Tax Lies That Republicans Tell or Tax Shifting Not Tax Cuts!

Submitted by lightseeker on Sat, 04/12/2008 - 22:02.

It is coming up on April 15th, so it is time for what may become an "evergreen" piece for me. For those who have not wasted too much time reading everything they can get their hands on, an "evergreen" is a news story that never gets retired, it is recycled every year. This evergreen I am going to call Tax Lies that Republicans Tell. It will be a tale of falsehoods, half-truths and tax shifting.

Lets start with this:

The U.S. Income Tax Burden:
The Income Tax Burden is defined simply as who pays U.S. income taxes in the form of individual and corporate income taxes, payroll taxes, and federal excise taxes. Based on this information, the following conclusions clearly emerge:

* An enormous percentage of taxes are payed by a minority of Americans:
o The Top 1% of taxpayers pay 29% of all taxes.
o The Top 5% of taxpayers pay 50% of all taxes.
* Our tax system is not so much progressive as it is confiscatory -- Frederic Bastiat called this phenomenon "legal plunder." A

Every word in the quoted material is true, yet the conclusion drawn is a bald face lie. More below.

The lie in this case is two-fold: which taxes are counted for the comparison and what kind of income is included in the comparison.

Who Really Pays Taxes in America?
...the richest American households pay about 30 percent less tax – which includes federal, state, and local taxes combined -- than middle-income households pay.

All they are comparing is Federal income tax payments, not local taxes, not the particularly regressive Social Security Tax, which no one who makes over 100,000 dollars a year pays at all.

The second omission of the that is that the salary income is the chief source of wealth for the 233,194,000 Americans , but NOT for the more affluent classes who are paying all these "income taxes". The basic income for the more affluent is property income. These number about 98,117,000 . The breakdown is 70% of us are dependent on salaries, and 30% of us depend in dividends, rents, royalties, [ source: Annual Social and Economic (ASEC) Supplement

Of course, some of the income for the properied classes is derived form salaries, thus their inclusion in the analysis here. Let's make this analysis a little more honest. Let's base our analysis of relative tax burden on wealth. See here:

Taxation in the United States - Wikipedia
If the federal taxation rate is compared with the wealth distribution rate, the net wealth (not only income but also including real estate, cars, house, stocks, etc) distribution of the United States does almost coincide with the share of income tax - the top 1% pay 36.9% of federal tax (wealth 32.7%), the top 5% pay 57.1% (wealth 57.2%), top 10% pay 68% (wealth 69.8%), and the bottom 50% pay 3.3% (wealth 2.8%).

Not surprisingly, the the straight lie about the "overtaxed" affluent classes is wearing thin:

Who Really Pays Taxes in America?
...CNN/Money Magazine poll reports that, "60% of Americans said the Bush tax cut did not personally help them.

The poll dates back to the 2004 tax cuts, but the reality it reflects is now. Let's turn form this lie, to the next level of deception, the lie about state tax cuts which are really tax shifts. For all intents and purposes there have been no meaningful tax cuts for moderate to low income tax payers.

Indeed, since the poll was taken, things have only gotten worse for the non-affluent over the last four years. Consumer confidence is at a all time low.

Need I add the increasing rich-poor gap (greater than the Gilded Age), the rising unemployment (officially 5.1% , but really is higher if we stop fudging the figures)?

People's life experiences are trumping the lying theoriticals . Still, we the meme lives on: the "Republicans are tax cutters" . Let look at that lie in the next posting which applies our new understandings to Texas specifically. As a tease:

What’s Really Wrong With The Property Tax
1. The State of Texas relies very heavily on local governments (school districts, cities, and counties) to generate the revenue needed to pay for public goods and services that citizens want and need.
2. Local governments rely very heavily on property taxes for revenue.
[ the actual file is a word doc, so for some reason, I can't directly link to it, you have to search at the site for the titled resource ]

More next time.....

lightseeker's blog
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Of course, some of the

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