It’s Tax Day! Time for protests and rallies and…
Well, not really. April 15th is the deadline for filing your federal tax return. It’s a requirement, but for most of us it’s the deadline for finding out how much we’ve overpaid last year’s taxes and are thus owed. That new fence you’ve been thinking about installing? Maybe you’ll get a big enough chunk back to afford it. Maybe you’ve underpaid your share of the burden and owe a little bit. That happens; adjust your withholding rate a bit next year.
Of course, the simple, not-so-exciting reality of the day doesn’t stop the zealots and crusaders from decrying federal overreach and evil Obamaism. Most of the folks showing up at the Tea Party rally today in St. Paul probably won’t be able to accurately gauge how much average families pay in taxes each year, and likely don’t know or don’t care that tax rates for 2009 actually went down under the Obama Administration’s economic stimulus program.
There’s also the “47% of Americans don’t pay federal income taxes ZOMGZ” canard. Yeah, about that…
Focusing on the statistical middle class – the middle 20 percent of households, as ranked by income – underlines this point. Households in this group made $35,400 to $52,100 in 2006, the last year for which the Congressional Budget Office has released data. That would describe a household with one full-time worker earning about $17 to $25 an hour. Such hourly pay is typical for firefighters, preschool teachers, computer support specialists, farmers, members of the clergy, mail carriers, secretaries and truck drivers, according to the Bureau of Labor Statistics.
Taking into account both taxes and tax credits, the average household in this group paid a total income tax rate of just 3 percent. A good number of people, in fact, paid no net income taxes. They are among the alleged free riders.
But the picture starts to change when you look not just at income taxes but at all taxes. This average household would have paid 0.8 percent of its income in corporate taxes (through the stocks it owned), 0.9 percent in gas and other federal excise taxes, and 9.5 percent in payroll taxes. Add these up, and the family’s total federal tax rate was 14.2 percent.
Tax policy is an incredibly complex area of our public discourse. It’s easy to sit back and say “Leave me alone with my hard-earned money!” and more difficult to explain how the taxes we pay repair roads, support schools, and support programs that the Tea Party activists themselves claim to love and support, like Medicare, Social Security, and (gasp!) the military.
And yet we must strive to explain that a balanced approach — sometimes a new program requiring new revenue is the right way, other times efficiencies can be found in government by deleting or combining programs — is better than the black-and-white, absolutist approach.
Each and every one of us paying our fair share for the things we all value is part of what America’s all about.