will vote for this president no matter what...These are people who pay no income tax.My job is not to worry about those people. I'll never convince them they should take personal responsibility and care for their lives."
The graphics above show what the distribution of tax payers is in the United States, and it is true that roughly 53.6% of taxpayers pay federal income tax, but it also true that another 28.3% pay federal payroll taxes.

Ezra Klein points out that current tax policy has generally been crafted by Republican presidents and Congresses of the last couple decades:

Part of the reason so many Americans don’t pay federal income taxes is that Republicans have passed a series of very large tax cuts that wiped out the income-tax liability for many Americans. That’s why, when you look at graphs of the percent of Americans who don’t pay income taxes, you see huge jumps after Ronald Reagan’s 1986 tax reform and George W. Bush’s 2001 and 2003 tax cuts. So whenever you hear that half of Americans don’t pay federal income taxes, remember: Ronald Reagan and George W. Bush helped build that. (You also see a jump after the financial crisis begins in 2008, but we can expect that to be mostly temporary.) 
Some of those tax cuts for the poor were there to make the tax cuts for the rich more politically palatable. “Do you think we wanted to include a welfare payment to people who don’t pay taxes and call it a tax cut?” A top Bush administration official once asked me. “No. But that’s what we needed to do to get it done.” 
But now that those tax cuts have passed and many fewer Americans are paying federal income taxes and the rich are paying a much higher percentage of federal income taxes, Republicans are arguing that these Americans they have helped free from income taxes have become a dependent and destabilizing “taker” class who want to hike taxes on the rich in order to purchase more social services for themselves.
As Bill Clinton says, "It takes a lot of brass to blame a guy for something you did yourself."

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