Why the Poor Pay No Federal Income Tax: A Wee Tutorial

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Is it true, as Mitt Romney says, that 47% of Americans don’t pay federal income tax? Yes! That’s mostly because they’re either poor, elderly, or take advantage of tax credits for low-income workers. Details here. But why do these people pay no income tax? Ezra Klein breaks it down into Twitter-sized chunks:

  • Rs have spent years cutting income taxes and increasing things like the Child Tax Credit. This means fewer people pay income taxes.
  • So whenever you hear a stat like “47% don’t pay income taxes,” remember: Reagan and Bush helped build that.
  • These tax cuts for the poor were partly in order to make further tax cuts for the rich political palatable.
  • But now that fewer people pay income taxes as a result of GOP policies, they’re being called lazy and dependent.
  • And thus the GOP’s tax cuts are being used to make a case that the rich are overtaxed and that the less-rich are becoming dependent.
  • Which thus leads to a policy agenda of tax cuts for the rich and cuts to social services for the non-rich.

Yep, that’s about it. Also worth noting: the poor often pay higher state tax rates than the rich. Add in payroll taxes and excise taxes, instead of cherry picking only a single tax, and it turns out that the poor and the working class end up paying a fair chunk of their income in taxes. Not as big a chunk as the rich, it’s true, but then, it strikes most of us as perfectly fair that the poor should pay lower tax rates than the rich. I wonder if this strikes Romney as fair too?

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THE BIG PICTURE

You expect the big picture, and it's our job at Mother Jones to give it to you. And right now, so many of the troubles we face are the making not of a virus, but of the quest for profit, political or economic (and not just from the man in the White House who could have offered leadership and comfort but instead gave us bleach).

In "News Is Just Like Waste Management," we unpack what the coronavirus crisis has meant for journalism, including Mother Jones’, and how we can rise to the challenge. If you're able to, this is a critical moment to support our nonprofit journalism with a donation: We've scoured our budget and made the cuts we can without impairing our mission, and we hope to raise $400,000 from our community of online readers to help keep our big reporting projects going because this extraordinary pandemic-plus-election year is no time to pull back.

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