The most important thing to know about Republican attacks on people who don't pay income taxes is that many of the people who don't pay income taxes believe that they do, in fact, pay income taxes. I tried to make this point a while ago and apparently thoroughly botched it, as Jonathan Chait explained: "Most people make no distinction between 'income tax' and taxes, period." My guess is that a ridiculous majority -- 80%, 90% something like that of those who work but pay no income tax believe that they do, in fact, pay income tax.
If that's the case, then GOP rhetoric here isn't necessarily directed at rich or even middle class (income) tax payers; it may well be directed especially at working class people who don't actually pay income taxes but believe that they do. Indeed, for all I know low-income folks hear the "half of people don't pay income taxes" rhetoric and believe that it's about how working class people do pay taxes while the rich find ways to get out of it. And I say "for all I know" -- but you can be sure that someone is polling and focus-grouping this stuff, so Republicans who are pushing this line are working from evidence. Class warfare, indeed -- but class warfare in which Republican politicians manage to align themselves with virtually everyone who is listening to them, against an unspecified "them" who is getting away with something.
So: hey, pollsters! Could we get some actual facts about how many people think they pay income tax, and who they think doesn't?
Tuesday, August 23, 2011
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I'd be more interested to know how many people don't pay income taxes because they're retired, and have no regular income. These people are also, coincidentally enough, the bedrock of the Fox News audience.
ReplyDeleteI've mentioned this before on your blog, but what's happening here is a semantic sleight-of-hand regarding the meaning of "income tax."
ReplyDeleteWhen people say "income tax" what they generally mean is not "tax on income" but rather a specific kind of tax on income imposed by section 1 of the Internal Revenue Code. Many poor people do not pay this tax.
Social Security and Medicare taxes are assessed on on person's wages; i.e., income. They are therefore properly called "income taxes." But no one considers it "income tax" since it is not the same as the tax on income imposed by IRC section 1. They call it "payroll tax" instead. Almost everyone who works pays this tax.
I don't expect the average American to really be able to grasp the difference in the two ways the term "income tax" is used. I suppose Dem officials/activists could start accusing the GOP of lying when they say half the country pays no income tax. Technically it is a lie because almost everyone pays tax on their income in the form of the payroll tax.
The payroll tax is said not to be an income tax because payers are entitled to a benefit in (more or less) direct proportion to their contribution. But even when federal income tax is narrowly defined as such, the vast majority of the non-payers are old folks, college students, the unemployed, and the disabled.
ReplyDelete..."the vast majority of the non-payers are old folks, college students, the unemployed, and the disabled." And low income working families with children who receive the Earned Income Credit -- a policy begun by Republican President Ford (as an alternative to raising the minimum wage) and expanded by Reagan and Bush I, as well as Clinton. Bush II increased the dependent deduction, most likely putting more families with children into the "non-payer" category.
ReplyDeleteI agree that most working people believe they pay "income taxes." And, in fact, payroll taxes do take a hefty bite out of the income of low wage workers.
I have mixed feelings about the Earned Income Credit -- on the one hand, it does provided needed tax relief to working families. On the other hand, it does, as it was originally intended to, subsidize low wages. (As do several features of the "Welfare reform" of the 1990s.)
JB:
ReplyDelete"Indeed, for all I know low-income folks hear the "half of people don't pay income taxes" rhetoric and believe that it's about how working class people do pay taxes while the rich find ways to get out of it. And I say "for all I know" -- but you can be sure that someone is polling and focus-grouping this stuff, so Republicans who are pushing this line are working from evidence."
Perhaps, but isn't this GOP rhetoric used very closely alongside other GOP rhetoric that emphasizes that taxes on "job creators" and businesses shouldn't be raised, much less considered? The only conclusion is that the candidates are referring to parts of the population that are less than rich. And people of course don't know the details of the tax code by any means, but they are familiar with the general idea of progressive taxation, even if not by that name. Thus this GOP rhetoric must be referring to some subset of people who are less than rich. I'll grant you there's an ambiguity that could exploited, but not one that could imply the GOP wants to raise taxes on people who make a significant amount of money: that's one of the few issues they've continued to be clear about.
The rhetoric could be used to exploit producerist populist resentment against the "unproductive" poor, but I don't see how it can be used to exploit populist resentment against richer segments of the population, given the other existing strongly-libertarian GOP rhetoric being used by every single candidate.
1) I think people do distinguish between "income tax" and other kinds of taxation. It is just not the same distinction the Republicans are making.
ReplyDeleteFor most people "income tax" means any tax that is deducted from their paycheck and any tax that is reflected on their 1040. Most people see this as different from sales tax, which they understand both intellectually and emotionally and from Gas tax which they sometimes understand intellectually but never understand emotionally. In other words, they always know they are paying taxes when they pay sales tax, but seldom think about taxes when they fill up their vehicles.
2) I think it is possible that the point of this great talking point push is to try to get poorer people on the Republican side by fomenting resentment towards "freeloaders." There are a lot of people out there who don't pay income tax, don't realize that they don't pay, and are willing to resent people poorer than them who might be getting away with something.
A good amount of social research has demonstrated that people want to avoid being on the bottom of a social hierarchy even more than they long to be at the top. If the Republicans can pull this off they will align themselves with 90 or 95 percent of the country. This is far better for them than being aligned only with the small number of people who benefit from their policies.
In this way, they can have 45% of the country think that the Republicans are taking their side against some great mass of people out there who are not paying their fair share, unlike those 45% who all see the big chuck FICA and medicare taxes take out of their checks.
All this, while the Republicans are explicitly telling the 45% they intend to raise their taxes. It's a great con if they can pull it off.
Don't forget about state income taxes. A lot of people pay those.
ReplyDeleteThe Republicans have a good point that the tax base may not be broad enough, but they would likely not be so happy if people looked at why the tax base has shrunk. I also think that the Republicans are using the factoid to reinforce their idea that the Democrats promote dependence on government programs. However, this strategy may backfire since we'll have at least one tax cycle, and maybe a bunch of voters will realize a Republican vote may mean the loss of the Earned Income Tax Credit that they just received. Dems, think about those TV ads this spring. Next fall will be too late.
ReplyDelete