Republicans want to raise taxes…on the poor!

Republican leaders are offended by the idea that people making less than $40,000 might benefit from the progressive tax code

(New York Times) In a decade of frenzied tax-cutting for the rich, the Republican Party just happened to lower tax rates for the poor, as well. Now several of the party’s most prominent presidential candidates and lawmakers want to correct that oversight and raise taxes on the poor and the working class, while protecting the rich, of course.

These Republican leaders, who think nothing of widening tax loopholes for corporations and multimillion-dollar estates, are offended by the idea that people making less than $40,000 might benefit from the progressive tax code. They are infuriated by the earned income tax credit (the pride of Ronald Reagan), which has become the biggest and most effective antipoverty program by giving working families thousands of dollars a year in tax refunds. They scoff at continuing President Obama’s payroll tax cut, which is tilted toward low- and middle-income workers and expires in December.

Until fairly recently, Republicans, at least, have been fairly consistent in their position that tax cuts should benefit everyone. Though the Bush tax cuts were primarily for the rich, they did lower rates for almost all taxpayers, providing a veneer of egalitarianism. Then the recession pushed down incomes severely, many below the minimum income tax level, and the stimulus act lowered that level further with new tax cuts. The number of families not paying income tax has risen from about 30 percent before the recession to about half, and, suddenly, Republicans have a new tool to stoke class resentment.

Representative Michele Bachmann noted recently that 47 percent of Americans do not pay federal income tax; all of them, she said, should pay something because they benefit from parks, roads and national security. (Interesting that she acknowledged government has a purpose.) Gov. Rick Perry, in the announcement of his candidacy, said he was dismayed at the “injustice” that nearly half of Americans do not pay income tax. Jon Huntsman Jr., up to now the most reasonable in the Republican presidential field, said not enough Americans pay tax.

Representative Eric Cantor, the House majority leader, and several senators have made similar arguments, variations of the idea expressed earlier by Senator Dan Coats of Indiana that “everyone needs to have some skin in the game.”

This is factually wrong, economically wrong and morally wrong. First, the facts: a vast majority of Americans have skin in the tax game. Even if they earn too little to qualify for the income tax, they pay payroll taxes (which Republicans want to raise), gasoline excise taxes and state and local taxes. Only 14 percent of households pay neither income nor payroll taxes, according to the Tax Policy Center at the Brookings Institution. The poorest fifth paid an average of 16.3 percent of income in taxes in 2010.

Economically, reducing the earned income tax credit and the child tax credit — which would be required if everyone paid income taxes — makes no sense at a time of high unemployment. The credits, which only go to working people, have always been a strong incentive to work, as even some conservative economists say, and have increased the labor force while reducing the welfare rolls.

The moral argument would have been obvious before this polarized year. Nearly 90 percent of the families that paid no income tax make less than $40,000, most much less. The real problem is that so many Americans are struggling on such a small income, not whether they pay taxes. The two tax credits lifted 7.2 million people out of poverty in 2009, including four million children. At a time when high-income households are paying their lowest share of federal taxes in decades, when corporations frequently avoid paying any tax, it is clear who should bear a larger burden and who should not.

Originally published in The New York Times on August 30, 2011

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7 Responses to Republicans want to raise taxes…on the poor!

  1. The Lawyer

    September 1, 2011 at 9:30 am

    And Republicans are always the first to scream “class warfare.”

  2. just saying

    September 1, 2011 at 11:22 am

    And wouldn’t they (47%) be the majority of voters?

    just saying…

  3. Bob Keller

    September 1, 2011 at 2:25 pm

    Most taxes unfairly target the poor: Sales Tax is by far the worst offender. Almost every tax, EXCEPT THE INCOME TAX, is regressive.

    However, we don’t solve that problem by exempting 1/2 of all Americans from Income Tax.

    Keep in mind, if we really, REALLY, REAllY roll back ALL the Bush Tax Cuts (not just on those making over $250,000.00), the poor and middle class will get clobbered!!!!

    Also keep in mind that every National Debt and deficit projection by the CBO does envision rolling back ALL Bush Tax Cuts (not just the over $250,000.00 portion).

    There are no easy solutions.

  4. Bradley Scott

    September 1, 2011 at 11:42 pm

    A warning to Republicans: Screw with the works of St. Ron at your own peril!! No one else in recent presidential memory is more revered by your potential voters than The Gipper.

    • John Myste

      September 3, 2011 at 2:25 pm

      Yes, St. Ron is revered, but not for his beliefs, policies or actions. He is revered for having the current conservative philosophy, a philosophy that would have shamed him deeply, and one he certainly never embraced.

      Reagen was not a Reagenite, just as Jesus was not a Christian.

      • Collin Hinds

        September 3, 2011 at 2:55 pm

        St. Ron is exactly like God in one respect. People constantly justify their own shortcomings by attributing them as an essential characteristic of the Almighty.

  5. Anonymous

    December 4, 2012 at 10:03 pm

    The wealthy cannot afford to pay a little more in tax – but the State of California state workers took salary cuts of 10% because of the budget crisis. It is the least able to pay that seems to take the cuts all the time. The poor are lucky to earn one million in their entire working life. The wealthy make that in 8 years if they are at the bottom, $250,000 per year. Is this the America you want to live in – tax the poor and the wealthy just get more and more. And who gets all the perks? Do you think the lowly state worker gets any perks. They pay parking while the head of the UC system receives $8000 in car allowance -why, he cannot afford a car on a salary of over $400,000 per year. I really wish someone could explain all this to me. This sickens me.