Stepping Up the Lies About Taxes
ONLY 85 MILLION ACTUALLY PAY U.S. TAXES
41 percent of those filing returns are non-payersAmericans making over $50,000 paid most of the federal taxes that were paid in the U.S. in 2010.
According to statistics compiled from the Internal Revenue Service (IRS) by the Tax Foundation, those people making above $50,000 had an effective tax rate of 14.1 percent, and carried 93.3 percent of the total tax burden.
In contrast, Americans making less than $50,000 had an effective tax rate of 3.5 percent and their total share of the tax burden was just 6.7 percent.
Egads. This report is full of bullcrap–and it’s getting even more egregious than before.
Drudge was slightly more specific, noting that there were 85 million federal taxpayers. “U.S.” taxes is even more misleading. They are both, however, dead wrong: payroll taxes are “federal” taxes, and all taxes paid to the U.S. and state government are technically “U.S. taxes.” At least previously, they noted that the numbers applied to income tax, though it was de-emphasized; apparently, even that was too honest for them, so now they are making a far more fraudulent claim.
Plus, payroll taxes cap out at about $110,000–meaning someone making a million dollars a year pays no payroll tax on almost 90% of their income, while the “deadbeats” who pay “no” taxes actually pay this tax on 100% of every dollar they earn.
Therefore, a person who made $30,000 in 2010 had to pay a flat 6.2% tax, while Mitt Romney, who made $42 million that year, shelled out a total of… well, almost nothing probably for payroll tax, as the vast bulk of his earnings were not even subject to this tax. Mitt Romney paid nearly 0% (about 6/1000ths of 1%) while a hardworking stiff making minimum wage paid 6.2%! (Actually, 7.65% if you include Medicare taxes–also capped!)
But even if Romney’s $42 million were completely subject to the payroll tax, he’d have paid no more than a grand total of $6,621.60, or roughly 1.6/100th of 1%–because of the cap.
Which is why they dishonestly omit any mention of the payroll tax in the conservative media.
But that’s not all–then there are federal taxes on alcohol, tobacco, tires, gasoline, diesel fuel (adds to shipping and retail costs), coal (adds to your electric bill), firearms, and even telephone service. Most people pay most of those to some degree.
And, all of the above will take a far bigger chunk, percentage-wise, from lower-income earners than it will from higher earners.
Nor is that the end to the dishonesty of the numbers being quoted–books could be written about how much the demarkations, counting tricks, omissions, and number-juggling are being used to create completely false impressions.
Not to mention that all of this ignores state and local taxes, all of which again hit the low wage earners more, especially as wealthy people can move to or even just claim residence in states with the lowest rates.
Suffice it to say that people of low income are being bombarded not just with a far higher tax rate, but with a propaganda barrage designed to make them comfortable with raising their own tax rates even further while giving yet another tax cut to rich people. Or, alternatively, changing to a completely new tax structure which would be even more regressive.
And with far too many people, it’s working.
payroll taxes cap out at about $110,000
the 2.9% Medicare tax has no cap.
also, it’s funny how when I came back to the US the FICA cap was at $76,200, or officially $95,500 in 2010 money. Something funky’s going on with that discrepancy, LOL.
Another thing the propagandists are ignoring is that the top 20% has 93% of the financial wealth in this country.
This is visible by looking at the share of wages vs. GDP:
http://research.stlouisfed.org/fred2/graph/?g=6×2
funny how that is 95% correlated to the party of the president.
The encouraging thing is that at least the national discussion is SLOWLY rotating towards getting more visibility on this topic of income disparity. When I was researching this several years ago there was almost NO DATA on income disparity at all.
The 99% people did a decent job sketching out the problem, but the solution is still eluding them, alas.
Since our national defense expense is protecting the immense wealth of our plutocrats,
shouldn’t they shoulder the great burden it exacts on our economy?
That logic was operative in WW2, but since then the right has done a pretty good job of substituting that tax burden with the choice of buying treasury issues instead.
That’s a good racket — instead of the instant negative return of -100% of the tax hit they had to pay prior to Reagan and earlier, they now get a 2-5% annual return on their contribution.
What’s even funnier is that this no-tax public propaganda campaign is self-defeating for the 1% who own everything.
The relatively low income tax burden on the bottom 50% is essentially a price support for the housing market. Raise taxes on the unwashed masses, and my thesis says rents (and home prices for that matter) simply have to fall in response.
I think I made this same point/conjecture wrt your decision to buy last year, that when income taxes go up in Japan this decade that may not be to so great for home prices (but could/should be good news for rents).
(If I didn’t, I was holding my tongue, LOL)