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The Spectacle Blog
In National Review, Ramesh Ponnuru takes on the “Freeloader Myth,” namely, the increasingly prevalent worry that half of all workers “pay no taxes.” It’s a meme that Michele Bachman, prominently among others, has helped perpetuate.
Ponnuru explains that 47 percent of workers paid no income taxes in the latest period. Most of them, though, did pay payroll taxes — the contributions to Social Security and Medicare automatically deducted from every worker’s paycheck. And many of them would have paid income taxes if not for a number of factors, including the recession, the Bush tax cuts, the Gingrich expansion of child credits, and more — read Ponnuru’s piece for a complete rundown. There’s no conspiracy here, nor any looming tipping point at which the “takers” outnumber the “producers” and vote themselves even bigger handouts.
Ponnuru also makes an important point about payroll taxes:
How to count payroll taxes is a disputed subject. Many conservatives argue that since payroll taxes are dedicated to Medicare and Social Security, people who pay only payroll taxes are contributing to their retirements but not to the general operations of the government. The irony here is that FDR deliberately and explicitly introduced the payroll tax to accompany Social Security because it would encourage people to draw this false connection. In reality, the relationship between payroll taxes sent to Washington and Social Security benefits sent back is loose: Today’s beneficiaries get much more than they sent, and tomorrow’s will get less. (In the case of Medicare, there is no relationship.)
The point of the payroll tax, for FDR, was to ensure that “no damn politician” could ever take away the benefits because (to paraphrase conservative author William Voegeli) all the damn voters would think they had earned those benefits through their payroll taxes. All federal taxes go to the federal government, and all federal spending comes from it: The rest is accounting, and accounting tricks. People who pay payroll taxes are funding the federal government, and conservatives who deny it are falling for a trap FDR set for them.
I’d add that there’s a certain tension between regarding Social Security as a “monstrous lie” and also discounting the payroll taxes paid by people lower on the income tax brackets. If Social Security’s future benefits are a lie, then where are today’s payments going?
View all comments (15) | Leave a comment
More Blog Posts by Joseph Lawler
http://spectator.org/blog/2011/11/21/53-percenters-stand-down-no-pr
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sjccoach| 11.21.11 @ 2:26PM
The Ponnuru column was drivel. I invite anybody to come to a tax office next year and observe the non payers complaining about the amount of free money that get, EITC, is not enough. These people are takers and are not happy with they are given. The EITC, Child Tax Credit, Addditonal Child Tax Credit and all Education Credits should be repealed.
CforUS| 11.28.11 @ 10:08AM
I hear plenty of complaints about the free money not being near enough to cover the cable bill, or worse yet, that doesn't cover the NFL Sunday Package. EITC was a scam to splash around to get votes, the CTC was to make the politicians feel like they were "helping the poor", and the Education Credits, in the end, served the purpose of substantially jacking up tuition. We're our own worst enemy.
Enact a balanced budget ammendment. Move to a flat tax. Eliminate withholding so everyone knows EXACTLY what taxes they are paying. Eliminate most (if not all) exemptions. Require a supermajority to make future tax code changes. Just a few steps in the right direction.
StanO| 11.21.11 @ 2:35PM
It's doubtful that those on the low end of the economic spectrum will pay more in payroll taxes than they receive in Social Security. So really it should not be counted.
No one with incomes less than about 90k pays a lot of income tax, only the rich pay a lot (100k+). SSI however is crushing and is truly a tax on the 50k-90k group, paying more than they will ever receive.
Quartermaster| 11.21.11 @ 7:00PM
Nice to know I don't pay much in taxes. I'll remember that when I print my 1040 next year and watch nearly $6K go away.
Your next to last sentence is monumentally stupid.
JohnD| 11.21.11 @ 2:36PM
My father used to say that if you give someone help they will resent you for it for the rest of their lives.
antiDave| 11.21.11 @ 3:12PM
Here's the lie. When social security was enacted you had to be 65 years old to collect, yet the average life expectancy for an American at that time was only 57.
Also, when was the last year there was actually a social security trust fund.
Finally, at what point does the greediest generation get to quit spending our kids money? They let the politicians spend all they contributed in taxes, plus a mountain of debt they placed on the backs of our children for their benefit.
Mike 3/505| 11.21.11 @ 4:06PM
"People who pay payroll taxes are funding the federal government, and conservatives who deny it are falling for a trap FDR set for them. "
Nay! Conservatives who deny it are REFUSING to fall into the trap. Either Social Security and Medicare are true entitlements or they are not. If they are, then individuals who contribute, and no one else owns the benefits. It they are a form of insurance, the beneficiaries again, own the benefits. In any case, neither program is constitutional.
Also, regardless of the fungibility of money, payroll taxes are NOT contributions towards general government. That is the whole point of true conservatism...ridding the government of the liberal shell game.
Regards,
Mike
jweaks | 11.21.11 @ 9:41PM
This^^^
Doug| 11.21.11 @ 5:29PM
The 53% also pay payroll taxes...and usually more as they are higher wage earners. As they earn higher wages they most likely also pay higher amounts of sales taxes. They probably also are home owners as opposed to renters and pay more property taxes. Either the author needs to look at overall tax burden or limit his arguments to just income taxes but by mixing both he is giving an incomplete diagnosis.
Old Soldier| 11.22.11 @ 1:27AM
Right on, Doug! And while we're at it, let's not forget all the direct and indirect transfers the 47% receive, or are eligible to receive, that are denied to the 53%--starting with the infamous Earned Income Tax Credit. Throw in, also, the fact that the Social Security payout formula is deliberately skewed to returning more to the lower end of the income scale. The 53% will pay in far more, but by design they will receive far less than the 47%.
This is a very misleading article. I'm not sure why Mr. Lawler felt he had to write it, but he contributes nothing to a proper understanding of the problem.
C Bowen | 11.21.11 @ 6:03PM
"where are today's payments going? "
Collateral to the Chinese for funding the Bush-Obama Global Islamic Democrat revolution.
WL| 11.22.11 @ 12:58AM
Mr. Lawler...I am so tired of seeing this crap on Am. Spectator...that I am about ready to quit coming to this website...
To Everyone Else...be on the lookout for something to be going on centerered around this "53 vs. 47" concept in the near future. I have learned to spot these things at this website and NR....
Step 1 is ALWAYS to tell us that some argument they have all made is now fantasy that WE came up with...
Step 2...Call you hobbits, extremists, or purists when you don't go along with their capitulation
Step 3...with enough dis-orientation...they (the elected ones) will take the fall...
And we lose...
Every time...
Don't believe me...
Just file this post away in your mind...
And watch it happen....
Just remember 53 vs. 47
53 vs. 47
53 vs. 47
53 vs. 47...
and when you see it...you will also be closer to breaking the code.
nodak freedom lover| 11.22.11 @ 9:02AM
This article and allmost all other publication forgets about the earneds income credit. It wipes out any tax the lower 47 would pay including fica sales and medicare ten times over
Brendan| 11.22.11 @ 9:37AM
Earned Income Tax Credit. I read Ponnuru and thought "he's trying to pull a fast one again".
EITC - why I like to call GWBush the greatest Marxist we ever elected, except for Obama.
Mr. Lawler - stop reading Ponnuru. He's useless, as is almost all of NRO. I give you Kevin Williamson as an example...
Dai Alanye | 11.22.11 @ 11:05AM
Let's all remember that ANYONE who buys ANYTHING - even your average derelict - also pays taxes indirectly. Every product or service carries a cost in taxes. When we talk about 25% of the GDP going to support government, that same approximate amount is included in every price set by every purveyor of goods.
Income and payroll taxes, excises of all types, regulations that run up manufacturing or marketing expenses or require the hiring of accountants, lawyers and clerks - it's all there in the final price, whether you buy steel by the ton, muscatel by the pint, or lawn work by the hour.
Subsidies and tax credits modify the end result for the individual, of course, but we can go into those the next time.