Headline yesterday on Drudge: “WH Budget Director Blames Defense Cuts on Rich for Not Paying ‘Fair Share’…”
Link to this article:
The Obama administration’s senior budget official blamed nearly $500 billion in looming mandatory defense cuts on “Republican refusal to have the top two percent pay their fair share,” a political jab that many members of the House Armed Services Committee (HASC) deemed offensive.
A different view from Carpe Diem:
The chart above is based on data in the recently-released CBO report “Distribution of Household Income and Federal Taxes, 2008 and 2009,” showing the share of federal income taxes paid by income group in 2009. In 2009, almost all (94.1%) federal income taxes collected were paid by just one-fifth of Americans (top quintile) and the top 1% paid almost 39% of all taxes collected. In contrast, the lowest and second quintiles were net “tax collectors” because that 40% of Americans received more in refundable tax credits than they paid in income taxes.
But all we hear about is how the rich don’t pay their fair share of taxes, and proposals for increasing taxes on “the rich,” like the one from Warren Buffett discussed here.
And this from Tax Prof Blog:
Tax Foundation: Tax Equity and the Growth in Nonpayers:
In 2010, 41% of all tax returns filed had no income tax liability. This represents over 58 million income tax filers.
Nonpayers have grown substantially over the last two decades. In 1990, only about 21 percent of returns had no tax liability, about half of what it is today.
The expansion of tax credits is the primary driver of the increased number of nonpayers. The budgetary cost of tax credits reached $224 billion in 2010.
Though most nonpayers of the income tax are generally low income, the number of nonpayers in middle income categories has grown. The median income of nonpayers has increased by 40% over the last 9 years.
The threshold at which a typical married couple with two children will likely be a nonpayer is now $47,000.
So please, spare me the “fair share” stuff. It isn’t true, and it isn’t helpful. It’s misleading and divisive. I’m really tired of hearing this for four years now.