Are We Really Talking About Taxes?

I’m beginning to suspect that all the anger/righteous indignation/resentment directed at the subject of taxes isn’t really about taxes at all.

If Americans were really discussing the tax system, surely they would know more about it. And I’m not just referring to the ludicrous arguments being made by the televised talking heads in the wake of the healthcare decision. (Hint: the Supreme Court ruled that the imposition of a penalty for noncompliance was an appropriate exercise of Congress’s taxing power–they didn’t rule that the penalty was a tax.) I’m talking about far more basic information.

A recent poll of Tea Party folks found that 90% of them believed taxes had either gone up or remained flat under Obama; only 2% answered (correctly) that taxes had gone down, which they have for 95% of American taxpayers. Bill Maher noted the irony: members of an organization formed to oppose taxes and named after a historical group known for its anti-tax activism don’t know whether taxes have gone up or down.

Nor is this an anomaly. Discussion of taxes rarely include definition of the term. So people will assert, with a straight face, that “the bottom half” of Americans “don’t pay taxes.” This is hogwash–they pay lots of taxes. Poor people may not make enough money to owe federal income taxes, but they pay federal payroll taxes, gas taxes, sales taxes, utility taxes, property taxes (even renters pay property taxes, which are part of the rent)…In fact, the percentage of their income that the poor pay in state and local taxes is far higher than the percentage paid by the wealthy.

So–we have people who don’t know whether taxes have increased or decreased, and pundits whose calculations of the tax burden conveniently or mistakenly leave numerous taxes out of the equation. But my biggest pet peeve is the folks who discuss tax rates without distinguishing between the marginal rate and the effective rate.

Right now, we are arguing about the wisdom of returning to the marginal rates under Clinton–approximately 39%. Listen to the bloviators on your favorite talk show and you are likely to get the impression that such a rate translates to taking 39% of the taxpayer’s income in taxes. Of course, it means no such thing. It means that once an individual has made enough to be in the highest income bracket, each dollar in that bracket will be taxed at that rate. The effective rate is the actual percentage of overall income paid, after averaging out the rates applied to each income bracket. That–plus lots of loopholes aka “incentives”–is why Mitt Romney’s effective rate was in the neighborhood of 13%, and why corporations that are theoretically subject to 30%+ tax rates actually paid 12.6% in 2008.

My point here is not to advocate for any particular tax policy–we can all agree or disagree about what an optimum tax system would look like. My concern is more basic. It seems to me that if we were really arguing about taxes, we would know much more about them. And if we aren’t really arguing about taxes–if taxes are just a useful surrogate for whatever it is that actually has our collective panties in a bunch–what is that sore spot?

What’s the real source of our sour national disposition?


  1. With the election of a non-white male to the Presidency, some Republicans see some writing on the wall they don’t like about the future of the United States. It’s backlash. It’s why the TV show Mad Men is popular, I’m thinking. A false* sense of back when life was good.

    * False in the sense that fictional television or memory serves as a true reflection of the reality that was back then

  2. They’re convinced that the shittiness in their lives flows from accommodations for lazy brown people. But they can’t come right out and say it (even to themselves in many cases). So, taxes!

  3. Yes, Paul. The Democrats of the 50’s are today’s Republicans.

    Today’s Republicans and Democrats look nothing like their ancestors. Today’s Republicans want to be yesterday’s Democrats: racist, sexist, homophobic religionist pigs who purge voter rolls to keep those bad brown people from having a voice.

  4. Joe; you hit the nail on the head. Most people of voting age have somehow forgotten “back in the day” before the switchover between party beliefs. A friend of mine wears a shirt stating, “If Abe Lincoln were alive today he would be a Democrat”. I don’t understand why the blatant changes aren’t recognized by those hurt most by today’s Republican NO stand on every issue, regarding not only taxes but basic civil rights. If they could offer valid reasons and alternate solutions, we would listen. My anger/righteous indignation/resentment regarding taxes is simple; the Repubicans yelling that Obama wants to raise taxes fail to mention he want to RETURN the tax rate on wealthy to original rates. I see the greatest mistake President Obama has made since his inauguration is the continuation of this tax cut; it has been gnawing on his ass – and ours – since he opted to continue it. Remember; it is to end January 2013, this will assuradly NOT happen if Romney is elected.

  5. Taxes? Gee, I thought it was about cutting Texas, and I’m all for that. Never mind.

  6. I think a lot of you liberals here are missing the big picture. Gone are the days of $60K/year, no over-time, easy to get factory jobs. Those jobs easily were paying six-figures to those willing to work OT, or holidays/weekends. This translates to a world where many, even folks who owe thousands to tens of thousands in student loan debt, are working for $40K/year. If the spouse makes $40K/year, and there are no kids, and the mortgage is paid down, these productive people get hosed in taxes.

    Yes, while the working poor may pay other taxes, they don’t pay taxes for “the common good.” Not only that, they get WIC, food stamps, rent subsidies, and daycare subsidies. Some may actually get cash allotments monthly on their Hoosier Works card. I don’t know the income limits for these things, but even poor people, who don’t pay any income taxes (this doesn’t mean SS or Medicare/caid) are getting benefits others don’t.

    What does this tell productive members of society who only have kids when they can provide financial support for them? What does it tell our younger generations, that working hard really isn’t needed, Uncle Sam is there to provide?

    As far as “brown people,” yes people are upset with them. As one racial political blog put it: While there are more white people on welfare than black people, the % of black people on welfare is larger than the % of white people. So, if your black, there is more of a chance your poor. White people blame black people because of how a lot of them have acted over the years. Go to and watch the videos coming out of the black community. I really never hear of white people wanting to starve anyone who is poor, but when people start acting like savages, committing crime, etc., that is when those paying the bills start to feel jaded. There is nothing wrong with sitting in a Section 8 apartment, eating your food stamp food, and being poor. But this attitude from many on welfare, from all races and backgrounds, is that they are owed this middle or upper middle class lifestyle. Sorry, that isn’t how things work. You don’t get to have cable TV if your poor. You don’t get to have smart phones if your poor. And there is the problem. Too many poor people do have all those things. Brizzi was right, and while he get nailed for his comments, his statement about indigent defendants being able to afford $3,000 rim packages, $200 smart phones, cable TV, etc. is spot on.

    The more this continues, the more the working middle class folks will decide to bail from the system. Your best bet to get college paid for if you have a daughter, let your daughter get knocked up. How is out-of-wedlock births a bad thing anymore? Any negative comments about it is meet with scorn, until productive conservatives in the middle income brackets say “Why not join this class of people and get something out of Uncle Sam ourselves?” Then the status quo types go crazy because if millions of the productive class start living how we see some of the poor (not all) living, we would be in big trouble.

  7. The source of sour national disposition is those trying to work for a living feel like we’re on a stagecoach, pulled over with our hands raised to the sky.

    The problem is the bandits with the guns are the guys we voted into office.

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