Who pays taxes

With Mitt Romney having made the news for repeating the bullshit factoid that “47% of Americans don't pay any income tax”, articles have been circulating about that claim.

The Washington Post has a good overview of the deceit and its implications.

83 percent of those not paying federal income taxes are either working and paying payroll taxes or they’re elderly and Romney is promising to protect their benefits because they’ve earned them. The remainder, by and large, aren’t paying federal income or payroll taxes because they’re unemployed. But that’s a small fraction of the country.

Behind this argument, however, is a very clever policy two-step that’s less about who pays taxes now and more about who is going to pay to reduce the deficit in the coming years. Here’s how it works.

If you want deeper analysis of the numbers, a chewy long article from the Center on Budget and Policy Priorites, Misconceptions and Realities About Who Pays Taxes, looks closely at the figures.

The fact that most people who don’t owe federal income tax in a given year do pay substantial amounts of other taxes — and also are net income taxpayers over time — belies the claim that households that do not owe income tax in a given year will form bad policy judgments because they “don’t have any skin in the game.”

Furthermore, although the federal tax system is progressive overall, state and local tax systems are regressive and undo a significant share of that progressivity.

The Tax Foundation has more on how Bush's tax cut plays a big part in creating people paying no income tax. David Leonhardt at the New York Times has more in an old post about how the 47% figure is deliberately deceptive. Digby snarks about the incoherency of this argument from conservatives. That pie chart at the top of this post is from NPR.

And this might also be a good time to bring up the “Giver States vs Taker States” analysis which has been long known by lefty bloggers like me showing that, paradoxically, States whose populations pay more Federal taxes in aggregate than they receive in benefits tend strongly to be “Blue” states which elect Democrats while the States whose populations come out ahead on Federal money are “Red” states which vote Republican.