Photo: GraphicaArtis/Getty Images One of the sad constants of American political debate is that, anytime the tax rate on the rich is to be either raised or lowered, Republicans will repeat a certain statistic. To wit, “The Stat” is that the highest-earning one percent of taxpayers pay 40 percent of all income taxes. Conservatives consider this fact a dispositive justification either against any proposal to increase taxes on the rich, or in favor of any plan to reduce it.
The first problem with The Stat is that it makes no reference to the proportion of income the rich earn. The juxtaposition between one percent and 40 percent is meant to convey the idea that a small number of people are carrying a gigantic and disproportionate burden, but the figure lacks any context when it omits how much money they earn in the first place.
What’s more, even within the federal tax system, income taxes are just one, relatively progressive, component. For most workers, the biggest tax they pay isn’t income tax but payroll tax, the line marked “FICA” on your pay stub, which finances Social Security and most of Medicare. That tax is regressive and only applies to the first $137,000 of income.
Republican politicians, including George W. Bush, have made the same error. The Stat is technically limited to income taxes for a reason — it’s describing a narrow category of taxation that is especially progressive. But it only works because it makes the listener believe it describes all taxes. The trick works so well it fools the people repeating the stat.
jonathanchait WhisperOfFreedm 👀☝️
jonathanchait That don't pay anywhere near that percent...
jonathanchait I just blocked a guy 2 days ago b/c he was stating that the richest paid 40% and I was like uh no. I wish this article came out 3 days ago. lol
jonathanchait If ur going to write an act let against a statement don’t start it by saying it is literally true. And then include a chart showing the top 20 % pay 66% of all tax
jonathanchait But you are counting BEFORE income transfers. After income transfers (SNAP, HUD, etc.) the stat skews back quite a bit. On the other hand, the Fed's easy money, the PPP, and lots of other policies throw money right back at the wealthy while inflating wages away. It's a shambles.
jonathanchait That never made sense from the start. Republicans have been working for many decades to get the tax rate for the rich to zero...the only thing left is to end the estate tax.
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