Class warfare and tax cuts for the rich

This claim that 51% of Americans don’t pay taxes — does anyone know where they fit in the economics scheme of things?

I wonder, partly because it’s mentioned over at Disaffected and It Feels So Good, and partly because in the light of what else is said over there, it’s relevant.

What is that blog saying?

The Heritage Foundation’s 2001 report proclaimed if the Bush tax cut legislation were to pass, it would:

1) Effectively pay off the federal debt;
2) Reduce the federal surplus by $1.4 trillion;
3) Substantially increase family income;
4) Save the entire Social Security surplus;
5) Increase personal savings;
6) Create more job opportunities.

Everyone of those claims did not happen and in fact the exact opposite occurred. But, what did happen was a massive transfer of wealth to the Ultra-Wealthy, which were the true goals of the Bush Tax Cuts.

Be sure to see the clip from Jon Stewart’s program about how America’s poor are really rich, and we could balance the budget on that demographic alone.

Who pays taxes, and is it fair?  Odd to me that the assumption is it’s the poor who don’t pay taxes, and that it’s unfair to the rich because the poor are living so high on the hog.

Evidence, anyone?

12 Responses to Class warfare and tax cuts for the rich

  1. For Morgan, Lower and Grif to choke on:–on-the-middle-class-and-working-poor/2011/08/23/gIQAEDJuZJ_story.html

    Meyerson, Published: August 23

    America’s presumably anti-tax party wants to raise your taxes. Come January, the Republicans plan to raise the taxes of anyone who earns $50,000 a year by $1,000, and anyone who makes $100,000 by $2,000.

    Their tax hike doesn’t apply to income from investments. It doesn’t apply to any wage income in excess of $106,800 a year. It’s the payroll tax that they want to raise — to 6.2 percent from 4.2 percent of your paycheck, a level established for one year in December’s budget deal at Democrats’ insistence. Unlike the capital gains tax, or the low tax rates for the rich included in the Bush tax cuts, or the carried interest tax for hedge fund operators (which is just 15 percent), the payroll tax chiefly hits the middle class and the working poor.

    And when taxes come chiefly from the middle class and the poor, all those anti-tax right-wingers have no problem raising them. In an editorial this weekend, the Wall Street Journal termed the payroll tax reduction “an inferior tax cut,” arguing that tax cuts should be “broad-based, immediate and permanent.” Broad-based? The payroll tax cut, which the Journal dismisses so contemptuously, benefits every employed American, while the tax cuts the paper champions — on capital gains and millionaires’ income — accrue to a far smaller group. Immediate? Unlike taxes paid annually or quarterly, the payroll tax is drawn from each paycheck from the moment the law takes effect. Permanent? The payroll tax is the tax that funds Social Security, so reducing it really can’t be a permanent policy. But the impermanence of the Bush tax cuts, which had been set to expire this year but were extended, presented no obstacle to the Journal’s fervent support for them.

    This tax-Joe-Six-Pack mania doesn’t end with the Journal. While President Obama has made clear that he supports extending the lower 4.2 percent payroll tax rate for another year, to keep the economy from contracting further, congressional Republicans have made their opposition equally clear. “I don’t think that’s a good idea,” said Dave Camp (R-Mich.), chairman of the tax-writing House Ways and Means Committee. Camp complained that it would push the deficit higher. House Budget Committee Chairman Paul Ryan (R-Wis.), the man who’d have us scrap Medicare, concurred. “It would simply exacerbate our debt problems,” he said on Fox News Sunday this month.

    This concern for the debt, touching though it may be, didn’t keep Republicans from enacting two waves of tax cuts under George W. Bush. It hasn’t kept them from opposing our current president’s proposal to restore the Clinton-era tax rates on the wealthy. But when we’re talking about taxes on the majority of Americans, those who work for a living and don’t make six-figure incomes, the Republican brain lobe devoted to debt reduction through tax increases goes abuzz with synaptic frenzy.

    The most telling Republican reaction to the president’s proposal to extend the lower rate has been one man’s equivocation. The man is Grover Norquist, author of the anti-tax-increase pledge that the vast majority of House Republicans have signed. On Tuesday, pressed by a number of journalists (most prominently, The Post’s Greg Sargent) to state his position on raising the payroll tax, Norquist sought to quietly steal away. “One would have to see the final legislation,” his spokesman, John Kartch, told Sargent, to determine “what is the net effect on total taxes.”

    But unless Congress votes to extend it, the lower rate will expire on Jan. 1 regardless of its effect on total taxes. Norquist flat-out opposed letting the Bush tax cuts expire — though he did tell The Post’s editorial board that it didn’t technically violate the pledge, a position that he has since tried to obfuscate. Now that the payroll tax is slated to expire, though, Norquist is lost in contemplation (or something). Congressional Republicans inclined to increase the payroll tax — and I’m not aware of any who have come forth to oppose that idea — can do so, apparently, without fear of being labeled tax-increasers just because they’ve increased taxes.

    Republicans like to complain that Democrats practice “class warfare” and “the politics of division,” as House GOP leader Eric Cantor argued on this page Monday. What the Republicans’ position on the payroll tax makes high-definitionally clear is their own class warfare on working- and middle-class Americans. Their double standard couldn’t be more obvious: Tax cuts for the wealthy are sacrosanct; tax cuts for everyone else don’t really matter. Norquist, Cantor, Ryan, Camp, the Journal editorialists and the whole Republican crew give hypocrisy a bad name.


  2. James Kessler says:

    To quote:
    Low income households are disproportionately single adult households. Low income households pay other taxes such as payroll taxes. Even if the statistic is intended to be “Americans”, 24% of Americans are under 18 and we would expect them to pay no taxes.

    The payroll tax is the only tax that the Republicans are willing to raise. Because in the Republican mindset it is better for those living pay check to pay check pay higher taxes while those who have more money then King Midas continue to get tax cut after tax cut.

    So once again you have the Republicans protecting the rich from paying higher taxes while simutaneously demanding that the rest of us lose our entitlements and pay higher taxes.

    Grif if you’re still here instead of being nothing more then a hit and run troll would you care to try and explain how the Republicans are “for the middle class” again?


  3. James Kessler says:

    And in another example of the Republicans being “for the middle class” Rick Perry wants to get rid of the 16th amendment and replace the income tax with a sales tax.

    Wait…a sales tax is inherently regressive and would mean a tax increase on the poor and the middle class and a tax cut on the rich you say?

    So much for the claim that Republicans are for the middle class.


  4. James Kessler says:

    And then, rather offtopic though I’m arguing that its relevent because it shows another example of right wing moral depravity, there is this:

    Pro-Life Republican Kansas Governor Guts Funding For Dying Infants
    August 21, 2011
    By Stephen D. Foster Jr.

    Governor Sam Brownback (R-KS) AP Photo/Casper Star-Tribune, Dan Cepeda

    Another supposed pro-life governor has decided that children outside the womb are less important than those inside the womb. Kansas Governor Sam Brownback is gutting the agency responsible for child protective services, child support enforcement, and child, adult and family well-being services, after a failed attempt to slash funding for Head Start.

    Despite being able to find enough money to fund faith-based initiatives, Brownback is closing 8 Kansas Department of Social and Rehabilitation Services centers, citing agency cost savings. A ninth center was saved because of public outcry.

    Reducing the number of children in poverty is supposedly one of Brownbacks goals but cutting essential services that aid vulnerable children is NOT helping them stay above the poverty line. It leaves children in serious risk of dying from hunger or sickness. And the statistics are not in Kansas favor. The state dropped to 40th in infant mortality, and has the terrible distinction of being the worst in the country in terms of African-American infant mortality.

    Governor Brownback is an enemy of children in Kansas. He is killing children with the destructive policies of the religious right, so that he can replace them all with fetuses that will be at risk after birth. Its a sad reality we are living in, when we allow children that are already born to die in an effort to control what a woman decides about her pregnancy.


  5. Ellie says:

    Mark, you must have been reading the Heritage Foundation report. Don’t forget, we aren’t poor because we have more living space than do people in France and we don’t have to share a toilet with the neighbors.


  6. ruidh says:

    It’s a mangled statistic. The actual statistic is something like 48 or 49% of *households* pay no *income tax*. This gets approximated to “half” and “half” gets mangled to something more than half. Along the way, households is replaced with Americans.

    Low income households are disproportionately single adult households. Low income households pay other taxes such as payroll taxes. Even if the statistic is intended to be “Americans”, 24% of Americans are under 18 and we would expect them to pay no taxes.


  7. mark says:

    We know that the poor are actually wealthy, because more than half of them have a microwave oven, video game, and/or an air conditioner.


  8. James Kessler says:

    Oh yes, the Republicans sure do *love* the middle class and the poor and aren’t coddling the rich:

    WASHINGTON (AP) — News flash: Congressional Republicans want to raise your taxes.

    Impossible, right? GOP lawmakers are so virulently anti-tax, surely they will fight to prevent a payroll tax increase on virtually every wage-earner starting Jan. 1, right?

    Apparently not.

    Many of the same Republicans who fought hammer-and-tong to keep the George W. Bush-era income tax cuts from expiring on schedule are now saying a different “temporary” tax cut should end as planned. By their own definition, that amounts to a tax increase.

    The tax break extension they oppose is sought by President Barack Obama. Unlike proposed changes in the income tax, this policy helps the 46 percent of all Americans who owe no federal income taxes but who pay a “payroll tax” on practically every dime they earn.

    There are other differences as well, and Republicans say their stand is consistent with their goal of long-term tax policies that will spur employment and lend greater certainty to the economy.

    “It’s always a net positive to let taxpayers keep more of what they earn,” says Rep. Jeb Hensarling, “but not all tax relief is created equal for the purposes of helping to get the economy moving again.” The Texas lawmaker is on the House GOP leadership team.

    The debate is likely to boil up in coming weeks as a special bipartisan committee seeks big deficit reductions and weighs which tax cuts are sacrosanct.

    At issue is a tax that the vast majority of workers pay, but many don’t recognize because they don’t read, or don’t understand their pay stubs. Workers normally pay 6.2 percent of their wages toward a tax designated for Social Security. Their employer pays an equal amount, for a total of 12.4 percent per worker.

    As part of a bipartisan spending deal last December, Congress approved Obama’s request to reduce the workers’ share to 4.2 percent for one year; employers’ rate did not change. Obama wants Congress to extend the reduction for an additional year. If not, the rate will return to 6.2 percent on Jan. 1.

    Obama cited the payroll tax in his weekend radio and Internet address Saturday, when he urged Congress to work together on measures that help the economy and create jobs. “There are things we can do right now that will mean more customers for businesses and more jobs across the country. We can cut payroll taxes again, so families have an extra $1,000 to spend,” he said.

    Social Security payroll taxes apply only to the first $106,800 of a worker’s wages. Therefore, $2,136 is the biggest benefit anyone can gain from the one-year reduction.

    The great majority of Americans make less than $106,800 a year. Millions of workers pay more in payroll taxes than in federal income taxes.

    The 12-month tax reduction will cost the government about $120 billion this year, and a similar amount next year if it’s renewed.

    That worries Rep. David Camp, R-Mich., chairman of the tax-writing Ways and Means Committee, and a member of the House-Senate supercommittee tasked with finding new deficit cuts. Tax reductions, “no matter how well-intended,” will push the deficit higher, making the panel’s task that much harder, Camp’s office said.

    But Republican lawmakers haven’t always worried about tax cuts increasing the deficit. They led the fight to extend the life of a much bigger tax break: the major 2001 income tax reduction enacted under Bush. It was scheduled to expire at the start of this year. Obama campaigned on a pledge to end the tax break only for the richest Americans, but solid GOP opposition forced him to back down.

    Many Republicans are adamant about not raising taxes but largely silent on what it would mean to let the payroll tax break expire.

    Republicans cite key differences between the two “temporary” taxes, starting with the fact that the Bush measure had a 10-year life from the start. To stimulate job growth, these lawmakers say, it’s better to reduce income tax rates for people and for companies than to extend the payroll tax break.

    “We don’t need short-term gestures. We need long-term fundamental changes in our tax structure and our regulatory structure that people who create jobs can rely on,” said Sen. Lamar Alexander, R-Tenn., when asked about the payroll tax matter.

    House Majority Leader Eric Cantor, R-Va., “has never believed that this type of temporary tax relief is the best way to grow the economy,” said spokesman Brad Dayspring.

    The nonpartisan Congressional Budget Office says payroll tax reductions give the economy a short-term boost. But it says the benefit is bigger if employers get the tax break instead of, or along with, workers.

    Some top Republicans have taken a wait-and-see approach, expecting the payroll tax issue to be a bargaining chip in the upcoming debt reduction talks.

    Neither House Speaker John Boehner, R-Ohio, nor Senate Minority Leader Mitch McConnell, R-Ky., has taken a firm stand on whether to extend the one-year tax cut.

    Most GOP presidential candidates also are treading lightly.

    Former Massachusetts Gov. Mitt Romney did not flatly rule out an extra year for the payroll tax cut, but he “would prefer to see the payroll tax cut on the employer side” to spur job growth, his campaign said.

    Former House speaker Newt Gingrich said Republicans will fall under increasing pressure to extend the payroll tax cut. If they refuse, he said in a recent speech, “we’re going to end up in a position where we’re going to raise taxes on the lowest-income Americans the day they go to work.”

    Many Democrats also are ambivalent about Obama’s proposed tax cut extension. They are more focused on protecting social programs from deep spending cuts. Some worry that a multiyear reduction in the tax designated for Social Security could undermine that program’s health and stature.

    For decades the payroll tax generated more revenue than the Social Security paid out in benefits. The excess was used to fund other government operations. Last year, however, Social Security benefits began outstripping revenue from its designated sources, forcing the program to start tapping its “trust fund” of government obligations.

    So Bob, Morgan and Lower…are you fine with the Republicans raising your taxes but not the taxes on the Koch brothers?


  9. James Kessler says:

    Bob writes:
    Promises unkept is SOP from Washington. Sure am glad the Dems are in now, becuase we know they NEVER promise and not deliver.

    Well maybe if your precious Republicans had put the country ahead of their politics for once and worked with the Democrats instead of hindering everything..including ideas that were Republican in origin…we wouldn’t be in this mess, Bob.

    Surely you can answer Ed’s question. What evidence do you have that cutting taxes to the rich have done what the republicans have promised they would do?


  10. Ed Darrell says:

    Mr. Barton, the question I am pursuing is this: Do tax cuts work to do what is claimed they do?

    Evidence so far does not look good. Can you offer evidence that tax cuts to the “job makers,” also known as wealthy, make jobs?


  11. Bob Barton says:

    Promises unkept is SOP from Washington. Sure am glad the Dems are in now, becuase we know they NEVER promise and not deliver.


  12. Pangolin says:

    You poor deluded soul.

    You seem to be under the misguided notion that conservatives stand by their prior statements and have any concern whatsoever about those statements accuracy. Not a chance in heck of that happening.

    Didn’t George W. Bush run on a platform of no deficit spending, no foreign wars, and realistically addressing Climate Change? Didn’t he claim to be a “compassionate conservative.” Where was the outcry from conservatives four years later when the U.S. had invaded two countries, was running massive deficits while simultaneously George W. ran a never faltering campaign to loot the Social Security trust fund and give it to Wall Street to play with.

    Where was the outcry from the “honorable, Christian, right-wing” of America’s political spectrum. Crickets.

    They will say any damn thing whatsoever to put more money in the hands of their cronies. There is no crime they will not commit. No article of the Constitution they will not trample on. No lie they will not tell. They do NOT care.


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