Far East Cynic

Don’t kid yourself-a lot of people really believe it.

Facebook sentiments are a rather inaccurate measure of public opinion to be sure. But if the views of my more conservative Facebook friends are any measure-all of the people who are pronouncing Romney’s campaign “dead” based on his rather infamous “47 percent of the country is irresponsible” remarks, are acting prematurely. About this year’s Presidential race, I am totally pessimistic. Romney will come back from it, and there are more than a few people out there who wish to delude themselves about their relationship with their government. Even as the Treasury makes monthly deposits in their bank accounts.

I think that depresses me the most. Hearing people who are equally, if not more, a recipient of governmental largess- whine and complain about how their fellow citizens are “parasites” and other even less complimentary terms. Paul Krugman was right,

For the fact is that the modern Republican Party just doesn’t have much respect for people who work for other people, no matter how faithfully and well they do their jobs. All the party’s affection is reserved for “job creators,” a k a employers and investors. Leading figures in the party find it hard even to pretend to have any regard for ordinary working families — who, it goes without saying, make up the vast majority of Americans.

That is the simple truth-a lot of people buy into the myth-because it makes them feel superior and better about themselves. That they are 100% wrong is not a possibility they are prepared to acknowledge. Because to do so is to acknowledge they are both selfish and heartless. For that reason I reprinting this post that explains what the tax numbers really mean-and why no sane person wants to be a part of them, if they can avoid doing so. The “lucky duckies” are not so lucky-in fact their lives are downright hard. Pity the two top members of the GOP ticket don’t see that.

The story behind the story.

One of the most popular mantra’s of current conservative thought is the theme that I call, “Freddie the Freeloader”. Namely that part of teabag orthodoxy that holds that the nation is literally full to brim with people more than content to live off of “welfare” and do nothing for themselves or society.

It frequently manifests itself every few months or so, as the Lucky Ducky statistic. Lucky duckies is a term that was used in Wall Street Journal editorials starting on 20 November 2002 to refer to Americans who pay no federal income tax because they are at an income level that is below the tax line (after deductions and credits).

It does not tell the whole story, and if anything it should not serve, as it is so often done, as an indictment of the worth and character of the individuals who fall in that 43%-than as an example of the law of unintended consequences- of well meaning tax law provisions balanced against wages that have been essentially flat lined for the past ten years.  If the number of “non income tax payers” has gone up in the past two years ( which it has) it highlights a statistic I’m not so sure the connoisseurs of Lipton really want to be highlighting. Wages are not growing in the US-they are flat for all but a very few. Second-unemployment is twice what it was when the Wall Street Journal first coined the term. Prices for everything-have gone up though.

 The federal income tax is only one of several taxes Americans pay. Other taxes, like excise taxes, sales taxes, and especially the payroll tax (a.k.a. FICA),  are not refunded or zeroed out. They get paid regardless of ones standing on the income graph.  If you include payroll taxes in that total number of tax units computation I mentioned earlier, the percentage of people with zero income tax or payroll tax drops to 11.6%.

And that does not include state taxes-or sales tax.

Furthermore, the tax protestors have neglected to tell you an important piece of economic demography: 90% of those with zero tax liability made less than 25,000 dollars cash income last year.  In a family of four, factoring in both the poverty threshold of 21, 800 and the income tax entry level of 26,000 ( before taking the earned income tax credit), I’m not so sure they have a lot to brag about. The popular number of a person making 44,900 paying no income taxes is only valid for a filer who can take Child Tax credits on two children and an earned income tax credit. A single filer, has already jumped on board the taxpayer train a long time ago.

Ask your self this, what would happen to the number if the home mortgage exemption went away? It would probably drop significantly-to the detriment of a lot of people-including people who do pay taxes and complain about it.

Consider this example: A man makes 50,000 per year salary, he has three kids, a job, a wife who takes care of said kids and two cars. Lets just sat for arguments sake he has a relatively small house. (Say between 175000 and 200000).  At 50,000 a year, that man is starting off making 4166 a month before taxes. Throw in say 6% into a 401K means that he is starting out before anything else comes out of his check at about 3850. The guy is going to start his tax return at about 9,862 in taxes. Subtract deductions for his family, his mortgage, and his state taxes-he’s probably getting money back. But he’s working hard just to stay afloat-is this really the person you want to make fun of?  He’s supposed to be the core Republican demographic.

And lets not even ask the question of what percentage of corporations pay no taxes shall we?

The simple truth of the matter is that a lot of lower-income Americans are paying taxes and not getting ahead in the process. If there is to be any type of tax reform-it has to start from the facts, not simply the fictions people want to believe.