If you had the misfortune of watching Weekends with Alex Witt on MSNBC Saturday morning, you sadly were treated to four minutes of propaganda about how we Americans just don’t pay enough taxes – period!
CQ Roll Call’s David Hawkings was invited on to misinform the gullible about Americans’ tax rates being too low, corporations shirking their tax responsibilities, the poor paying more than conservatives contend, and, of course, the rich not paying their “fair share” (video follows with transcribed highlights and commentary):
“If you take all the taxes paid in the United States and you compared them against other countries, the U.S. overall taxes are the lowest as a percentage of the economy among developing countries,” said Hawkings. “About one out of every four dollars in the whole economy is paid in taxes. That’s lower than any other country in the developed world. In Denmark it’s as high as about 50 percent.”
I realize this might seem like an odd question, but what is the goal of a capitalist system? Is it for the citizens to pay the highest taxes possible or for them to build their own wealth?
If the goal is the former, I’d suggest even Denmark is failing: why stop at 50 percent?
But here in America, which was founded by former British citizens escaping the King’s confiscatory taxes, we have historically strived for the tax burden to be as low as possible, even as low as zero during peacetime.
Yet Hawkings seemed a bit confused about our tax history saying, “If you compare the U.S. taxes now to where they have been historically, lower than almost any year in recent memory. The income tax has been around for about a hundred years. For about half that time the tax rate has been higher than it is now for the top earners.”
Well, that means that half of those roughly 100 years, the tax rate for top earners has been lower. Now add the 100-plus years prior to that and taxes on the most successful are now actually higher than they’ve historically been.
Not surprisingly, such logic escaped Hawkings and Witt.
When the subject of what America’s poor pay in taxes surfaced, Hawkings said, “Conservatives point out that in fact as many as half of Americans in the last year paid no income taxes, no traditional IRS income taxes. But let’s remember that nine percent were unemployed, some are elderly and disabled, and almost all the rest of them pay those payroll tax deductions that we see in our paychecks that come out for Medicare and Social Security.”
Yes, but according to the Congressional Budget Office, in 2006, the bottom quintile in the nation paid just 0.8 percent of all federal taxes collected including income, payroll, excise, and corporate.
That’s right: the poorest 20 percent paid only 0.8 percent.
By contrast: the richest 20 percent paid 69.3 percent; the richest ten percent paid 55.4 percent; the richest 5 percent paid 44.7 percent, and; the richest one percent paid 28.3 percent.
Maybe more importantly, as can be plainly seen from the following CBO chart, what the poor have been paying has been declining since 1979 while what the upper-earners have contributed has steadily risen:
Not surprisingly, neither Hawkings nor Witt brought this up either.
But what did surface, of course, was the fiction that the rich just aren’t paying their “fair share.”
“Historically, the top one percent of Americans pay a big chunk of the taxes,” said Hawkings. “Conservatives say in fact they pay about a quarter of the taxes, but they make 40 percent of the money. That much is true, but again, like we were talking about a minute ago with the corporations, the rich have an enormous advantage in terms of their deductions. They can deduct their capital gains taxes, they can deduct charitable donations. They have a better job with their accountants and in some cases their own lobbyists keeping their tax rate low.”
Maybe so, but what Hawkings dishonestly ignored is that with all that, the rich still pay more as a percent of both taxable and adjusted gross income than lower wage earners.
The IRS tables for 2009 show folks making $200,000 or more paid between 26.3 and 28.6 percent of their taxable incomes. By contrast, those making less than $200,000 paid between 17.8 and 22.1 percent.
As such, the progressive nature of our tax code – meaning folks that make more pay more – is still quite intact in America despite the carping and whining of liberals about the rich not paying their “fair share.”
If only it were required that actual real tax percentages reported by CBO and the IRS be included in such discussions.
It would make it much more difficult for the Left to continually propagandize the nation about who is and who isn’t paying taxes.