Just In: Payroll Taxes Are Taxes

As we all know, right-wing Republicans are very concerned about fairness. Specifically, as Senator Orrin Hatch said last May, they think the tax system is unfair because it doesn’t tax poor people enough. More than half of taxpayers didn’t have any federal income tax liability in 2009, which means most Americans are freeloaders, right?

Actually, no. Less than a quarter of the nation’s households don’t contribute to federal revenues, and the majority are students, the elderly, or the unemployed. A increasingly large proportion of taxes are paid by low- and middle-income Americans in the form of payroll taxes, sales and excise taxes. For example, the federal government collects 18.4 cents on every gallon of gasoline sold.

Today’s Chart of the Day on TPM shows that the proportion of federal revenues from payroll taxes has more than tripled since 1950 (from 11% to 36%), while income tax revenues stayed flat and the corporate income tax shrank.

Tax chart

So when Sean Hannity goes on another rant like this, remember the facts.

“If half of Americans now don’t pay taxes, and the other half are the beneficiaries of the tax that the other half pay, at some point you say, OK, you got a full voting block and it seems like the Democratic Party … caters to that.”

The Republicans crashed the economy, putting millions of Americans out of work and leaving millions more underemployed, and now they want to complain that not enough of us pay income tax? If people earned enough money to owe income tax they would pay!

  1. #1 by Shane Smith on October 21, 2011 - 11:04 am

    Your graph is clearly wrong, it suggests corporate income taxes are shrinking, we all know (thanks to brewski) that they are growing out of control and destroying the economy.

  2. #2 by brewski on October 21, 2011 - 11:36 am

    Dear LYING LIAR who LIES,
    I never said that. You are verifiably wrong again!
    Or you just like LYING.

    You can’t have it both ways on payroll taxes. You keep telling me that payroll taxes are not related to the rest of the government and that they are dedicated ONLY for the benefits of those Trust Funds and not for anything else.

    But now you are using the payroll taxes paid to try to make the point that lower income people do pay lots in taxes for all of the generous benefits that we all enjoy.

    So which is it? You can’t have both.

  3. #3 by Richard Warnick on October 21, 2011 - 11:44 am

    The right is claiming that over half of households aren’t paying taxes. That is the big lie.

  4. #4 by Shane Smith on October 21, 2011 - 1:07 pm

    The funny thing is brewski, based on your reading comprehension, you probably honestly believe you haven’t said the vast majority of the things you have said…

  5. #5 by cav on October 21, 2011 - 1:31 pm

    A humdrum connundrum.

  6. #6 by brewski on October 21, 2011 - 1:40 pm

    Show me where. You can’t since I didn’t. So you lie.

  7. #7 by Andrea on October 22, 2011 - 5:35 pm

    Corporate income taxes are decreasing because about half of all business income is now taxed at the individual level. This was not the case 30 years ago when Subchapter S corporations and LLCs were far less prevalent than they are now.

  8. #8 by brewski on October 22, 2011 - 8:19 pm

    Also, if a C corporation lowers its taxes by taking advantage of provisions passed by Congress for investments in renewable energy production, energy efficiency, research and development, low income housing, etc. and therefore has a much lower reported effective tax rate, then is that a bad thing or a good thing?

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