It’s that time of year again; time to grab your ankles and cough one up for Uncle Sam between now and April 15th. In honor of all you folks out there getting ready to file your tax papers, and hopefully get a nice refund in the mail, here’s a short list of the five biggest whoppers tax hating, government cutting, tea bagging Republicans (and a handful of wayward Democrats) love to trot out whenever the subject of funding our society comes up.
Lie: Half of All of Americans Don’t Pay Taxes
Truth: All Americans Pay Taxes
Every election year, mouth breathing politicians and their pinhead friends in the media try to gin up anti-government hysteria by claiming half of all Americans don’t pay a dime in taxes. They do this to try and avoid the real question everybody’s asking, which is, how come the rich don’t pay their fair share of taxes?
There’s plenty of reasons why this is, not the least of which is that rich people don’t typically earn their incomes like you and I do. Rich bastards get most of their money from investments, which for tax purposes are called capital gains. Capital gains, a.k.a. money for nothing, is taxed at a much lower rate than wages somebody had to sweat and toil in the hot sun or the pouring rain to earn.
The truth is, working people, especially those who make considerably less than $100,000 per year, pay a helluva lot more in federal payroll taxes than investors like Mittens Romney, or sociopaths like Newt Gingrich ever will. About seventy-five percent of all American households actually pay more in payroll taxes than they do in federal income taxes.
The reason most low income folks don’t pay anything in federal income taxes is because they qualify for tax credits like the earned income tax credit (EITC), which gives us an incentive to go to work every day at a job we hate for people who think we’re either criminals out to rob them or dirt under their feet, rather than just lying around the shack all day, smoking weed and making babies. Stick that in your tea cup and drink it on your way to the party.
Lie: The American People and Corporations Pay the Highest Taxes in the World
Truth: The US Has the Third Lowest Taxes of Any Developed Country in the World
Tax rates in the U.S. are currently the lowest we’ve seen since before 1960. We have the third lowest level of total taxation of any member of the Organisation for Economic Co-operation and Development (OECD), except Chile and Mexico. President Obama actually cut taxes for 98 percent of the American people.
The claim that we have the second highest corporate tax rate in the world is utter bullshit too. On paper it might be true, but in practical reality – that place where we all live, work, and get raped by our insurance company – the effective rate corporations pay is much, much lower. Thanks to an ocean of corporate tax breaks and loopholes, the United States actually has the second lowest coporate taxes as a share of GDP of any nation in the OECD. Hell, more than twenty-five major corporations, including Verizon, Boeing and GE, paid nothing, nada, ZERO in corporate taxes over the last few years. Pretty sweet deal, if you can get in on it.
Lie: Cutting Taxes Creates Jobs and Increases Revenues
Truth: Tax Cuts Reduce Revenue and Have Nothing to Do With Economic Growth
Since the reign of St. Ronnie of Teflon, the myth of tax cuts for the rich has been regarded by conservative true believers as a holy sacrament, like some magical incantation for creating jobs and increasing government revenue with the wave of a magic wand . *POOF* You’re suddenly prosperous! Money for nothing dude, free lunch for everyone!
In reality, tax cuts, especially for the wealthy, tried in every combination imaginable for more than three decades now, have proven to be an epic failure on all accounts, but conservatives are a tenacious bunch, never prone to letting reality stand in the way of a good plan so why start now?
History has shown us over and over and over again that the tax rate levied against the super rich has not one fucking thing to do with economic growth or job creation. Think about all the growth we had after President Clinton increased taxes in the nineties and compare that with the piss poor record job creation following the Bush tax cuts.
Republicans, you are entitled to your own opinions. You are not entitled to your own set of facts.
Lie: Wealthy People Carry an Unfair Proportion of Our Tax Burden.
Truth: Given the Current Economic Situation, the US Tax System Might as Well Be Flat.
Conservatives are always whining about how unfair it is to raise taxes on the super rich because they already pay a disproportionate share of the tax burden. They like to point out how the top one percent of income earners already pay 38 percent of all federal income taxes collected, but in the process they completely ignore the fact that the federal income tax is just one of the many taxes and usage fees we all have to pay.
If you account for all the taxes that everyone in this country pays, the reality is that our system is basically a flat rate system. The top one percent “earns” about 20 percent of the total income, but pays only about 21 percent of total taxes paid. Meanwhile the bottom 20 percent of wage earners collectively take home about 4 percent of total income while paying roughly two percent of total taxes.
Think about that for a minute, cause this next bit is liable to blow your tiny little Republican brain right through the back of your skull.
Those with more money do pay a higher percentage of taxes, but that’s because they earn a much higher percentage of the total income. Now I know that must seem terribly unfair, so let me tell you what I’m willing to do, lets trade places for a year.
Lets see if I can make it on 80 percent of say… $2 million dollars, for a year. While I’m struggling to learn how to manage those enormous bank accounts, let’s find out if Richie Rich (or Mittens, or Newt, or whoever) can get by on 98 percent of $20,000 for the same period.
Come see me when we’re done and we’ll talk some more about cutting that excessive top tax rate so we can eviscerate a few more programs like food stamps, Medicaid, or Head Start.
Lie : A flat tax would be much more “fair”
Truth: The “Fair Tax” or a Flat Tax Would Make Our Tax System Even More Regressive
Speaking of a flat taxes, whether it’s Steve Forbes yapping about his proposal a few years ago or Newt flapping his gums today, the idea of scrapping our current not-yet-progressive-enough tax system and replacing it with a flat income tax or a national sales tax is a perennial dead horse Republican presidential candidates just love to flog. I’m here to tell you now, once and for all, that dog doe not hunt.
The simplicity of flat tax rates appeal to a lot of my mathematically challenged brothers and sisters, but that’s just what it is, an over simplification. It sounds to good to be true because it is too good to be true.
A flat tax would be far more regressive than anything our current system ever dreamt of being. One recent analysis of a flat tax proposal indicated that it would result in an average tax increase of over $2,800 for the bottom 95 percent of us – poor, working class, and the upper middle class combined – while the top one percent would receive an average tax cut of almost $210,000.
And don’t go getting any crazy ideas about a national sales tax either. According to the Institute on Taxation and Economic Policy’s analysis of the so-called “Fair Tax”, any national sales tax designed to replace our income tax system would have to be set at at least 45 percent.
Eighty percent of us would end up paying about 51 percent more in taxes than we do now. Is that really what you want? Okay let’s try it. I’m getting by without life or medical insurance already, but I’m sure I can find somewhere to tighten the old belt a little more; maybe skip a few meals every week.
Look, the complexity of our tax code – the thing a flat tax would supposedly fix – is not the product of our current progressive tax structure; it’s the result of mountains of industry specific loopholes and deductions dreamed up to keep the super rich and their transnational corporations from having to carry their fair share of the burden.
We don’t need a new tax system in this country, we just need to eliminate the special treatment some people have purchased for themselves and their business interests via armies of lobbyists and lawyers that most of us can’t afford.
Don’t buy into the bullshit!
(Tip of the hat to Citizens for Tax Justice, whose hard work I ripped off in putting this post together)