Wednesday, August 24, 2011

“We’re dismayed at the injustice that nearly half of all Americans don’t even pay any income tax.” - Update

The day after my post regarding Governor Perry's quote, the Wall Street Journal published a very similar article. The graph from the Tax Policy Center contained in the WSJ article is much more readable than the two graphs I used from their earlier report.
Also since I posted on this subject there have been two alternative explanations to mine about why the issue of a regressive versus progressive income tax has arisen again. First, David Wiegel for Slate in Republicans for Tax Hikes:
When the Tea Party started rallying in 2009, it wasn't protesting higher taxes, because federal income taxes were lower, with more loopholes. It was protesting the perception that productive Americans were shelling out for an ever-expanding class of moochers. And Republicans have taken the Tea Party's lead.
Yesterday, Ezra Klein took up this issue in Wonkbook: Since when do Republicans want to raise taxes?
My view is that this is a mixture of partisanship, politics and ideology. The partisanship part is Democrats want the payroll tax cut extended, so Republicans don't. The politics bit: Democrats are making Americans angry with poll-tested language arguing that the rich don't pay enough, so Republicans are responding with an argument that the poor are mooching off the middle class. Then there's the underlying ideological framework: Republicans believe, either implicitly or explicitly, that the economy is really driven by well-compensated, wildly productive geniuses at the top, and so the true aim of tax policy is keeping their tax burden low so they have sufficient encouragement to unleash their potential.

But whichever explanation you go with, the bottom line is the same: we're not really having a discussion about taxes, yea or nay, in this country. We're having a discussion about the distribution of the tax and deficit-reduction burden, and the two sides' opinions on that question are driving their take on taxes.
A final comment: The WSJ may regret bringing this subject up again. It reminded me of their infamous "lucky duckies" editorial from 2002, which was taken off-line after being widely ridiculed. John Buck posted it here.  "Lucky duckies" has been a small or large part of tax discussions ever since, and a great series of cartoons starring the Lucky Ducky have also arisen. Here is the first panel of one cartoon.

The cartoon series continues, and here is a link to Tom the Dancing Bug: Lucky Ducky in “Slick Deal” about oil drilling in the Gulf of Mexico. A web search will turn up many more.




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