Wednesday, September 19, 2012

The 47%...

Romney's remarks about the 47% who do not pay (Federal) income tax has been much in the news recently.  I've wailed about this myself.  The graph at right nicely illustrates the issue (from this article).  When I first entered the workforce (in the late '60s), only about 12% of the workforce paid zero taxes.  At my first paid job (as a dishwasher/busboy at Howard Johnson's on the NJ Turnpike), I was paid minimum wage (then $0.85/hour for teenage workers, and $1.25/hour for adults).  I paid taxes out of those wages, enough taxes to thoroughly piss me off.

But Megan McArdle (writing at her new home with The Daily Beast) writes some uncomfortable truth.  Uncomfortable for conservatives, that is.  As she points out, the reason so many people don't pay Federal income tax is that Congress has started using the tax code to promote social policy, by picking winners and losers.  The winners (those paying less tax or getting credits) are those who follow the supported social policy – and many of those policies are those supported and promoted by conservatives.  In the chart above, the numbers don't lie: for the most part, the massive increases in the percentage of the workforce paying zero Federal taxes have occurred in Republican administrations.

Ms. McArdle strikes directly to the right problem: the use of the tax code to support social policy.  She supports this use of the tax code; I (and many others) do not.  The only way to eliminate all this picking of winners and losers would be to completely flatten the income tax – one rate, charged on all income over a threshold level, with zero exemptions, deductions, or credits.

Now if I can only live long enough to see this happen...

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