In recent months, nearly every major Republican candidate has name-checked a popular statistic that 47% of Americans who file taxes paid no income tax in 2009. Given the GOP’s anti-tax zeal you’d think they’d be celebrating. Nope! Republicans now complain that the entire bottom half of taxpayers’ don't pay enough taxes even as they proclaim [rich] Americans are “Taxed Enough Already.”
“Right now we know that 53% of Americans pay income taxes and 47% do not,” Michele Bachmann told Bloomberg TV on Tuesday. “I think we definitely need to change the tax code. We need to get more in line. Everybody benefits from this magnificent country. Everybody pay something.”
Republican presidential candidates are explicitly making the argument that the poor don't pay enough taxes on the same fairness grounds that progressives like Elizabeth Warren have used to demand greater taxes on the rich. The idea isn’t just that tax breaks for the rich trickle down the poor — it’s that they also deserve them more than freeloading Americans. Rick Perry made this moral outrage a key line in his campaign kickoff.
“We’re dismayed at the injustice that nearly half of all Americans don’t even pay any income tax,” Perry said in his announcement speech. “And you know the liberals out there are saying that we need to pay more.”
Now the 47% number only tells part of the story: most of those “non-payers” pay payroll taxes, gas taxes, state and local taxes, etc. And in an ironic twist, the phenomenon is almost entirely a result of Republicans’ own enthusiasm for tax cuts. In the 1980s and 1990s, GOP lawmakers demanded that any programs aimed at helping poor and middle-income households be structured as refundable tax credits, like the Earned Income Tax Credit, rather than as direct payments like welfare. President Bush added to the trend by lowering marginal rates across the board. Then Obama structured large chunks of the stimulus as tax breaks in order to garner bipartisan support. The non-payer rate, which had hovered around 20% - 25% since the 1950s, shot over 30% in 2002 and never looked back. And because the tax credits are refundable, many taxpayers aren’t just paying nothing, they’re actually gaining a net positive on their income tax.
But now that Obama is playing hardball on raising revenue, Republicans are rethinking the idea.
Read the full story @ Talking Points Memo