Saturday, January 01, 2011

Apocalyptic! Some Americans Don't Pay (Federal) Income Tax!

It was like old-timers' weekend in Washington after the November election as the GOP repackaged its trusty "tax and spend" talking point. Fox News reported:

We don't have a revenue problem. We have a spending problem," as Senate Minority Leader Mitch McConnell, R-Ky., said Sunday.

In fact, no fewer than four Republican lawmakers who rode the wave of morning talk shows repeated the new mantra Sunday in what is undeniably the underlying theme behind the GOP approach to tackling government spending in the next Congress.

"The election result reflected the fact that people get Washington does not have a revenue problem. It's got a spending problem," Rep. Eric Cantor, R-Va., the expected next House majority leader, said on "Fox News Sunday."

"We do not have a revenue problem. We have a spending problem. Let's focus on the problem," Rep. Paul Ryan, R-Wis., the likely next House Budget Committee chairman repeated later on the same show.

"Well, I think it's not a revenue problem; it's a spending problem," said Sen.-elect Rand Paul, R-Ky., on ABC's "This Week." "A lot of times people would come to me and say, well, you don't believe in any government. And I would tell them, you know what? I believe in $2.4 trillion worth; I just don't think you can have $4 trillion worth if you only bring in $2.4 trillion."

But if we thought Republicans were aghast! appalled! outraged! that the taxes of Americans of modest means are too high, we have been fooled. South Carolina's Jim DeMint laid it out in 2009 when he contended "there are two Americas but not the kind John Edwards was talking about. It's not so much the haves and the have-nots. It's those who are paying for government and those who are getting government." Two Americas, according to this Senator- the wealthy and all the rest, and we know which side he considers worthless.

In a recent column lauding the GOP's right wing economics, George Will got all tingly about incoming House Ways and Means chairman Dave Camp of Michigan:

Many conservatives, including Camp, believe that although most Americans should be paying lower taxes, more Americans should be paying taxes. The fact that 46.7 million earners pay no income tax creates moral hazard - incentives for perverse behavior: Free-riding people have scant incentive to restrain the growth of government they are not paying for with income taxes.

"I believe," Camp says, "you've got to have some responsibility for the government you have." People have co-payments under Medicare, and everyone should similarly have some "skin in the game" under the income tax system.

Wisely, this leading Republican waited till after the election to argue- or career Republican Will wisely waited till after the election to report- that taxes on the working class were too high. In fact, apparently, they are too low.

Camp might have emphasized the contribution of those he considers freeloaders to government treasuries through excise taxes, broad-based state and local (property, sales, or income) taxes, or the FICA. Contributions to the latter tax, of course, are capped by income, wherein Bill Gates, Goldman-Sachs CEO Lloyd Blankfein, Rush Limbaugh, and those corporate Chief Executive Officers courted by President Obama paid no more in 2010 than a guy or gal making $106,800 (and paid at a far lower rate).

Or Camp could have been troubled that United States corporations, legally, or otherwise, routinely pay no income tax; or that the aforementioned Blankfein received a $9 million (all-stock) bonus in 2009, though that was exceeded by the $17 million bonus package received by JP Morgan Chase and Company President and Chief Executive Officer Jamie Dimon. (And why not? They were so, so successful.) Both their companies were among the beneficiaries of the "bailout" excoriated by the tea parties and some of the politicians they adore, who seem untroubled by these bonuses.

The rich and their benefactors do so much whining (my whining, meanwhile, is only righteous) that we would hardly notice there is so little for them to whine about (chart from Economic Policy Institute):

But for the likes of DeMint, Camp, and Will, productive Americans who make too little to pay federal income taxes, whose income decline in real terms and find their job benefits wither away, should be oh so grateful to the wealthy and powerful whose interests they serve.

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