The Tea Party movement fancies itself a populist uprising. The basic theme is that working stiffs and ALL Americans are overtaxed and that ordinary Americans can’t possiby pay another penny without becoming slaves to a socialist government. Sarah Palin herself articulated the message for the umpteenth time at a rally in Boston on April 15, clearly implying that taxes were a big burden on all us regular folks.
Palin said: “We need to cut taxes so that our families can keep more of what they earn and produce, and our mom-and-pops, then, our small businesses, can reinvest according to our own priorities, and hire more people and let the private sector grow and thrive and prosper.”
But to fight off the sunsetting of federal tax breaks for the very wealthiest Americans, another set of anti-government zealots (including Minnesota’s own Katherine Kersten) was busy last week telling us that half of Americans pay no (federal income) taxes at all. Only halfway through her column does Kersten back away a little bit and allow that almost all taxpayers pay other kinds of federal taxes. And Kersten never bothers to mention the hugely important fact that the effective tax rates for state-local taxes are highly regressive, much lower for the top than for the middle and the bottom.
The Palin and Kersten assertions are not only thematically contradictory, they seriously distort these basic truths: Everybody pays taxes and taxes are good and necessary. Those taxes finance our mostly beneficial governments and provide strategic investments that grow jobs and maintain our quality-of-life. The overall federal-state-local effective tax rate in Minnesota and the United States has been declining for a decade. And the wealthy pay a smaller percentage of their income than they did 50 years ago.
For an informed analysis of the “half-pay-no-taxes” assertion, check out New York Times columnist David Leonhardt’s explanation. He points out that only about 10 percent of Americans are so poor they pay no federal taxes, that tax rates for the wealthy have fallen signficantly, that they have a much larger percentage of the nation’s total income than they used to have, and that rich conservative talk-show celebrities probably don’t want to pay more for Social Security and Medicare for those ordinary little people on the bottom half.