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June 20, 2005

Bogus "Non-Taxpayers" Figures

A number of conservative bloggers are upset with numbers from the Tax Foundation which shows upwards to 40% of Americans are in families not paying income tax. It's ironic they are upset about this, since some of the increase is due to the only decent part of Bush's tax cuts, namely the tax credits for children.

But what is deceptive about the numbers is that many of these "non-taxpayers" are paying quite hefty payroll taxes. A few of the very poorest working families have Earned Income Tax Credits that cancel out their income tax obligations, but that is a far smaller number than the Tax Foundation's worries about those "outside the income tax system."

It's funny-- where is their report about those living off of capital gains and dividends who are scarily "outside the payroll tax" system?

But their political point should worry conservatives, if not the general population:

Are any future tax cuts, or even tax reforms, possible when the lion’s share of the tax burden is increasingly borne by a shrinking pool of taxpayers who – at least on paper – appear to be "upper-income"? And will the expanding pool of non-payers demand even higher income taxes? These are questions lawmakers must begin to debate.
As they say, that's a feature of the Bush tax cuts, not a bug.

Posted by Nathan at June 20, 2005 05:12 PM