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When people are poor (making minimum wage) or unemployed or students or retired or disabled, maybe they don’t pay very much in federal income taxes. But they pay the following other taxes:

Payroll taxes, including Social Security and Medicare (if they have a job).

State sales taxes (if they buy things in stores).

Local property taxes (either because they own a house or because they pay more in rent so the landlord can pay property taxes).

Excise taxes on things like gasoline.

Taxes and fees on drivers’ licenses, telephones (both land lines and cell phones), cable TV, permits for doing things, etc.

Almost all of those other taxes are regressive, meaning poor people pay a bigger percentage of their income on taxes than rich people do.

Let’s look at payroll taxes (social security and medicare). If you earn money, you pay social security a flat rate up until $110,000. Then you pay no more. So the poor and middle class pay 4.2 percent (plus the employer pays 6.2%). People who earn a lot of money pay nothing after 110K. People like Mitt Romney pay nothing to social security (because capital gains don’t count as ordinary income). If you have capital gains, you also pay about half the federal income tax rate.

I saw a graph recently that said recent U.S. government revenues include 41% from individual income taxes and 40% from payroll taxes. Let’s stipulate that 47% of poor people don’t pay income taxes. OK. What percentage of poor people pay payroll taxes? How much of his income from the last 10 years did Romney put into social security and medicare? Not very much. Probably close to zero. Plus he only paid 15% on his capital gains (minus his deductions for donating to the Mormons).

And what about sales taxes? Let’s say you earn about 20K and you spend all of your money. And the sales tax is 8%. That means 8% of your income goes to the state for sales tax. Let’s say you’re doing pretty well and you make 200K and you spend 100K in local stores (so you pay $800 in sales taxes (8%), but you made 200K). The rest you put in the bank or something. You pay only 4% of your income in sales taxes. That poor person who made a tenth as much as you paid 8%. You paid 4% because half your income was not subject to sales taxes. People like Bill Gates or Warren Buffett pay the same sales tax on a candy bar as anyone else, but if you look at the total amount they pay in sales tax, as a percentage of income, they pay much less than poor people.

Now let’s compare the 20K person to the 200K person. Suppose both of them use the same amount of gasoline to get to work and drive to stores and they both pay $200 in gas taxes per year (I’m just making up these numbers). To the poor person, that’s 1% of their income. To the rich person it’s 0.1% of their income.

Let’s look at retirees who paid income taxes their whole life and paid into social security and medicare. Is Romney saying they’re leeches? They’re collecting what was promised them.

And what about students studying at college, so they can get a decent job? Maybe they took out student loans and are working at a part time job. They’re planning to pay back every cent with interest. Is Romney calling them leeches, because they aren’t paying income taxes?

What about soldiers getting disability pay? Maybe they’re getting medical treatment at the VA. Does Romney call them leeches who only want a government handout?

Romney just called 47% of Americans leeches. I can’t tell you how pissed off I am.

One more thing. The State of Washington has a pretty high sales tax (about 10%) but there is no state income tax. A couple years ago, the state voted on instituting a state income tax (it failed). And by the way, Bill Gates's father was one of the spokesmen for a progressive income tax. Prior to the vote, one of the weekly tabloids in Seattle (either the Stranger or the Weekly) published this graph showing how regressive the taxes in WA are:

Right there in graphic terms, is the definition of regressive taxes.

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Comment Preferences

  •  Tips for progressive taxation (4+ / 0-)
    Recommended by:
    worldlotus, jlynne, Lawrence, Ahianne

    The rich should pay a higher rate.

    And while we're at it, let's put speeding tickets on an adjustable scale, like Finland.

    But the angle said to them, "Do not be Alfred. A sailor has been born to you"

    by Dbug on Tue Sep 18, 2012 at 12:24:42 AM PDT

  •  another point (2+ / 0-)
    Recommended by:
    Dbug, EMBA30

    assume for the sake of argument that the 47% figure is really true . . .

    in what reality is it acceptable that half the nation can't earn enough to have taxable income?

    "None are more hopelessly enslaved than those who falsely believe they are free." - Goethe

    by jlynne on Tue Sep 18, 2012 at 12:33:30 AM PDT

    •  Yep. (2+ / 0-)
      Recommended by:
      Lawrence, EMBA30

      All those unemployed people aren't paying income taxes! (Because they have no income.) All those retired people who paid into social security are freeloading! And those college students are just going to class and studying instead of working full time! And that veteran who got his legs blown off thinks he's entitled to free health care.

      And (in Romney's mind), the solution is lower taxes on rich people.

      But the angle said to them, "Do not be Alfred. A sailor has been born to you"

      by Dbug on Tue Sep 18, 2012 at 12:45:38 AM PDT

      [ Parent ]

  •  These are local taxes, not federal taxes (0+ / 0-)

    Except for maybe gasoline, all these non-federal taxes are not controlled by the federal government.

    Medicare and SS are trust accounts. Many people who receive benefits from them never paid into them the amount they're receiving.

    For federal income taxes, where the federal government has authority, 47 percent do not pay it.

    If people have no skin in the game, then they don't care how money is spent and will be locked out of having a say unless they keep the benefactors in office.

    •  Republican talking points (1+ / 0-)
      Recommended by:
      Ahianne

      Are you saying that only people who pay federal income taxes should be allowed to vote? Because they have skin in the game?

      If corporations are people (my friend), then if a corporation (like GE, for example) pays no federal taxes should they be allowed to run ads supporting a candidate?

      If a person is retired (and paid income taxes his whole life) are you saying that because he's getting social security (which you might call an entitlement), he shouldn't vote?

      Yes, SS and Medicare are trust accounts. They're insurance. No doubt there are people collecting more than they put in. But there are also people who paid in and then never collected anything because they died at age 30 or 40 or 50. That's the very nature of insurance. You might pay into auto insurance or house insurance your whole life and never collect a dime. Or you might collect more than you put in.

      And WTF do you mean by benefactors? Are you talking about major corporations who donate money surreptitiously to candidates and then expect a payoff in tax breaks?

      Are you a Republican? Are you?

      But the angle said to them, "Do not be Alfred. A sailor has been born to you"

      by Dbug on Tue Sep 18, 2012 at 01:16:14 AM PDT

      [ Parent ]

      •  Dbug - does GE run ads supporting candidates? (3+ / 0-)
        Recommended by:
        billmosby, Sector 7G, nextstep

        You are mixing free speech rights that everyone has to support candidates, although corporations can only make contributions or expenditures that are independent of a candidate's own campaign, with voting issues. I don't think that Sector suggested that people not be allowed to vote, but rather he was making the point that if people pay no federal income tax then it's easy to have the attitude that the federal government should spend more for social welfare programs if you are a beneficiary, but pay nothing. It's a valid point and worth discussing.  

        "let's talk about that"

        by VClib on Tue Sep 18, 2012 at 02:47:37 AM PDT

        [ Parent ]

        •  The issue is confusing to a lot of people. (1+ / 0-)
          Recommended by:
          VClib

          While it's literally true that 47% pay no federal income tax (as far as I can tell from random sources anyway), the 1% aspire to the same status and thanks to various means largely succeed. Everyone else pretty much pays what they are asked.

          To defuse this issue perhaps it would be good to adjust things so a greater percentage pay something in federal income tax at least.

          But then those folks are already paying a relatively high percentage of their incomes in the other taxes and insurance-like fees mentioned above.

          Kind of a mess, really.

          Moderation in most things.

          by billmosby on Tue Sep 18, 2012 at 05:44:22 AM PDT

          [ Parent ]

  •  Every President from Reagan onward (maybe except (2+ / 0-)
    Recommended by:
    Ahianne, jlynne

    Carter) signed bipartisan bills lowering Federal Income Taxes  a little on the lower income class and a lot (in total dollars) on the really rich. And now that the rich want even more cuts there is nowhere to go but to claw back the low wage class taxcuts and other earned benefits.

    I'd tip you but they cut off my tip box. "There is more stupidity than hydrogen in the universe, and it has a longer shelf life.” - Frank Zappa

    by OHdog on Tue Sep 18, 2012 at 04:38:04 AM PDT

    •  but remember? (0+ / 0-)

      "Read my lips, no more taxes!"

      And as soon as he was in office Bush the Elder had to raise taxes, 'cuz Ronnie's trickle wasn't working.

      "None are more hopelessly enslaved than those who falsely believe they are free." - Goethe

      by jlynne on Tue Sep 18, 2012 at 10:20:45 AM PDT

      [ Parent ]

  •  Dbug, I have another question (0+ / 0-)

    about that 47% . . . doesn't that include children?  Isn't it 47% of all people?  

    Do we really want our 8 year olds working in sweat shops  again?

    "None are more hopelessly enslaved than those who falsely believe they are free." - Goethe

    by jlynne on Tue Sep 18, 2012 at 10:22:19 AM PDT

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